A negotiation commission has been set up in view of sealing an appendix to the privatization contract sealed by the Romanian privatization agency AVAS and Ford Motor Company on September 12, 2007.
“At present, the commission is negotiating with Ford Motor Company the provisions of the annex which regard, among others, the extension of the implementation period for the two investment projects in Craiova, the regional state aid and the aid for professional training for Ford approved through a European Commission Decision, penalties for Ford if certain obligations provided for in the buy-sell contract are not met,” said Finance Ministry officials.
They say negotiations are in an advanced stage, and that the legal framework will become available soon. Rumors that Romania might freeze the state aid promised to the U.S. company emerged mid-August. At the time, Ford Romania officials did not comment on the subject, but Wolfgang Schneider, vice-president of Ford Europe said the Romanian government had told the company it would cut its state aid.
Ford was supposed to initially receive EUR200 million in state aid, EUR143 million of which for the investment and EUR57 million to train employees. By the end of last year, Ford was supposed to receive EUR65 million in state aid, according to the initial plan, but only received EUR17.6 million because it was behind on its schedule.
Apart from the state aid being cut, the American manufacturer risks being slapped a fine of over EUR14 million, stipulated in the privatization contract for failure to meet output commitments. Ford had undertaken to manufacture 250,000 units in 2011.
Ford has manufactured almost 7,600 utility vehicles in Craiova this year, and the plant’s output is still below 10,000 units per year, which is a pace to be expected from a luxury car manufacturer, not one that sells high volumes.
(English version by Daniela Stoican)