EC Investigation Puts On Hold New Ford Product On Romanian Mkt

The head of Romania’s’ privatization agency AVAS, Teodor Atanasiu, said that U.S. giant Ford would have to consider other locations to produce cars if the European Commission fails to give an answer by early 2008 regarding the privatization process of Romanian auto-assembly plant Automobile Craiova.

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Senate chairman Nicolae Vacaroiu recently said that the state aid in the privatization of Automobile Craiova is legal and the Romanian state did not favor the U.S. giant by granting any facilities.

However, the Commission is investigating whether writing off debts and imposing certain conditions on the privatization of Automobile Craiova qualify as state aid.

Atanasiu said, end October, that the results of the European Commission’s investigations are predictable, but procedures could take up to 18 months.

AVAS head cared to stress that the date for the first new product on the Romanian market is highly important for Ford.

Atanasiu also pointed out that Ford should find a new location if the Commission fails to give an answer early 2008.

"If Ford officials do not get an answer in due time, namely, early 2008, they will have to consider other locations to manufacture their first new product," Atanasiu concluded.

Ford signed in September 2007 the privatization contract to buy a 72.4% stake in Automobile Craiova for EUR57 million, and undertook to invest EUR675 million in upgrades.

The deal is set to be completed January 30, 2008.

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