Automotive News - Guide to Economic Development - Supplement - GED7

proved too rich for Slovakia's biggest
rival for the plant, Poland.
"Slovakia was ready to pay much more
than we could secure in our budget,"
Poland's then deputy prime minister,
Janusz Piechocinski, told Reuters in
2015. Poland was the last remaining
European site contender as the decision
went down to the wire in July 2015,
Simoncic says. JLR says that Mexico
was also in the race at the very end - a
key point for some in Europe who have
questions about the Slovakia project.
In May, the European Commission,
the EU's legislative arm, opened an
investigation into whether Slovakia
may have broken EU rules by offering
JLR more than the maximum allowable
incentives. Specifically, it will consider
whether Slovakia failed to include the
transfer of land in the Nitra Strategic
Park to JLR, and the plant's exemption
from local fees to transfer agricultural
land to industrial use. In its efforts
to maintain European harmony and
protect the competitiveness of existing
industrial operations, the EU stipulates
that state incentives must not be the
primary reason companies chose one
location within the EU over an equally
deserving region.

Government officials additionally
proposed such improvements as worker
training assistance, increased local
kindergarten and nursery services for
workers' children, the expansion of police
and fire services, and a civil engineering
project to flood-proof the river Nitra.
Another key issue to resolve:
delivering skilled employees.
Slovakia is a country of just 5.4
million people. Nitra is Slovakia's fourth
largest city, but its population is 85,000.
JLR will need 2,800 workers when the
plant reaches three shifts. Now that
the project is underway, it has already
received 40,000 job applications. But
Wortberg acknowledges that not all of
those interested workers will be suitable.

JLR is not worried about the legal
question. It maintains that, in the end,
Slovakia was down to competing against
Mexico - not Poland. In that case, a
European plant location was already
narrowed down to Slovakia, and the final
incentive negotiations did not pit two
EU member states against each other.
"Given the scale of our investment,
we fully expected the Commission to
undertake this investigation," Wortberg
says. But the incentives in question
were "a necessary component in JLR's
decision to select Europe, rather than
Mexico, for this investment."

LAND
The next issue for JLR was the suitability
of the specific industrial park the Slovak
government offered, which it envisioned
developing into a much larger area.
On an early visit, JLR site leaders
concluded that the site had good
highway access via two ramps. JLR
would occupy the centerpiece on
the roughly 444-acre site, with space
to expand further in the future. An
adjoining supplier park eventually
will house 10 to 12 suppliers, and JLR
already is in talks with six.

BIGGER NUMBERS
The government hopes to help
generate more potential employees by
encouraging mobility within the country
- encouraging citizens to move to the
region. It has even targeted the Slovak
diaspora overseas via advertising.
"There are probably 200,000 or more
people working in other countries,"
Simoncic estimates of his countrymen.
"We have a program to attract them
back to new and interesting jobs."
Wortberg hopes the private construction market will take care of building
housing for incomers. But he says JLR
is ready to build dormitories on site if
there is a shortage - something that has
occurred in China in recent years.
Even then, JLR is prepared to look harder
for job candidates in the years ahead.
"When we recruit for a second and
a third shift, we will certainly have to
expand the radius of our search for
people," Wortberg says. That might
include casting the net outside Slovakia
into neighboring countries, something
that's made possible by the EU's freedom-of-movement rules.
-nick gibbs

JLR

JLR is spending 1.4 billion
euros to build Land Rovers in
Slovakia starting in 2018.

E C O N O M I C D E V E L O P M E N T G U I D E / J U LY 2 0 1 7

7
Table of Contents for the Digital Edition of Automotive News - Guide to Economic Development - Supplement
