[Winger]

Jaguar was thinking of building a new factory in North America, but now it turns out that the company will be building the factory in Slovakia instead.

Slovakia has already attracted other carmakers. Volkswagen builds a range of models there including its Touareg and Audi Q7 flagship SUVs at its Bratislava plant, South Korea’s Kia produced more than 300,000 vehicles in the country last year while PSA/Peugeot-Citroen’s Slovak unit made more than 255,000 vehicles last year.

Prime Minister Robert Fico said he was committed to boosting the country’s premium car sector and would work closely with Jaguar Land Rover to ensure the plant is built in Slovakia.

I'm willing to bet the price of labor is a bit less in Slovakia than it is in most of North America. So I can't be too surprised with this news.

 

[Predator]

That's most likely the case and Robert Fico may be giving them financial incentives of some kind.

 

[Winger]

The whole practice of governments paying companies to set up shop in their country seems odd to me. On one hand it makes sense, but on the other hand it seems like governments shouldn't be subsidizing huge businesses. I would agree with it more for small businesses, but with large ones it seems like corporate welfare. They already have enough money to build the factory wherever. The subsidies are just to attract the factory to their jurisdiction.

 

[Predator]

A large manufacturing factory would create jobs while boosting the local economy. Jaguar won't say no when they can lower their production costs in terms on wages and most likely get a tax reduction of sorts, a better deal than if they were to remain in America. The bottom line is profit.

 

[Winger]

I think there are a few more things to think about than profit. It matters the location in that it will have so be close to markets for shipping. It also matters that there is a culture of quality in the country. People need to care about their work.

 

[Predator]

I'm not too familiar with the work culture in Slovakia but thank you for correcting me about the shipping advantage that it presents. Always good to be well informed.

Isn't the US one of the main targeted markets for the XE?

 

[Winger]

Yea, I think so, but also remember China.