Ford in, GM out of Romanian plant bidding

Ford Motor took the lead in bidding to purchase a former Daewoo assembly plant from the Romanian government after rival General Motors abruptly dropped out.

A GM spokesman confirmed to Automotive News Europe that the US automaker will not submit a bid to purchase the former Daewoo plant in Craiova, by today's deadline.

Ford has submitted the sole bid for a majority stake in Romanian automaker Daewoo Automobile Craiova, state privatization agency AVAS said.

"AVAS received ... only one offer, from Ford Motor Co.," the agency said in a statement.

Besides GM, Russian automaker GAZ, Chinese automaker Chery and Tata Motors of India had previously expressed interest in the Craiova complex.

GM, which provides car kits and engine and transmission parts to Craiova through its GM Daewoo Automobiles and Technology subsidiary, had been considered a frontrunner.

A GM spokesman said the automaker intends to increase its manufacturing capacity in central and eastern Europe "with incremental growth." General Motors has financial equity or production deals with several assembly plants in central and eastern Europe, including Poland, Ukraine, Russia, Uzbekistan and Kazakhstan.

"Looking at all options around the region, we decided not to bid," said GM spokesman Marc Kempe.

One factor in the GM decision was the old debts held by factory.

"There was a question over the obligations that the new buyer would be expected to take on by the Romanian government," Kempe said.

AVAS said it will announce the bid on Friday afternoon local time.

The Romania government bought back the troubled automaker from its bankrupt owner Daewoo Motor in late 2006 for $51 million and paid another $10 million for debts stemming from past loans secured by the Korean company.

The head of AVAS, Teodor Atanasiu, has said he envisages the buyer will have to ensure a minimum yearly output of 300,000 vehicles.

Many auto parts makers have set up in the new European Union member recently, attracted by the rising output of Renault's Dacia plant, cheap labor and favorable tax rates.

In addition, Renault subsidiary Dacia's assembly plant in Pitesti, 60km east of Craiova, has been growing rapidly. Pitesti assembles the popular emerging-market Logan lower-medium car and produces kits for Logan assembly plants in other markets.