Ford to invest $930 mn in Romanian car factory
Ford Motor Co is to spend euro675 million ($930 million) on developing a former Daewoo car factory in Romania into a major facility for its vehicle and engine production requirements.
By Agencies |
BUCHAREST: Ford Motor Co is to spend euro675 million ($930 million) on developing a former Daewoo car factory in Romania into a major facility for its vehicle and engine production requirements, the company said on Monday.
Ford is the only bidder for the Craiova-based plant, which is being sold by the government. The Dearborn, Michigan-based company has pledged in its offer to buy the factory to increase production from about 24,000 cars and 116,000 engines last year to 300,000 cars and 300,000 engines, according to a company statement sent to media. The number of employees would also increase from 3,900 to between 7,000 and 9,000.
"We are excited about the opportunity for Craiova. But there is still much hard work to be done before a final agreement is reached," Ford of Europe President and CEO John Fleming said in the statement. Ford's investments to upgrade and modernize the site would reach 1 billion euros ($1.37 billion) by 2012, he added.
"During our negotiations with the privatization committee, we will be emphasizing how important the Craiova plant is to Fords long-term strategic manufacturing plans," said Fleming, who met Monday with Romanian Prime Minister Calin Popescu Tariceanu to discuss details of the deal.
"By privatizing the Craiova company we want to create a second area for automotive production in Romania," said Tariceanu. Renault bought another large factory in Pitesti in 1998, which is now producing the popular low cost sedan Dacia Logan.
Romania paid $60 million (euro44 million) last year to buy back a 51-per cent stake in the company from Daewoo's creditors.
Ford of Europe produced 1.86 million units at seven assembly plants in 2006 and additional manufacturing space is needed to meet its ambitious new product and growth plans.
Ford is the only bidder for the Craiova-based plant, which is being sold by the government. The Dearborn, Michigan-based company has pledged in its offer to buy the factory to increase production from about 24,000 cars and 116,000 engines last year to 300,000 cars and 300,000 engines, according to a company statement sent to media. The number of employees would also increase from 3,900 to between 7,000 and 9,000.
"We are excited about the opportunity for Craiova. But there is still much hard work to be done before a final agreement is reached," Ford of Europe President and CEO John Fleming said in the statement. Ford's investments to upgrade and modernize the site would reach 1 billion euros ($1.37 billion) by 2012, he added.
"During our negotiations with the privatization committee, we will be emphasizing how important the Craiova plant is to Fords long-term strategic manufacturing plans," said Fleming, who met Monday with Romanian Prime Minister Calin Popescu Tariceanu to discuss details of the deal.
"By privatizing the Craiova company we want to create a second area for automotive production in Romania," said Tariceanu. Renault bought another large factory in Pitesti in 1998, which is now producing the popular low cost sedan Dacia Logan.
Romania paid $60 million (euro44 million) last year to buy back a 51-per cent stake in the company from Daewoo's creditors.
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Ford of Europe produced 1.86 million units at seven assembly plants in 2006 and additional manufacturing space is needed to meet its ambitious new product and growth plans.
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