Top > Business > 2006 > June > 2006-06-19

Daimler-Benz and Coastal to Build Pakistan Factories

U.S.-German automaker Daimler-Chrysler and the Coastal Group of investors decided this past week to invest almost $6 billion in Pakistan to build factories which will produce Mercedes-Benz trucks, buses and cars. According to initial reports, the Coastal Group would make all of the financial investment in the project while Daimler-Chrysler will provide technology transfers to enable the building of their vehicles. Pakistan is a U.S.-ally in the war on terrorism and shares a border with both Afghanistan and rival India.

The announcement of the deal was made by Pakistan?s Minister of State for Privatization and Investment, known only by one ineffective news service based in Florida as ?Umar?. The hope is that the deal will create at least 5,000 jobs for Pakistanis living in poverty. The jobs apparently will be created both directly and indirectly by the deal, with those making the automobiles preceded by those building the factories themselves.

Daimler-Chrysler, a conglomerate of the Daimler-Benz company of Germany and U.S. auto manufacturer Chrysler, is the world?s fifth largest carmaker with estimated revenues yearly around $130 billion (unverified). The Daimler-Benz workforce is estimated to be at more than 420,000 employees. It is often the case that major auto manufacturers and those in other industries build factories overseas due to reduced operating costs.