Most major corporations avoided Slovakia even after the end of communism, wary of its authoritarian ruler and economic cronyism

Most major corporations avoided Slovakia even after the end of communism, wary of its authoritarian ruler and economic cronyism. But with political and economic reforms, the new European Union member is attracting more investment — led in large part by major car makers, and turning the nation into an unlikely auto hub. Over the past two years, PSA Peugeot Citroen and Kia Motors Corp. have started building plants in Slovakia that will produce a total of 500,000 cars per year beginning in 2006. In both cases, the nation of just 5.4 million people beat its larger neighbors — including Poland and the Czech Republic — in bidding for the factories. Auto parts makers were quick to follow, including Getrag Ford Transmission, a joint venture between Ford Motor Co. and Germany's Getrag Group, which last month announced plans to build a $399 million parts plant in eastern Slovakia. "People who work in the automotive industry have believed that (Slovakia) would set out on this road," said Ludovit Ujhelyi, executive vice president of the nation's Automotive Industry Association. "But it has to be said honestly, even we did not anticipate that Slovakia would turn into a 'Detroit.'" Alain Baldeyrou, general director of Peugeot's project in the western city of Trnava, said "location was the key." The company wanted to get closer to its important markets in central and eastern Europe, where sales have been growing. Slovakia's proximity to EU's older members Austria, Germany and Italy was also a factor. Ronald Weiser, the former U.S. ambassador to Slovakia, says many American companies "feel that Slovaks are the best workers they have in Europe."