Latest Automotive News

Subscribe in a reader





EU to examine if Romania undersold car plant to Ford

Email   small font medium font large font

Google
 
Web AutoNews24h.com

The European Commission said Wednesday it will examine if the Romanian government undersold a car plant to Ford Motor Co. last month and offered to write off the factory's debts in return for Ford's promise to keep on workers and turn out a specific number of vehicles.

If EU regulators find that Ford was planning to benefit from a debt write-off not offered to other potential bidders, they could stop that part of the sale from going ahead.

The EU executive has ordered Romania to halt any state subsidies to the plant at Craiova _ effectively freezing the sale _ until it finishes looking into how the government privatized the debt-laden factory that it took over last year after the previous owner, South Korea's Daewoo Motor Co., went bankrupt in 2000.

EU rules prevent governments from favouring one company over rivals by showering it with public money.

The EU said it would look carefully at how Romania had funded the privatization and sale of the plant this year, especially how it extracted promises from the only bidder for the plant, U.S-based Ford, that may have seen Romania agree to write off the factory's debts.

The Dearborn, Michigan-based car maker agreed last month to pay 57 million euros ($77.9 million) for a 72.4 per cent stake in the state-owned Automobile Craiova and has vowed to invest another 675 million euros ($923 million) to upgrade and expand car production there.

Regulators said they would have to check whether conditions that the Romanian government attached to the sale _ making at least 200,000 cars within the first four years of privatization and keeping on all 3,900 workers _ had lowered the price.

``If this is the case, the privatization could involve elements of state aid,'' it said.

They also want to check reports that Romania had promised Ford the government would write off or guarantee Daewoo's debts in the country and did not make similar commitments to other companies interested in buying the plant.

General Motors and JC Russian had signalled interest in bidding for Craiova earlier this year as Romania's low-wage workers and membership of the European Union make it an attractive location for making cars.

The plant is currently not manufacturing cars and now only sells spare parts.

Receive the latest automotive news by email!

Enter your email address:


Related news
BUCHAREST, Romania (AP) _ Ford Motor Co. will pay US$77.9 million for a 72 per cent stake in the state-owned Romanian assembly plant Automobile Craiova, a Finance Ministry official said Friday. Ford of ...
Hyundai Motor Co., the world's sixth-largest automaker, said Friday it is in talks with the Uzbekistan government to buy state-owned UZ-Daewoo Motors, formerly owned by South Korea's now-defunct Daewoo Group. ...
uropean Union regulators on Tuesday extended a probe into 96 million euros ($140 million) that France plans to grant PSA Peugeot-Citroen SA to develop a hybrid diesel car. The European Commission wants to ...
Volkswagen AG said Friday that up to 3,000 workers would be able to produce the latest Audi model at its Belgian plant as of 2009, partly compensating for thousands of Belgian job cuts ...
Ford Motor Co. (NYSE:F) could name Indian automaker Tata Motors Ltd. a ``preferred bidder'' for its Jaguar and Land Rover units as early as Friday, two people briefed on the negotiations said Wednesday. Talks ...
New modern plant will start production in Q4 2009 ...
TOKYO (AP) _ Suzuki Motor Corp. said Friday it will build a car assembly plant near St. Petersburg, Russia's second-largest city. The automaker will invest 14 billion yen (US$115.7 million; for the ...
Huge customer interest for the fourth Porsche model series. Stuttgart/Leipzig. Today, just three months after the new Panamera went on sale the 10,000th car rolled off ...
Nissan Motor Co., Ltd., today announced that it will source an innovative all-new compact car from its Sunderland plant in the United Kingdom (UK), starting in 2010. Building on the success of ...

Best Investment Newsletter

- 46% in 2008

- invest in the best performing US stocks only and sell them when the uptrend is over

- very easy to follow, simple buy/sell signals

- no need to have investing or trading experience

Find More Now!


EU to examine if Romania undersold car plant to Ford
> © 2006-2017 AutoNews24h.com except where otherwise noted