Slovakia, the `New Detroit,' Turns Carmaking Into Growth Engine

Workers on a plateau in western Slovakia are finishing PSA Peugeot Citroen's new 700 million-euro ($921 million) plant, laying rails and paving roads across barren fields to ship 300,000 cars a year to markets around Europe. Peugeot, Europe's second-largest carmaker, chose Slovakia over Poland, where wages are 50 percent higher, at a time when its earnings are being squeezed by record prices for commodities. South Korea's Kia Motors Corp. also will build a 1.1 billion-euro plant in Slovakia, its first in Europe. ``We looked for a place with good infrastructure, access to Central European markets, transit possibilities to Western Europe and a skilled labor force,'' says Alain Baldeyrou, 59, head of Peugeot's Slovak plant. ``All this we found in Slovakia.'' International companies, including Ford Motor Co., pledged last year to invest a record 1.7 billion euros in Slovakia, where wages and taxes are lower than in Poland and the Czech Republic. Sixteen years after the fall of communism, Slovakia is the fourth- fastest-growing nation of the 25-member European Union. U.S. President George W. Bush will see the changes today when he visits Slovakia's capital, Bratislava, to meet Russian President Vladimir Putin in a medieval castle overlooking the Danube River. Prime Minister Mikulas Dzurinda's efforts to ease labor rules and cut taxes are one way in which Eastern Europe has become an engine for growth in the EU. Slovakia, with seven other Eastern European countries, joined the EU last May.