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Ford Commits to Making Romanian Plant 'Long-term Success'

Oct. 29, 2012
Ford had invested almost $1.0 billion in the Craiova  plant since it bought the site, a former Daweoo auto plant, in 2008. Employing 4,000 people, the plant is "the most integrated plant we have in Europe, it does every step of the automotive production process," Ford said. 

Days after announcing the closure of three plants in Britain and Belgium, Ford (IW 500/6) reaffirmed Monday a long-term commitment to develop its site in Craiova, southern Romania.

"We are determined to make Craiova a long-term success,” said Wolfgang Schneider, Ford Europe vice-president said during a visit to the site by Romanian Prime Minister Victor Ponta.

"Our strategy was to put the most sophisticated vehicle and the most sophisticated engine into Romania and the strategy has worked out."

Schneider said Ford had invested almost 800 million euros (US$1.0 billion) since it bought the site, a former South-Korean Daweoo auto plant, in 2008.

Employing 4,000 people, Craiova "is the most integrated plant we have in Europe, it does every step of the automotive production process," he stressed.

"It's like day and night compared to what it was like when we arrived."

The factory, which manufactures Ford's B-Max model, currently produces 500 vehicles a day, a pace the automaker intends to raise in the coming months.

But output depends on the market, "which is a little depressed at the moment," Schneider acknowledged, declining to give specific figures about next year's planned production.

When it bought the plant, Ford vowed to manufacture 250,000 vehicles per year until 2011 and 300,000 per year onward. But in 2010 it admitted it was running behind with its plans.

US ambassador to Romania Mark Gitenstein said the plant's capacity stood at 1,000 vehicles a day, similar to major plants in the US.

Gitenstein urged Romanian authorities to develop road and rail infrastructure around Craiova to facilitate delivery of the new cars to dealers in Romania and abroad.

A week after Ford sent a shockwave around Europe by announcing it would close down a key plant in Belgium and two more in Britain, Schneider said it was too early to talk about relocating production from the three sites to Romania.

"We are in the middle of consultation process with the unions and the works councils, the outcome is still open," he said.

The three plant closures, combined with previous plans to axe 500 jobs across Europe, bring the total number of positions being shed by Ford on the continent to 6,200, equivalent to 13% of its European workforce.

The company argued there was a manufacturing overcapacity in the region, stemming from a drop of more than 20% in total industry vehicle demand across Western Europe since 2007.

Romania was no exception to the rule, with new car sales dropping by 22% in the nine months from January through September compared with the same period a year earlier, to 53,582.

When the Romanian economy was booming in 2007, full-year auto sales in the country totaled 366,000 vehicles.

Although it has been hurt by the global crisis, Romanian auto production has fallen only slightly. Nearly 240,000 vehicles were produced in the first nine months of this year by Romania's two car plants, more than 90% of them by a French-owned Dacia-Renault site at Pitesti.

Around 98% of the total production, or 233,000 cars, has been exported.

Copyright Agence France-Presse, 2012

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