In this environment, PSA is a curious oddity. The French carmaker has neither VW's history in the region nor Kia's brash new presence (in June, I saw Kia ads everywhere, promoting things such as beer festivals and ZZ Top concerts, all part of a campaign to establish KIA of SlovaKIA as the Slovak car, like Škoda is the Czech car), but PSA might prove more visionary than either of these competitors. First, PSA is focused on emerging markets, where a new dynamic is flipping the status quo. That is, for the first time, car sales in emerging markets are surpassing those in mature markets, such as Western Europe and the United States, and will do so for the foreseeable future. Near Trnava, PSA assembles its Peugeot 207, a supermini specially designed for new markets. Second, PSA has allied itself with juggernaut Toyota. A PSA/Toyota joint venture in the Czech Republic makes the Peugeot 107, the Citroën C1, and the Toyota Aygo city cars. In Trnava, the Toyota production system, from logistics to manufacturing methods, is in place.
Sister plants, physically close but across national borders, are becoming the default mode in the little tigers. They share suppliers, reduce redundancies, and increase complex synergies, one of which is political leverage. In this part of the world, the political winds are always blowing - and changing directions. An automaker in two countries can play leaders off one another, jockey for tax breaks and deals, and, on a positive note, bring countries together in ways that communism and contemporary politics have failed to do. Presently, VW actually has three sister plants, in Slovakia, the Czech Republic, and Hungary, where the Audi TT is assembled. Kia's sister plant is under construction in the cabbage fields outside of Ostrava, in the Czech Republic; it opens in 2010, just fifty miles from Zilina. Once that happens, claimed Bae excitedly, "We'll make a lot of profit! We'll have high name value!"
So, in this ongoing story of industrial transformation on wheels, has Slovakia been innovative or exploited?
Both, it seems. Innovation involves novel means and methods. Kia's rapid buildup of one of the world's most high-tech auto plants fits the bill. As does PSA Slovakia's small-car, new-market gambit. VW, with its costly land yachts and labor commitments, is more allied to yesterday. Certainly, the foreign giants have exploited Slovakia, but what else is new? In the global economy, especially if you're small and perceived as backward, you don't get much without giving something away. As interesting as the auto plants themselves, which are now a fait accompli, is the atmosphere of change that Slovakia has seeded, watered, and grown. And sprinkled with audacity.
To land its auto plants, Slovak leaders gambled and broke rules. They thought outside the box of democratic capitalism. And for now, the country is on a roll. It has avoided the low-quality label of India's fledgling auto plants. And its segment of the auto industry is making money. Ford, GM, and Chrysler have lost billions since 2005, enough to build numerous Hyundai/Kia sister-plant complexes, which cost about $4 billion a pop. Sure, Slovakia has some corrections to make. Transparency might have to be forced, but it will come. Carbon awareness isn't exactly a hot topic there, either, as attitudes toward emissions seem more 1957 than 2007. But Slovakia doesn't need alimony and is filled with young blood. Only time will tell if the automakers will stay or move on. But for now, the littlest tiger is a kind of automotive wunderkind. Even Andy Warhol, the man from nowhere, would be a little impressed.