Ford starts production in Romania

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Ford Romania is launching its first car produced at the factory in Craiova (in 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 signing the privatization contract of Automobile Craiova, on September 12, 2007, at the International Car Show in Frankfurt, the American company Ford officially took over 72.4% of the company’s shares, on March 21, 2008.

The papers were signed by Sebastian Vladescu, head of the privatization commission and Lyle Watters, Ford chief-negotiator in Europe. In exchange for the shares, the Authority for State Asset Resolution (AVAS) got 57 million euros, according to the AVAS vice president Laszlo Gyerko.

After a capital increase worth 250 million euros in January 2009, Ford took over from SIF Oltenia 22% of the Automobile Craiova shares for 76.4 million lei in April. The American company continued to purchase shares of Automobile Craiova until it held 96.74% of the total stake.

In July 2009, Ford launched a public offer for the takeover of the last 3.26% of its social capital, in exchange for 10.9 million lei (2.6 million euros). The offer, valid between July 22 and August 11 was intermediated by the EFG Eurobank Securities.

Following the offer, Ford purchased only 0.34% of the Automobile Craiova shares, for 1.1 million lei, thus holding 97.07% in Automobile Craiova. The American company announced it was going to start operations so that Automobile Craiova should no longer be listed on the Stock Exchange.

The takeover offer was contested by one of the company’s minority shareholders, Adrian Andrici, but the National Securities Commission rejected the contestation.

Experts say that the Ford investment and the other businesses might help Romanian economy recover. „As Ford plans to export 90% of its output, I expect that Romania should be at least as profitable as Dacia, that has become Romania’s main exporter,” Mihai Ionescu, general secretary with the National Association of Exporters and Importers from Romania said.

„We’ll see if Ford will choose only to assemble new cars or truly produce cars, from the first screw to the final process. Only then we will count them as contribution to exports and GDP,” Ionescu said.

The Senate Chairman Mircea Geoana said at a meeting with the Ford officials that he expected 20% of Romania’s exports in 2010 to be covered by the American company.

Constantin Stroe, president of the Romanian Car Makers’ Association has said that the 11 supply companies which the Americans succeeded to draw in Craiova are proof of the fact that ford maintains its production plans, in spite of the crisis on the car market.

Stroe added that the main condition that the Ford business become a success in Romania is that the Government keep its promises and invest in infrastructure.

Otherwise, Ford might change its mind as regards the investment, as German company Mercedes did, which decided to invest 800 million euros in Hungary, because of Romania’s bad roads.

If we had the necessary infrastructure, would have had also Mercedes in Romania, not only Ford and Renault,’ Stroe pointed out.

Ford managers have met several times with the Government’s representatives, calling for the stepping up of the road modernization works. The project is undergoing an auction at present for the Craiova-Alexandria section, whereas section Alexandria-Bucharest, has already been recovered.

As regards South Motorway, the project will not be materialized for the time being because of scant funds.
Ford maintains the commitment for Craiova. The first Ford vehicle that will be manufactured in Craiova will get out of the factory’s gates early in September.

The begging of production will bring about changes not only in the factory but also in the community.
The rise in production will lead to the traffic rise to and from the factory and we would like to be sure that this will not affect our activity neither the lives of Craiova dwellers,’ said Dionisio Campos, general manager of Ford Romania.

In order to develop the investment in Craiova, Ford raised a 300-million-euro loan from the European Investments Bank, a long guaranteed by the Romanian state.

President of Ford Europe, John Fleming said that the Craiova-based plant might turn into one of the important bases of the American company in Europe. Ford aims to produce 300,000 cars in Craiova and 300,000 engines a year starting 2012, generating over 4 billion euros revenues.

Dionisio Campos invited Mircea Geoana (Social Democratic Party leader) in Craiova on September 8 to attend the release of the first Ford car produced in Romania.

Campos said that at present, the American company is interested more in the modernization the plant and the continuation of investments, than in providing concrete figures about the output.

We can assure you that the first car released in the Craiova-based plant will fully meet Ford’s quality standards. I will halt the production if the products isn’t of good quality,’ said Campos, stressing that Ford puts quality first.

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