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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (70783)	11/30/2008 3:21:30 PM
From: Snowshoe	Read Replies (1) \| Respond to of 74559

Slovakia, EU's Detroit, maneuvers around meltdown By WILLIAM J. KOLE, Associated Press Writer Sun Nov 30, 8:49 am ET Analysts say carmakers are drawn to Slovakia because it has a cheap but skilled work force, low taxes, weak labor unions, good highways and other logistics, and a strategic location in the geographic heart of Europe that's close to emerging markets in Russia, Ukraine and elsewhere in the former Soviet Union. "It makes sense to be there," says Ferdinand Dudenhoeffer, director of the Center of Automotive Research at Germany's University of Gelsenkirchen, who calls Eastern Europe "the new El Dorado of production." Can the country sustain its success in the face of recession? Dudenhoeffer is skeptical. "There is no country or carmaker anywhere in the world that is immune from this crisis," he warns. Slovakia made painful economic reforms before and after it joined the European Union in 2004. The payoff: Its economy is one of Europe's most vibrant, with 7.4 percent growth in 2008 despite the global meltdown and a solid 4 percent projected for next year. And on Jan. 1, 2009, Slovakia joins the common euro currency. The average monthly wage is just euro650 ($840), with auto workers earning about euro800 ($1,033) a month. That's at least four times less than their counterparts in Germany earn, and pension and health care costs are also a fraction of what the Big Three pay out. Although Slovak auto workers are unionized, they've struck a deal with foreign carmakers to ensure their wages keep pace with inflation and raises don't exceed a company's productivity in percentage terms. "American unions are more drastic and demanding," says Kia's Park. "We are listening to our employees, trying not to have confrontations." All that helps explain why a thriving network of suppliers and parts manufacturers has sprung up around the Kia, Peugeot Citroen and Volkswagen plants — a euro20.8 billion ($26.8 billion) a year industry that employs 76,000 Slovaks. more: news.yahoo.com