May 16, 2016 The Wall Street Journal
PESQUERÍA, Mexico—The new governor of a northern Mexican state is balking at the tax breaks, land grants and other public perks that have underwritten the country’s automotive boom of recent years.
Nuevo León Gov. Jaime Rodríguez, whose nickname El Bronco plays on his headstrong style, and his aides are refusing to honor a large portion of the incentives promised by the previous state government to woo a $2.5 billion new assembly plant by South Korea’s Kia Motors.
“We aren’t against foreign investment,” Mr. Rodríguez said. “We are against a previous government that exceeded the limits.”
Officials in Nuevo León, whose capital Monterrey is often seen as Mexico’s business center, say the incentive package amounts to nearly 28% of the investment by Kia and its suppliers, and they are challenging provisions worth up to $100 million, including a 20-year holiday on payroll taxes.