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BMW winces as SARIO slips up

Government representatives have denied accusations from their own honorary consul in Baden-Würtenberg that they have botched what would have been the third largest investment in the history of Slovakia after releasing information about an unofficial meeting with German car giant BMW.
The company has been considering several Slovak regions, along with other sites in neighbouring central European states, as a possible location for a $440 million investment into a new auto construction plant.
The government had called for a meeting with BMW on October 24, in the hope of gaining key information that would help it better prepare the Slovak regions bidding for the investment. But following the release of information to local media that the meeting had taken place, Roland Kissling, Slovakia's honorary consul to the south-German region of Baden-Würtenberg, said there was a threat that BMW would now not come to Slovakia.


Slovakia's chances of winning BMW's latest central European investment is not in danger, investment agency SARIO says.
photo: Courtesy BMW

Government representatives have denied accusations from their own honorary consul in Baden-Würtenberg that they have botched what would have been the third largest investment in the history of Slovakia after releasing information about an unofficial meeting with German car giant BMW.

The company has been considering several Slovak regions, along with other sites in neighbouring central European states, as a possible location for a $440 million investment into a new auto construction plant.

The government had called for a meeting with BMW on October 24, in the hope of gaining key information that would help it better prepare the Slovak regions bidding for the investment. But following the release of information to local media that the meeting had taken place, Roland Kissling, Slovakia's honorary consul to the south-German region of Baden-Würtenberg, said there was a threat that BMW would now not come to Slovakia.

"I am afraid that BMW will draw conclusions from the release of the information and Slovakia won't benefit. It was clearly spelled out during the meeting that no detailed information on the talks, neither its participants nor its content, should be disclosed to the public," Kissling, who had attended the meeting, said.

However, government representatives rebuffed the consul's claims, saying that at no time had BMW asked for information on the meeting to not be disclosed. "If they had done so we, of course, wouldnşt have released anything," said Roman Minarovič, head of the government investment agency SARIO, adding that the release of the information would not "lower our chances of getting this investment".

Analysts have said that the squabble between Kissling and the government, as much as the release of the information, has highlighted the country's inexperience in dealing with foreign investors in comparison with the Czech Republic, Hungary and Poland.

According to Miloš Božek, an analyst with J & T Securities, the Slovak government was still in the process of learning how to deal with foreign investors, while the Czech Republic, Poland and Hungary had already amassed years of experience. "In these countries, there is a clear concept of how to attract a particular investor. There are no hiccups as an investment goes along. This is the fundamental difference between them and Slovakia," he said.

BMW officials denied they were unhappy but said they preferred government representatives to be more discreet with information on any investment meetings. "It is not a big problem for us that information about the meeting was released. We just don't recommend a country's representatives be too open because local businesses then have higher expectations," said Jürg Dinner, spokesman for BMW. "But I can say is that it [talking to the press about the meetings] certainly doesn't influence the results of the tender directly," he added.

However, Kissling told The Slovak Spectator November 7: "BMW officials know how to get to the press with news they want to spread. But they also know how to keep the news they don't want to be published out of the press. They [BMW officials] might become pretty angry with potential partners who have no understanding of this and cannot play by the rules of the game," Kissling said.

Slovak ambassador to Germany Ján Foltín, who participated in the meeting with BMW representatives, was dubious of the motive behind Kissling's attack. "Well, we know Mr. Kissling, and exaggeration is a part of his nature. He just wanted to be a bit more important than he is," Foltín said. He added that with many Slovak regions as possible bidding for the BMW investment, the information had been made public.

He added that it was important for these regions to know the most important conditions BMW felt should be met before they handed in their projects. The tender period for the plant's investment location will be closed on November 17, and four Slovak regions have officially bid for the investment.

"We have to motivate these regions somehow. Even if Slovakia doesn't win this deal, these regions can attract other businesses and will be prepared to react to their demands, based on what they learn from this project. It was necessary to meet with the German side to find out what they are looking for and what they want," Foltín said.

But for Kissling, the issue remains a case-study of government representatives behaving unprofessionally and an example of how much they still have to learn in dealing with investment matters. "By a huge distance, professionals know how to initiate talks and how to conduct them; whereas those who are not professional tend to bring everything to the public and proudly present their fictive success," Kissling said.

"These countries [the Czech Republic, Hungary and Poland] behave as real professionals. This is one of the reasons why they are leaders in attracting foreign businesses into their economies," he added.

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