Kia's plant during construction last year. Kia's plant during construction last year.

Despite differences, Kia begins operations

Still no resolution over contract obligations of the state of Nuevo León

Although the state of Nuevo León has not delivered all the necessary infrastructure, Kia Motors announced its new assembly plant will commence operations today.

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There were doubts earlier this year that the billion-peso-facility in Pesquería, part of the Monterrey metropolitan area, would begin operating any time soon. In February, the state government was nine months behind meeting its obligations in the contract signed by the previous state administration with the South Korean auto maker.

The new governor, Jaime Rodríguez Calderón, has made it clear he thinks the incentives provided by the state under former governor Rodrigo Medina were excessive, on top of which he claims they are not legal.

Infrastructure in the form of roads and water services, along with the relocation of a gas pipeline, were among the government’s obligations, but according to Milenio business columnist Bárbara Anderson today, the differences between the state government and Kia remain unresolved nearly a year after they surfaced, and no resolution is in sight.

In spite of everything, the auto maker said, it promised the plant would begin operating May 16 and “we made it,” completing construction in a record 16 months.

Kia Motors is targeting production of 100,000 vehicles in the plant’s first year, eventually reaching 300,000 annually.

The number of new jobs created is expected to reach 14,000 when the factory hits capacity, including those employed by affiliated firms.

Anderson wrote today that Kia’s Mexico boss Seong Bae Kim told her early last year that mountainous Monterrey made him and his fellow South Koreans feel like they were at home.

Since Jaime “El Bronco” Rodríguez was sworn in they have probably been wishing they were.

Source: El Universal (sp), Milenio (sp)

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  • TioDon

    Don’t do it Kia; they’ll NEVER do the work. You’ll wind up having to do it. You should have made them do their work before investing in the project. Now you’re stuck….

  • David Nichols

    I’m pretty sure that contract was with the State of Nuevo León, not with the governor.
    And they wonder why foreign investment never reaches the level it could, absent them shooting themselves in the foot with every changing of the guard …

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