Ford on Wednesday said it had agreed a deal with the Romanian government to buy the Craiova vehicle manufacturing plant in the south-west of the country.

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Speaking at the signing ceremony at the Frankfurt show, Ford Europe president and CEO John Fleming said: “This is great news for Ford, for Romania and for Craiova. We are acquiring a plant with a skilled and enthusiastic workforce and together we will work to transform the plant into an industry benchmark for vehicle manufacturing in central Europe.”


In addition to the EUR57m to be paid to the government for their 72.4% stake in Automotive Craiova, Ford will transfer to a new company significant land parcels not required for production plans. The same offer will be made to all the minority shareholders.


Ford has also committed to spending another EUR675m to upgrade and modernise the plant. By 2012, the company expects to be spending around EUR1bn a year in Romania to support the Craiova operations.


Employment at the plant will almost double, from the existing 3,900 to 7,000.

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Ford’s purchase of the Craiova facility will be ratified by the Romanian government via a special law which will make its way through parliament in the “not-too-distant” future. When all the formalities are completed, Ford will become the new owner towards the end of the year.


Fleming said Ford would start with a small car built solely in Craiova and expected up to 90% of vehicle production to be exported.


The likely model is a replacement for the long-running Ka, launched in 1997, on a new platform developed jointly with Fiat and shared with the Italian automaker’s new 500.


Ford had said earlier that Craiova would be incorporated into its global organisation, adopt is lean production system and would be upgraded and modernised with a new, automated 1,000 tonne press line, a new body shop; modernised and expanded paint shop and new equipment in trim and final assembly.