When Magna International announced on Wednesday that it is moving production out of Slovenia, our left-wing government (and the left-wing ideologues who built the plant) should have felt really bad. The international corporation, worth tens of billions of euros, has let us know between the lines that Slovenia is a bad place for doing business – both from the point of view of tax laws and the complexity of bureaucratic procedures. The PR message that there is a shortage of orders, that the pandemic is to blame, or the supply chain, the logistics, and so on, is, of course, empty – if that were the case, then they would not have moved production to Magna’s other plants, including the one in Graz, which is just 50 kilometres away. But our government saw the departure as an opportunity for self-promotion – to insult a global company and make moralistic remarks about how frivolous Magna is (?!) and how it will have to pay back the 18.5 million euros in subsidies. Once again, they missed the opportunity to look inwards.
Minister of the Economy Matjaž Han did not ask himself and his coalition partners whether Slovenian companies might be haunted by overly socialist policies, lengthy bureaucratic procedures, and excessive wage burdens (including the latest completely unrealistic increase in the minimum wage, which was pushed without Han and Minister of Finance Klemen Boštjančič’s opinion by Minister of Labour Luka Mesec).
Han instead decided to play the cheap moralist and assured the general public that “the state will demand from Magna the repayment of the state aid received years ago, worth 18.5 million euros, which the state will demand back with interest.” This was a completely unnecessary comment, since the company’s management had already said in its announcement about its leaving Slovenia that it would repay the state aid.
Job losses as “good information”
The fact that Han lives in his own world is also clear from his comment on the company’s statement that, for the time being, they intend to set up a support and development centre on the site of the paint shop to support Magna’s other sites around the world. “From an environmental point of view, this is relatively good information.” The Minister of the Economy of the Republic of Slovenia stated that if jobs are disappearing, from an environmental point of view, this is good information?! An almost unbelievable statement and only possible in the current government – even in the Šarec government, no one would have dared to say such a thing. And the fact that the paint shop also complies with the Austrian environmental standards, which are much stricter than ours, is irrelevant anyway – we do not expect the Minister to know that. After all, he must be a coalition partner from the Left party (Levica), which is creating environmental alarmism out of the story. What is more alarming is that Minister Han is applauding the departure of jobs to Graz in Austria.
Han is being helped by environmentalists
Han’s utterly unbelievable environmentalist reflection was echoed by Uroš Macerl, co-chair of the Vesna party that did not get into the National Assembly: “Countries with inordinately more farmland than us, fight against any building on farmland, but here we allow factories like Magna to build on prime farmland and water protection areas without a second thought, thus leading to their permanent destruction. Minister Matjaž Han even wants to allow even more building and shorter processes, at the expense of the environment. This is a multi-faceted problem. Firstly, the subordination of environmental policy and the country’s strategic interests – in the areas of land use and self-sufficiency – to the interests of capital. This is also about the neglect of the sustainable aspects of development and, finally, it is the absolute refusal to engage in dialogue with the professional community and civil society. In his arrogance of power, the then-Minister Počivalšek went even one step further and labelled all those who opposed the project in any way as “eco-terrorists,” while organising coordinated attacks on farmers, environmental organisations and other civil society initiatives. In Slovenia, it is commissions and percentages that rule, not vision, as was sadly demonstrated in the case of Magna.”
This is, of course, a completely bizarre position because we are talking about an extremely small piece of land, which is insignificant in the context of Slovenian agrarian production, even if the factory were to be expanded ten times. This has been made clear by the farmers who own the surrounding land.
The lengthy process of obtaining the environmental permits
Although Magma did not point it out, it is empirically clear that the environmental procedures also contributed to its departure – the company has a corporate strategy not to get into arguments with local authorities (not good for business). However, it is clear that the three-and-a-half-year period for obtaining the environmental permit for the production of Fisker cars is not normal – in fact, Magma applied for the permit in May 2018, but only received it during the Janša government in November 2021, and by that time, the production of Fiskers was already underway in Graz.
What international company is going to wait almost four years for the bureaucracy of an insignificant EU country, when it operates in an industry where technology cycles are six months long, and technology changes practically from one day to the next? While Han admitted that the procedures of obtaining permits in Slovenia are too long, he clung to the fact that Magna did not point this out as a reason for leaving (as already said – companies do not want to quarrel with local socialists), but he took this opportunity to once again insult an international company that has a budget of half of the Slovenian budget – he stressed that “Slovenia is certainly not being frivolous here, because it has fulfilled all of its obligations and perhaps even made too many concessions, at best, it was Magna that was frivolous.”
And he said this after a minister of the government in which he is a member had raised the minimum wage to a level where the average worker in a paint shop does not make a penny more in added value, and after our country’s bureaucracy had held up for almost four years the procedure of obtaining an environmental permit needed to produce parts for a new type of vehicle. Who will even want to do business in Slovenia anymore? Foreign capital is clearly permanently unwelcome.
Andrej Žitnik
