Ford Motor Company would spend EUR675m developing the former Daewoo manufacturing plant in Craiova, Romania, into one of the major facilities supporting its European vehicle and engine production requirements, the company said on Monday.
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Initially, Ford, GM and Renault were among major automakers expected to bid, along with Russian Machines, for the former Daewoo Automobile Craiova being sold off by state privatisation agency AVAS but Ford was, in the end, the only contender, submitting its bid on 5 July.
Romania is selling a 72.4% stake. It was to have been 95% but investment company SIF Oltenia has withdrawn from the sale, according to recent local reports.
Ford’s plans for the plant were discussed today at meetings in Bucharest with the automaker’s European president and CEO John Fleming, Romania prime minister Calin Popescu-Tariceanu and members of the privatisation committee for Automobile Craiova.
If successful, Ford would commit to investing EUR675m to upgrade and modernise the plant to its global standards and increase employment from 3,900 now to 7,000 – and potentially up to 9,000.
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By GlobalDataThe existing and additional workforce would be producing 300,000 vehicles a year, together with a further 300,000 engines annually, according to Ford’s plans. In 2006, the plant made 24,000 vehicles and 116,000 engines.
AVAS head Teodor Atanasiu was recently quoted as saying he envisaged the buyer would have to ensure a minimum yearly output of 300,000 vehicles.
“By 2012, we would expect to be spending around EUR1bn a year in Romania to support the Craiova plant,” added Fleming. “We are excited about the opportunity for Craiova. But there is still much hard work to be done before a final agreement is reached.
“During our negotiations with the privatisation committee, we will be emphasising how important the Craiova plant is to Ford’s long-term strategic manufacturing plans,” Fleming said.
The Romanian government bought back the troubled car maker from bankrupt Daewoo Motor in late 2006 for $US51m and paid another $10m for debts stemming from past loans secured by the Korean company.
