Ford to invest 675 million euros in Romanian auto plant

The US automaker Ford has pledged to invest 675 million euros to upgrade a Romanian factory that once belonged to the South Korean group Daewoo, a Romanian privatisation official said Thursday.

"Ford has committed to building 300,000 vehicles and 300,000 motors per year according to a new design from 2011, and to invest 675 million euros (930 million dollars)," Mediafax news agency quoted privatisation commission member Mihai Voicu as saying.

He added that the US group would double the number of employees at the factory in Craiova, southern Romania, to between 7,000 and 9,000.

Ford was the sole bidder for the plant, and Romanian deputy finance minister Sebastian Vladescu said an envelope containing its offer had yet to be opened because it was "irrelevant at this stage of negotiations."

Two other groups, General Motors and JC Russian Machines, had expressed interest in the auto plant but declined to make formal offers.

In August 2006, Romania paid 60 million dollars (44 million euros) for a 51 percent holding in the facility that had belonged to Daewoo, which declared bankruptcy in 1999.

The South Korean company had paid 156 million dollars for a majority stake in the plant in 1994, and had invested another 850 million to modernise it.

Meanwhile, the French automaker Renault, which owns the Romanian car maker Dacia, is using the country as a base to build a successful low-cost car for emerging markets.

To the north, Slovakia has emerged as the eastern European centre of the auto sector, with Volkswagen, Peugeot and Kia among the major manufacturers investing in new factories.