Tensions Surface After Kia’s Inauguration Of Their Mexican Plant

After Kia launched their new $3 billion state-of-the-art facility in Mexico last week, the mayor of a nearby town spoke up in disappointment.

Miguel Angel Lozano is the mayor of Pesqueria, a small Mexican town just two hours away from Texas. It also just so happens that Kia’s new plant covers about 1,200 acres in Pesqueria and according to Lozano, his town has pretty much nothing to show for it.

During last week’s ceremonial opening, Lozano thanked Kia officials for their investment but then went on to voice his concerns, unsure if the economic benefits presented by the state and federal politicians would ever materialize.

According to Autonews, Lozano stated that there was little corresponding investment in infrastructure.

“Our municipality doesn’t have installations for public safety, or for the municipal council, or for firefighters, or civil protection, or adequate highways, or even a simple traffic light,” said Lozano.

Such a statement goes a long way to reflect what has been a bumpy ride into Mexico for Kia, highlighting the pitfalls automakers and suppliers face when trying to look for lower-cost labor and larger North American production facilities.

The first issue with Kia’s project, which was announced back in 2014, surfaced in October 2015 when a new governor for Nuevo Leon took office on a “hard-line anti-corruption platform”, taking issue with the incentive package his predecessor prepared for Kia in order for the Korean automaker to land the facility. Under this new governor’s supervision, the state and Kia went back to debating more favorable terms for Nuevo Leon.

“We are going to work and help resolve some of the problems of Pesqueria, and I also know that the Kia company is going to help,” said governor Jaime Rodriguez Calderon while addressing the issues raised by Pesqueria mayor Miguel Angel Lozano.

Production in Pesqueria started this May with the 2017 Kia Forte Sedan and Hatchback models rolling off the assembly line. By the end of the year, Kia hopes to build around 100,000 vehicles at the site.