JESSE SNYDER

Hey, come build a plant in sunny Macedonia

Jesse Snyder is senior writer for Automotive NewsJesse Snyder is senior writer for Automotive News
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DETROIT -- Viktor Mizo is all smiles and speaks fluent English as he explains why the Republic of Macedonia would be an excellent spot to build an auto parts plant.

Mizo can rattle off his country's virtues -- low wages averaging about 375 euros a month, 97 percent literacy, universal English-language instruction and business incentives that European Union members "just can't give anymore" -- faster than you can take his business card.

As CEO of the Directorate for Technological Industrial Development Zones, Mizo and three staffers were at the Automotive News World Congress this week seeking investment.

Macedonia is serious about the automotive industry. At Automotive News Europe in Munich, I started getting calls from the country's minister of investment in 2006 urging me to visit him in Skopje.

Then he would admit that no auto plants had opened yet.

Seven years later, Macedonia has 50 parts plants, including one owed by Johnson Controls, and 2,500 auto jobs -- and Mizo has a directorate, staff and a travel budget.

It wasn't Mizo's considerable charm that held my attention, but a sense of déjà vu when he listed Macedonia's advantages and gave one-sentence dismissals of rival countries. If I closed my eyes and swapped place names, I might as well be back in Ladislav Glogar's office in the Czech Republic in 2004.

Glogar, then chairman of supplier Autopal, was a week into the EU's 10-country expansion and in overdrive mode wooing German automakers. Glogar simultaneously touted Czech wages as a fifth of German wages while discounting even lower wages in Indian and Chinese. He had a lovely "cost of distance" argument about the fragility and recovery time of long supply lines.

Almost a decade later, Czech auto parts making is booming. And Mizo and his rivals from Morocco to Tunisia to Moldova want some of the action, too.

Mizo keeps it punchy when asked about this rivals.

"Now Czech wages are too high to be a low-cost country."

"Wages are low in Moldova, but it has no middle managers so for a 1,500-worker plant you must hire 25 ex-pats."

"Tunisia is too politically unstable."

"Morocco can supply Spain and Portugal, but for central Europe it's too far west."

Forget the arguments. Here's my take.

Just nine years after the EU expanded eastward, the new EU is developing a strong middle class, and the low-wage auto-parts frontier has shifted to eastern Europe and north Africa.

The same powerful economic forces of auto manufacturing that helped create the developed world keep spreading. If you look closely, you can watch the nation-building influence of the auto industry at work, even as far afield as Macedonia.

You can reach Jesse Snyder at jsnyder@crain.com.

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