After a seven-year delay Apollo Tyres will open a factory in Hungary

Back in 2008 I wrote a post titled “A foreign investment victim of Hungarian political strife.” It was about a large factory the Indian company Apollo Tyres was planning to build in the city of Gyöngyös, which would have employed more than 900 people by 2010. Moreover, in the following five years the company was planning to expand the facility and hire another 600 workers. Viktor Orbán, then in opposition, made sure that the project, which would have been a feather in the cap of the Gyurcsány government, would not become reality.

Another large project of the Gyurcsány government, the Mercedes factory in Kecskemét, was saved from the wrath of Orbán only because Kecsekemét was a Fidesz city. Gyöngyös, on the other hand, was led by an MSZP mayor with a socialist majority on the city council.

At first, green activists demonstrated against the establishment of the factory, believing that it would be harmful to the environment. They were then joined and egged on by Fidesz politicians. Viktor Orbán eventually managed to receive permission from the court to hold a referendum on the issue. At that point Apollo decided that it had had enough and pulled out of the deal.

At that time I wrote:

The country is stunned. Or at least the government is and about half of the population. They simply can’t understand how it is possible that a political party for its own narrow political gain is capable of going against the interest of the country. A thousand families would have benefited directly from employment at the factory while the whole city of Gyöngyös would have reaped the benefit of a higher tax base. They keep repeating that if the foreign investment happens to be in Fidesz-held cities (like Tatabánya and the Japanese tire factory) there are no environmental concerns. Also no one complained when Mercedes Benz decided to establish a factory in Kecskemét. The Fidesz mayor cooperated wholeheartedly with the central government to push the deal through. I heard an interview with the undersecretary of the ministry who was in charge of negotiations with the Indian firm, and he was near tears. I don’t blame him.

Yesterday Viktor Orbán laid the cornerstone for the Apollo Tyres factory. Apparently, it will open its doors in 2017. Seven years were lost for those more than 900 men and women who could have had good jobs. This time, just as was most likely the case in 2008, the Hungarian government gave a subsidy totaling €97.7 million (approximately 29 billion forints) for the construction of the tire plant. The subsidy was approved by the European Commission in September 2014. The only difference is that the plant will be in Gyöngyöshalász, a village not far from the city of Gyöngyös.

Viktor Orbán made a speech to mark the occasion. He started in English: “I have to apologize but because we are in Hungary and we have many Hungarians all around us, it is better to speak English.” Huh? The rest of the English part of the speech wasn’t much better. Addressing his “dear Hungarian Fellows and our Host,” he suggested that in four or five years things will be completely different. “Changings are not just deep but abrupt at the same time.” As we learn later from the Hungarian part of the text, Orbán believes that middle-aged people will have no serious role to play in these “changings.” Time has passed them by. His generation, “those around fifty, will not be more clever, more educated, and more competitive. It will not be this generation that will advance this country.” Not a surprising observation from the prime minister of a country where the concept of continuing education is practically unknown.

MTI / Photo Szilárd Koszticsák

MTI / Photo Szilárd Koszticsák

Orbán didn’t dwell on the past difficulties Apollo Tyres encountered in Hungary. Instead, he turned to his favorite topics. One is the family. Apollo Tyres is a family business owned by Onkar Kanwar and his sons, which came in handy. In fact, he addressed his whole speech to the “Kanwar family.” He also emphasized the importance of friendship and respect. He even managed to squeeze a bit of Christianity into his speech, which struck me as most inappropriate. It is hard to know why “after Easter” we are especially aware of the fact that “not all depends on investment, square meters, machines, profit, and money.”

Of the two virtues, friendship and respect, the latter is more important to Viktor Orbán. Although he talked about mutual respect, his focus was on respect for Hungarians. “I was delighted to hear those who spoke before me and who spoke of Hungary with great respect. Perhaps they don’t know that we are a stubborn and proud people. Of course, we must make a living and therefore we accept all kinds of jobs in order to survive, but not all jobs give satisfaction. We don’t like to work in a place where we are not respected; we don’t like to be an employee in a factory where we feel that the employer sees us only as a source of labor.” So, Indians, your work is cut out for you.

The rest was the usual fluff, but there was one thing that caught my eye that has nothing to do with the current project. Naturally, Viktor Orbán avoided talking about 2008, when he and his party prevented Apollo Tyres from building a factory. But he did talk about the more recent past. About 2010. He said: “Who would have believed in 2010 when Hungary was in a state similar to Greece today that it would be possible to create such a collaboration, as a result of which even investors from a far-away country notice Hungary and think that it is worth giving a vote of confidence in its future?” Why did this short passage catch my eye? Because you may recall that during the summer of 2010, when the European Commission refused to accept the 7% deficit Orbán tried to sell in Brussels, first Lajos Kósa and later Péter Szijjártó announced that Hungary was close to insolvency and compared her economic situation to that of Greece. Their “Chicken Little” pronouncements precipitated a worldwide panic for a few days. At the time we all thought that Kósa and Szijjártó were acting on their own and that they were irresponsible bumpkins. But after the sentence in this speech, I suspect that Viktor Orbán, then in Brussels, told them to overstate the Hungarian situation (and thereby create a mini-panic) to strengthen his hand with José Manuel Barroso.

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Member

I tip my hat to you, Eva. A very shrewd and accurate observation about the overstatement of Hungary’s plight in the Summer of 2010.

Max
Guest

The artificial hysteria in summer 2010 had sent the EUR/HUF cross from 260 to 290 within a couple of days. Rumour in town at that time had it that Fidesz cronies had beforehand shorted the forint on the futures market.

So the storm in the teacup not only earned political benefits, but also financial ones – at least for some in and around Fidesz. The country’s overall interests were ignored even at the very beginning of their governing cycle.

ivanfgfttge3
Guest
Re the HUF-scare. Sure it was premeditated and fideszniks made a lot of money on it — but, hey, that’s part of the perks of being a politician. Orban and his people always manipulate the decision makers in Brussel. This is nothing new. The bureaucrats in Brussels have too many problems and issues on their hands, it’s almost irrelevant if it turns out that Orban and his people lied, repeatedly, again and again. Money keeps flowing to Hungary (and thus into Orban’s coffers) so what’s the big deal? Orban viscerally hates the inhibited, too polite, cumbersome, overly procedural, weak, hollowed out Western-Europeans who don’t dare to act in their own (ie. meaning also personal) interests. They lost their will to survive in Orban’s views and thus are doomed. Orban has no inhibitions, he grabs the opportunities, and he has the killer’s instinct which includes totally disregarding capuccino-sipping bureaucrats and politicians and laughing at them. While the bureaucrats keep transferring those countless billions to Hungary (yes, to companies owned by Orban via fronts) Orban is fighting them, taking advantage of them and receiving so much enjoyment from this fight. So it’s the best of all worlds. You get paid by your… Read more »
petofi
Guest

And you might have added: “And this is why Orban is persona non grata in those countries not named Albania, Kazakstan, and Azerbaijan.”

FelTamadas
Guest

“ivanfgfttge3
April 12, 2015 at 5:24 am
Re the HUF-scare. Sure it was premeditated and fideszniks made a lot of money on it — but, hey, that’s part of the perks of being a politician.

Orban and his people always manipulate the decision makers in Brussel. This is nothing new. The bureaucrats in Brussels have too many problems and issues on their hands, it’s almost irrelevant if it turns out that Orban and his people lied, repeatedly, again and again. Money keeps flowing to Hungary (and thus into Orban’s coffers) so what’s the big deal?

Orban viscerally hates the inhibited, too polite, cumbersome, overly procedural, weak, hollowed out Western-Europeans who don’t dare to act in their own (ie. meaning also personal) interests. They lost their will to survive in Orban’s views and thus are doomed.”

It would be sufficient to publish these sentences if Ivan for the remaining days of the Orban junta.

The rest of the reports are not changing anything in Hungary.

István
Guest
Hungary would have been far better off opening an Apollo types plant in 2008-2009 than today. Apollo announced its deal to buy US Cooper tires for $2.5 billion on 12 June 2013. Investors worried the deal was too expensive at a 43% premium to market price, and that Apollo would have to take on huge debt to finance the purchase. Its stock fell 25.43% the day after the deal was made public. The deal fell apart by December 2013. From revenue of $300 million in 2002-03, Apollo Tyres expanded rapidly to become a $2.6 billion company by the end of fiscal 2013. The growth has been much too fast and it is indicative of a firm that over reaching its credit limits. Difficult market conditions and labour unrest made Apollo Tyres Africa significantly reduce size and close plants, it entered voluntary business rescue proceedings in October 2014. Apollo’s notice stated it was financially distressed and expects difficulty in paying all of its upcoming debt obligations. (See http://www.financialmail.co.za/features/2014/10/02/tyres-the-smell-of-burnt-rubber) Like its African operations the Hungarian operation will operate as a subsidiary. The new unit at Hungary will be funded by internal accruals, debt at the European subsidiary level, and most importantly by… Read more »
Guest

Let’s hope that Apollo survives in Hungary!
Istvan’s remarks probably apply to many of those projects that Fidesz is so proud of – the Hungarian government offers a lot of money for new jobs and nobody knows how long those jobs will exist.
Not too much OT:
What about Flextronics and Schneider Electronics?
Are they still active in Hungary at all, does anybody here have insider info?
Nokia closed down its Hungarian plant afaik …

Andras
Guest
Fidesz is banning (!) the communications major at college level in Hungary – except for the National Public Service University which is essentially a university minting partizan fidesznik secret service/police/military personnel. Not only that but Fidesz is also banning other majors like ELTE’s international relations program too. Since all (!) these programs are paid for by the students paying hefty tuition fees there is no conceivable reason to do so other than to (A) eliminate ‘problematic’ teachers and (B) make sure that only fidesznik ideology is taught in Hungary. I am told international relations will henceforth be taught only at the NPSU (perhaps at Corvinus), of course — I guess with more emphasis on friendship with Russia and less on human rights. Fidesz is not content until it completely smothers the livelihood of any and all intellectuals not loyal to it. Some people tend to question whether Fidesz has long-term plans because it looks often that it improvises policy-wise. I say it does and it always had. One such plan upon which Fidesz executes ruthlessly is to inflict pain on perceived “Liberals” in any way it can. Apparently huge enjoyment is being gained from seeing suffering/protesting “urban/liberal/jewish intellectualsetc”. In other… Read more »
Andras989
Guest
Fidesz is banning (!) the communications major at college level in Hungary – except for the National Public Service University which is essentially a university minting partizan fidesznik secret service/police/military personnel. Not only that but Fidesz is also banning other majors like ELTE’s international relations program too. Since all (!) these programs are paid for by the students paying hefty tuition fees there is no conceivable reason to do so other than to (A) eliminate ‘problematic’ teachers and (B) make sure that only fidesznik ideology is taught in Hungary. I am told international relations will henceforth be taught only at the NPSU (perhaps at Corvinus), of course — I guess with more emphasis on friendship with Russia and less on human rights. Fidesz is not content until it completely smothers the livelihood of any and all intellectuals not loyal to it. Some people tend to question whether Fidesz has long-term plans because it looks often that it improvises policy-wise. I say it does and it always had. One such plan upon which Fidesz executes ruthlessly is to inflict pain on perceived “Liberals” in any way it can. Apparently huge enjoyment is being gained from seeing suffering/protesting “urban/liberal/jewish intellectualsetc”. In other… Read more »
DrasAn3333
Guest
Sorry, trying for the 3rd time, something’s not working. Fidesz is banning (!) the communications major at college level in Hungary – except for the National Public Service University which is essentially a university minting partizan fidesznik secret service/police/military personnel. Not only that but Fidesz is also banning other majors like ELTE’s international relations program too. Since all (!) these programs are paid for by the students paying hefty tuition fees there is no conceivable reason to do so other than to (A) eliminate ‘problematic’ teachers and (B) make sure that only fidesznik ideology is taught in Hungary. I am told international relations will henceforth be taught only at the NPSU (perhaps at Corvinus), of course — I guess with more emphasis on friendship with Russia and less on human rights. Fidesz is not content until it completely smothers the livelihood of any and all intellectuals not loyal to it. Some people tend to question whether Fidesz has long-term plans because it looks often that it improvises policy-wise. I say it does and it always had. One such plan upon which Fidesz executes ruthlessly is to inflict pain on perceived “Liberals” in any way it can. Apparently huge enjoyment is… Read more »
Top
Guest

Tapolca was very active, Ajka not really. This means that the right wing voters were more active. As usual the lefties are not very enthusiastic.

BI
Guest

What can we learn from the Tapolca election? So far only one thing:

The myth of left-wing revival is over. The election proved a complete disaster for the left. The left candidate, Ferenc Pad suffered a defeat so catastrophic that even in 2014 election the left got more votes than now. The Tapolca election showed the total collapse of the corrupt and incompetent left wing.

This election shows that the left has no chance to win in 2018, zero, none. They get 25% in a district that the winner MUST carry in 2018, it is a failure like no other.

Jobbik is now the clear challenger for 2018, either they will win or Fidesz remains in power.

Morningstar
Guest

It is no wonder that MSZP is doing poorly in the election. Only a few days before the election, Ferenc Gyurcsany attacked the corruption of MSZP from the Laci Puch era. He said Puch had dealings with Simicska and they were thieving together, cooperating. Gyurcsany is respected among left wing voters so why would they vote for the candidate of the MSZP party a few days after Gyurcsany explained how corrupt the MSZP party was when he saw into their operations.

The timing of this attack from Gyurcsany is really curious a few days before the election almost like he wanted to ensure that MSZP does not do too well in this election??

Guest

If I were a conspiracy theorist I’d say that GY wanted Fidesz to lose and knew that Jobbik is very strong – so he made more anti-Fidesz voters join Jobbik by antagonising them against the left …
But we’ll surely see a more detailed analysis later by Eva and the other commenters here.

Polgár
Guest

I agree that MSZP-DK’s 26% is a total disaster.

But like it was said an earnest Tapolca or Sümeg voter would never ever vote for an Ajka-man as a person from Ajka is a communist and we hate communists.

In any case I agree that this district would have been an absolute must to carry if the left wing ever hoped to win.

Let’s not forget that Orban has about 5-800 thousand voters in reserve from Romania and Serbia who don’t vote in these by elections, only in the general elections.

MSZP-DK’s joint result means that the aggregate right-wing has a joint 70% in the region.

Moreover Orban’s GOTV machinery this time around worked pretty well, Jobbik’s was strong too. The left has no machinery whatsoever.

Point is: Fidesz is still king and Jobbik is queen now.

The left-wing (which is anyway divided among half a dozen formation) is dead in the water. It simply cannot offer anything to rural, conservative people — who are the single most important constituency in this current election system.

Egon
Guest

Jobbik (unfortunately) became a mainstream party. People demanded that Jobbik is acknowledged that it is a mainstream party. Nobody cares about the jews and gipsies, Jobbik just seems to want something which voters also want and which the left-wing is unable to articulate. Jews and gipsies are the ‘sacrifice’ for most voters. Voters are not intellectuals, they want earnest, god-fearing Hungarians who will defend them from the foreign/Western/modern influence. Plus people here like Fidesz. Like it or not rural voters adore Fidesz and hate the urban communists. Communists will not contaminate the lives of earnest rural people.

exTor
Guest

Unsure what “demanded that Jobbik [be] acknowledged [as] a mainstream party” means, Egon. Jobbik exists as an accredited party here in Hungary. People vote for it, enough so that it will likely win in Tapolca this weekend.

Your assessment of Magyars (that most really do not care about the Jews and the Roma) is probably right on. That I would label as benign antipathy. Active antipathy is what Jobbik preaches. Not sure how that would translate were Jobbik ever to come to power.

As for the taint of big-cee Communism being the weight around the neck of the Hungarian Left, wouldn’t a quarter century since the Big Change be enough to make people forget old associations? Besides, wasn’t Gyurcsány already prime minister once?

What party in Hungary constitutes the center?

MAGYARKOZÓ

tappanch
Guest

Veszprem 3rd election district:

2015 [2014] . 1 precinct is missing from the 2015 results.

LMP 602 [1276] , down 52.82%
Fidesz 10,093 [18,570] , down 45.65%
Left 7,712 [ 11,769], down 34.47%

Turnout 29,496 [43,422], down 32.07 %

Jobbik 10,354 [10,110] up 2.41%

Sources:
http://valasztas.hu/dyn/idokozi_pv14/szavossz_20150412/hu/M19/E03/evkjkv.html
http://valasztas.hu/dyn/pv14/szavossz/hu/M19/E03/evkjkv.html

exTor
Guest

Veszprém County Popular-Vote Percentages:

Jobbik … 35.3% … up 11.8 points
Fidesz … 34.4% … down 8.8 points
MSZP … 26.3% … down 1.1 points

MAGYARKOZÓ

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