Tesla Motors car assembly plant in Hungary? Oh, really?

Hungarian government propagandists have a new strategy – they plant fake, “feel-good” stories about the economy in the media. Recently articles appeared that Hungary’s debt upgrade is “imminent” and would be well-deserved. Keeping the country’s debt in “junk” is unfair.

Portfolio.hu published an elaborate story about the government’s efforts to attract Tesla Motors, quoting Péter Szijjártó, Minister of Foreign Affairs, that Hungarian diplomacy is developing a relationship with the innovative car manufacturer. (Read here the Tesla story.)



Ms. Réka Szemerkényi, Hungarian Ambassador to the U.S. already visited Tesla’s HQ in California. Hungary’s Ambassador in the Netherlands met the head of Tesla’s European assembly unit and she learned from “delicate hints of the management” that Tesla is planning new cheaper models and may set up a new assembly or manufacturing unit in Central Europe. Hungarian diplomats already figured out that Hungary, thanks to its geographical location, would be “a logical choice” and there is a “realistic possibility” that the need to a new plant may arise in 2016.

Mr. Szijjártó ordered Ms. Judit Czakó of the Consulate General of Hungary in New York, to organize a “targeted company visit” in view of expectations that Tesla may start looking for host countries for a potential new manufacturing plant in early 2016. There would be “multiple benefits” if Tesla chose Hungary, the plant would not only create jobs, but it would also give local e-mobility and electric car usage a boost and medium-sized companies are just waiting for such a great opportunity.

Ms. Judit Czakó of the Consulate General of Hungary in New York supposed to organize a “targeted company visit” at Tesla Motors.

Ms. Judit Czakó of the Consulate General of Hungary in New York is supposed to organize a “targeted company visit” at Tesla Motors.

There is only one problem with the story. Tesla has not indicated any investment plans in Hungary, not even a hint from the company that they are interested!

Tesla is close to California’s Silicon Valley and its open and tolerant culture is light-years away from Hungary’s authoritarian regime. High-tech companies are leaving Budapest as fast as they can, and manufacturing cannot find suitable labor since educated people are emigrating.

Apollo Tyres of India is building a factory there and they are having difficulty finding qualified staff; foreign investors were misled when they were told about abundant cheap and well-educated labor. Hungary’s educational system has collapsed and skilled workers left for more lucrative pay in other parts of the EU. “The people with several years of experience that you would readily hire are just not there in the labor market for now,” said the Head of Human Resources at Apollo Tyres. (Read more here.)

Hungary’s rampant corruption and its toxic mix of nationalism, institutionalized racism and anti-Semitism have created an unfriendly political and business environment. Rating agencies are unwilling to upgrade the county’s debt from “junk” citing “opaqueness” in finances, a reference to Hungary’s out-of-control crony kleptocracy. The government needs to change its policies and follow some of the suggestions outlined by US Ambassador Colleen Bell’s recent speech at Corvinus University.

Childish communication tricks won’t bring new US investors to Hungary – only policy changes will.

György Lázár

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