Ford requests review of Automobile Craiova privatization contract

Ford Romania, which controls a 72.4 percent stake in carmaker Automobile Craiova, has asked the Authority for the Recovery of State Assets (AVAS) to revise a series of terms included in the privatization contract inked in 2007. The AVAS has already created a commission in charge of negotiating with the company.

Ford paid Romania EUR 57 million for its stake in the Craiova-based plant. The European Commission (EC) investigated the deal and subsequently concluded Romania had accepted a lower price for the plant in exchange for Ford’s pledge to produce over 250,000 cars in Craiova by 2011 and to create additional jobs. Romania was found to have granted Ford illegal state aid worth EUR 27.56 million and the EC asked the Romanian authorities to recover the difference from the carmaker.

Later, the commission approved state aid worth EUR 143 million for a project Ford plans to develop in Craiova, as well as EUR 57 million in aid for staff training at the Romanian plant.

The complex deal and the changes made afterwards prompted Ford’s call for a review of the contract, according to AVAS.

In April, Ford Romania started production of the Transit Connect model at its Craiova plant. Before that, the carmaker had assembled only 400 Transit Connect compact panel vans using parts shipped from its Turkish plant.

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The automaker is slated to start production of the B-Max small-class model in Craiova later this year.

Staff