The Korea Times reports that Kia Motors’ plan to construct a plant in Slovakia faces a fresh impediment after the Slovakian government said it would not give additional aid to Kia’s nine auto parts suppliers.
The newspaper reported that former Economy Minister Pavol Rusko had promised to pay the suppliers 663 million Slovensk koruna (US$320 million) as an incentive.
However, current Economy Minister Jirko Malcharek said on Thursday that it is impossible to provide state aid under revised state rules, according to local media sources.
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Malcharek said that former Economy Minister Pavol Rusko promised the money to these companies without the Cabinet’s prior approval.
According to the Slovakian media, Malcharek said the former minister overstepped his powers. Malcharek said he was considering filing a criminal complaint against him with the Office to Fight Corruption.
Kia Motors Slovakia is mulling taking legal action over the issue with the suppliers. “We are considering following measures, and a legal countermeasure would be possible,’’ a spokesman of the overseas corporation said.
But he said there was no formal notification from the Slovakian government over the incentive matter.
A Kia Motors spokesman in Seoul said the headquarters will try to help resolve the issue as soon as possible, adding, “It is certain that the Slovakian government reversed itself on its earlier statements.’’
The Kia plant at Zilina is scheduled to open this December, with an annual production of 300,000 units at full capacity by 2009.
It is one of the largest overseas ventures by a Korean company in history.
