Ford Motor Co Asks Romanian Govt For 1 Yr Extension Of Automobile Craiova Contract - Sources

Ford representatives made the request during negotiations with Government for an annex to the 2007 privatization contract of Automobile Craiova.

People close to the matter told MEDIAFAX that the American carmaker called for extending the four-year contract by another year, citing the global recession. The same sources added the Government might grant the extension, given the current economic circumstances.

In September 2007, the Ford Motor Company purchased 72,4% of the shares in Automobile Craiova for EUR57 million. The American company's contract with the state stipulates that Ford must produce 250,000 units in Craiova in four years, while penalties for not meeting the production goal range from 5% to 25% of the contract's value. Since 2007, Ford has assembled approximately 400 vehicles in Craiova.

In early May, Ford representatives told MEDIAFAX that the company stands by the contract's initial provisions. However, Ford subsequently called for the reevaluation of certain contractual clauses, prompting Romania's Government to assemble a committee which will draw up an annex to the contract.

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