Ford Strategy For Romania Not Affected By Intl Crisis, EC Probe

Hans Juergen Fuchs, Ford Europe public relations and communication director, said that Ford Europe is slightly affected by the markets evolution and the international crisis, adding that it reported a $69 million profit in the third quarter.

However, the output of European plants will be slightly reduced by yearend, he added.

The European Commission launched last year a probe into Ford’s deal with Romanian state-owned auto assembly plant Automobile Craiova to see if any illegal state aid had been granted to Ford.

The Commission ordered the Romanian government to recover an illegal EUR27 million state aid from Automobile Craiova, accusing Romania of underselling Craiova to Ford, but allowed the sale to go through provided the state aid is paid back.

Fuchs said the EC probe does not affect the company’s plans for Craiova plant, adding the procedure was a common one in the case of significant state aids.

Ford pledged to invest EUR675 million to upgrade the Craiova plant.

In March, when closing the deal to buy a 72.4% stake in the Craiova plant, Ford Europe CEO John Fleming, stated the first Ford model to be manufactured in Romania will be the small cargo van Ford Transit Connect, by mid-2009.

Fleming also said Craiova will exclusively produce and export a new Ford model in 2010 and denied market rumors alleging it would be the new Ford Fiesta. He didn’t provide further details citing confidential terms.

Early September, Fleming announced the third Ford model produced at Craiova plant 2011-2012 will be a commercial vehicle with medium capacity.