Basescu: I am convinced Romania takes a step forward with Ford Craiova
‘I am convinced that the quality of management and the solidarity of the Romanian workers will allow Ford Romania to become a successful company,’ said Basescu.
The head of the state wanted to answer the politicians who, on electoral campaign, had some remarks targeting the Romanian workers and communicated them that they should make the best of the Romanian workers, „following the successful example of the other car maker in Romania.”
‘It is about a good partnership between management and workers. I wish you to have the same extraordinary partnership with the workers as the other car manufacturer has in Romania,’ Basescu told Ford representatives.
He assured the U.S. producer of the Romanian state’s full support in turning the investment into ” another success story of the Romanian automobile.”
Moreover, the head of state thanked the Tariceanu government for its flexibility in carrying out negotiations and its ability to meet the investor’s demands and needs, that eventually led to signing the contract.
„I am sure that Romania takes a step forward with Ford Romania, with Ford Craiova,” Basescu explained. Ford Romania launched on Tuesday its first car produced at the factory in Craiova (southern Romania), the Transit Connect commercial vehicle.
In 2010 a new model will be released, most probably B-Max, that replaces Fusion. In 2011 or 2012, Ford will start producing a medium-class commercial vehicle, that might be Transit, though company officials have not given any details.
After the contract on the privatisation of Automobile Craiova was signed at the Auto International Show in Frankfurt on Sept. 12, 2007, U.S. Company Ford formally took over a 72.4 percent stake in the Romanian factory on March 21, 2008, with the documents being signed by head of the privatisation commission Sebastian Vladescu and Ford Europe chief negotiator Lyle Watters.
The State Assets Realization Authority (AVAS) received 57 million euros for the 72.4 percent block of shares, AVAS vice president Laszlo Gyerko said.
After operating a capital increase worth 250 million euros in this January, Ford took over 22 percent of Automobile Craiova shares from financial investment company SIF Oltenia for 76.4 million lei in April.
The U.S. company kept on buying Automobile Craiova shares, thus raising its shareholding from 72.41 percent to 96.74 percent.
In this July, Ford launched a public offer for taking over the remaining 3.26 percent of the share capital for 10.9 million lei (2.6 million euros). The offer was conducted over July 22-Aug. 11 and was brokered by brokerage firm EFG Eurobank Securities.
Following this offer, Ford bought just 0.34 percent of Automobile Craiova stock for 1.1 million lei, thus increasing its stake to 97.07 percent. The U.S. company announced it would begin the moves so that Automobile Craiova be no longer listed on the stock exchange.
The take-over offer was challenged by one of the company’s minority shareholders, Adrian Andric i, but the National Securities Commission rejected the request to cancel the operation.
Specialists say the Ford investment and the connected business could prove a lifebelt for the Romanian economy.
‘Given that Ford has scheduled to ship 90 percent of its output to export, I expect Romania to stand to gain at least at the level of the investment at (carmaker) Dacia, that has become Romania’s main exporter’, said Mihai Ionescu, the secretary general of the Romanian National Exporters and Importers Association.
‘However, it remains to be seen whether Ford will choose to merely assemble vehicles here or to really produce cars, from the bolt to the end product. Only then will we be able to count them as making a contribution to the country’s exports’, Ionescu stressed.
Romanian Senate chairman Mircea Geoana had said at a meeting with Ford managers he was expecting 20 percent of the Romanian exports in 2010 to be covered by the American auto maker.
President of the Romanian Auto Makers Association Constantin Stroe said the 11 provider firms that the U.S. company has managed to attract to Craiova show Ford is maintaining its production plans in spite of the downturn seen by the motor market.
Stroe added that the main requirement for the Ford business to be a successful one for Romania is that the government keeps its promises and invests in infrastructure.
If not, Ford might change its mind as regards the investment, the same as happened with German auto maker Mercedes, which decided to invest 800 million euros in Hungary because of the poor roads in Romania.
Ford managers met the government officials several times to ask them to speed up the road upgrading works. The rehabilitation of National Road DN6 Craiova-Bucharest is one of the options. The project is currently at the phase of the tender for the Craiova-Alexandria stretch, with the Alexandria-Bucharest stretch having been already upgraded.
In order to develop the Craiova investment, Ford took a loan of 300 million euros from the European Investment Bank that was guaranteed by the Romanian state.
Ford of Europe president John Fleming said the Craiova plant could turn into one of the main production bases of the U.S. company in Europe. Starting 2012, Ford plans to build 300,000 automobiles in Craiova and 300,000 engines a year, a move that would bring more than 4 billion euros in revenues.
Ford of Romanian managing director Dionisio Campos stressed that the U.S. company is currently more interested in upgrading the factory and in continuing investment, rather than offering precise figures relating to the production volume.
What we can say and guarantee is that this first product to go out of the factory gate this year, in September, will fully meet the Ford quality standards, Campos said, adding he will stop the production if there is no quality, as Ford does not place quantity ahead of quality.