Romania Halves Aid to Ford after Production Plans Falter

Government says action taken after automaker reduces manufacturing commitment.

The Romanian government announced Tuesday it would halve its aid to U.S. automaker Ford after plans to manufacture locally 250,000 vehicles per year failed.

Romania had pledged in 2009 to grant Ford 143 million euros (US$187 million) in state aid.

The car maker promised in exchange to manufacture 250,000 vehicles per year until 2011 and 300,000 per year onward in its Romanian plant of Craiova.

But in 2010 it admitted it was running behind with its plans.

"Ford now plans to manufacture 810,000 vehicles and 1.5 million engines between January 1st, 2013 and December 31st, 2017," the government said.

"Following the car maker's revised commitments ... the Romanian state aid will amount to 75 million euros," it added.

"Ford's new figures point to a significantly lower manufacturing capacity," the government's spokesman Dan Suciu told AFP.

But he stressed that the automaker still planned to invest a total of $1.1 billion in Romania through the end of 2012.

The car maker bought the Craiova plant, a former Daewoo facility, in 2008 for $74 million.

But its plans to turn it into a globally competitive manufacturing facility by injecting $850 million were hurt by the economic crisis.

Ford started production in 2009 and a year later barely manufactured 9,550 units.

In 2012, the company plans to produce 60,000 B-Max vehicles.

Copyright Agence France-Presse, 2012

See Also:

Ford U.S. Sales up 14%; Focus Continues to Surge

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