VIENNA –will start volume production of its new B-Max multipurpose vehicle and 1.0L 3-cyl. EcoBoost engine at its plant in Craiova, Romania, next spring.
The move comes some four years afterfinalized the takeover of the former Daewoo factory, which so far has assembled only small volumes of Ford Transit Connects from kits sourced from Turkey.
According to the original privatization contract signed with the Romanian government, production of a second, all-new vehicle was supposed to begin in 2010, but Ford postponed the project due to the economic crisis.
“It is correct that there has been a delay in our plans for this plant,” Wolfgang G. Schneider, Ford of Europe vice president-governmental, environmental and legal affairs, tells WardsAuto. “In the crisis, we put back our plans somewhat, but otherwise they have not changed. We still find Romania a strategically correct decision.”
Ford reconfirmed its commitment to invest more than E675 million ($903 million) in the Craiova operation this summer.
“In Craiova, we will have a so-called mega-plant in which we will produce both engines and vehicles at a capacity of about 300,000 units each,” Schneider says.
“We will produce the B-Max there and a second model, most likely a small car, will be assigned to Craiova later on, in 2015,” Schneider says. “The respective decision-making processes are still under way.”
With the second model, car production capacity in Craiova will amount to about 300,000 units a year. Engine capacity already will be reaching 300,000 units in the coming year.
The new small EcoBoost engine displayed at the Frankfurt auto show last month also will be produced at Ford’s plant in Cologne, Germany.
Transit Connect assembly will be phased out at about the same time production of the B-Max and EcoBoost engine gets under way.
Several suppliers will join Ford in Romania.
“We naturally want to encourage our suppliers to set up shop in Romania, not only to serve our plant in Craiova but also to make parts for export purposes in a very interesting cost environment,” Schneider says.
There is a supplier park in Craiova and some of the suppliers are located inside the plant itself. In addition, there are suppliers considering whether to set up operations between Craiova and the Pitesti region, where’s Automobile Dacia plant is located.
As part of the privatization contract, Ford had to agree to take over the entire workforce when it acquired the Craiova factory in March 2008. Due to the postponement of the main production project, the workforce has been underutilized.
“We have kept the number of workers at a constant level, but we have also prepared them for the new production tasks,” Schneider says. “So in this respect, it has not been lost time.”
Ford Romania has about 3,500 workers, which is sufficient for B-Max and engine production.
“When it is time to start production of the second vehicle, around 2015, we will raise the number of employees to about 5,000, maybe even to 6,000,” Schneider says.
Because Ford was not able to fulfill the terms of its deal with the Romanian government on schedule, there is talk of reducing state support, with negotiations continuing between the two parties.
“Things have not been totally settled yet, but we are very close to a solution,” Schneider says. “We understand the disappointment that there had to be this delay.”
Originally, Romania was to supply E143 million ($191 million) in investment aid and E53 million ($71 million) in training aid.
“At the moment, we are talking about how the fact that we are too late impinges on this package,” Schneider explains. “Naturally, this circumstance will significantly reduce the amount of state aid, and we understand why.”
“I am optimistic we will get this settled this year still,” he adds.