Ford, Romania Amend Plant Privatization Pact

VIENNA – Ford and the Romanian state agency AVAS sign an amendment to the share-purchase agreement reached earlier covering the Ford Romania car plant in Craiova.

Ford finalized the takeover of the former Daewoo facility in March 2008. However, the auto maker failed to meet terms of the deal when it postponed launch of car and engine production due to the global economic crisis.

As a result, the Romanian government wanted to reduce state support for the plant. The new amendment cuts investment aid to €75 million ($100 million) from the original €143 million ($190 million). Ford also will pay a penalty of €14.25 million ($18.9 million).

“Ford is pleased that the negotiations with the Romanian government have concluded successfully and that the amendment to the share-purchase agreement is now signed,” the company says in a statement.

Ford will invest a total of €869 million ($1.2 billion) in the plant until it reaches full capacity. In previous statements, the auto maker mentioned plans to spend €675 million ($896 million).

Romanian media reports indicate Ford is committed to building at least 810,000 cars and 1.5 million engines in Craiova during the 2013-2017 period.

Ford will launch volume production of its new 1.0L 3-cyl. EcoBoost gasoline engine in April, while serial output of the new Ford B-Max multipurpose vehicle is to start in June, Ford Romania President Jan Gijsen tells local media.

Plans are to produce 60,000 cars this year and 105,000 units in 2013, Gijsen is quoted as saying. A second vehicle will be added at the Craiova facility in the future.

The auto maker, which employs about 3,500 people in Craiova, has decided to recruit another 500 workers.