Romanian Agency Dialogues with Ford for Sale of Former Daewoo Car Factory

Officials said last Friday that Romania's privatization agency will begin its dialogue with Ford Motor Co., the only bidder in the sale of a former Daewoo car factory in southern Romania.

At an event in Bucharest, Ford's bid was opened but no details of the offer were revealed.

Sebastian Vladescu, who is the deputy Finance, and Economy Minister and head of the privatization committee in charge of the sale, said that it looks like all the documents requested have been submitted at a glance. He added that talks were to begin on Monday with Ford to negotiate on the terms of the sale.

As the only bidder in the sales, Ford confirmed in a press release that it wants to buy the plant. According to John Fleming, Ford of Europe President and CEO, their company offers the best combination of financial, technological and environmental commitments to be able to modernize the Craiova-based plant.

Maker of quality Ford catalytic converter, Ford adheres to the fact that the facility in Craiova is a strategically significant site for the future growth of the company. Ford of Europe produced 1.86 million units at its seven assembly plants in 2006 and additional manufacturing space is required to meet its emulous new product as well as growth plans.

Fleming also said that if they would be successful in their bid, they would expect to expand and improve the Craiova manufacturing operations, augment employment opportunities and attract additional suppliers to the area.

Other two companies - General Motors Corp. and JC Russian - which sent letters of intent to participate in the sale have not submitted bids.

The government has said that price would not be the only factor considered in the sale. It would also consider the ability of the buyers to maximize production and use Romanian-based suppliers.

The privatization agency, which is selling the government's 72 percent stake in the company, will sign a memorandum with several smaller shareholders in order to sell their stakes as well, thus allowing the buyer to take over 95 percent of the stock.

The factory, which was owned by the insolvent Korean company, has nearly 4,000 employees and can produce a maximum of 200,000 cars and 300,000 engines every year.

Last year, Romania paid US$60 million (€44 million) to purchase back a 51-percent stake in the company from Daewoo's creditors.

Ford Motor Company is a global automotive industry leader based in Dearborn, Mich. It manufactures and distributes automobiles in 200 markets in six continents. With nearly 300,000 employees and 108 plants worldwide, the company’s core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Ford Motor Credit Company is one of its automotive-related services.