Better late than never: Ford’s slowest plant has reached one million vehicles produced

Ford is quick to announce that it has reached one million vehicles produced in Romania. What is not said in the press release is that the factory in Craiova is far behind the production assumed before the Romanian Government and that it is a long chain of extension periods and pardons.
Bad start and postponements

The Government of Romania announced in 2016, in a press release, that it approved the extension, until December 31, 2025, of the period for the production of cars and engines undertaken by the company Ford Romania SA, given that, until the end of the year In 2019, Ford will make an additional investment of at least 130 million euros in Craiova, exclusively from its own sources and without the involvement of other elements such as state aid. Of this amount, 100 million euros will be used for the introduction of a new car model in Craiova and 30 million euros for the production of engines.
In this sense, the Executive amended GEO no. 109/2008, the legal framework through which a state aid of 75 million euros was granted to the company Ford Romania S.A. for the implementation and completion of investment projects in the car factory and the engine factory in Craiova, totaling 869 million euros.

We mention that Ford made, between 2008 and 2012, the investment assumed by GEO no. 109/2008, respectively of 869.09 million euros, having the obligation to maintain this investment until 31.12.2017. The state aid authorized by the European Commission was paid in full by the Romanian Ministry of Public Finance. Until 31.12.2017, the Romanian state would only monitor the maintenance of the investment and the fulfillment of the conditions associated with it, including the achievement by Ford of the assumed production of 810 thousand vehicles, respectively 1.5 million engines. In the situation where the company Ford Romania S.A. will not fulfill its obligations under this amendment within the said period, the State aid recovery mechanism will be applied, which will be paid by Ford in proportion to the degree of non-compliance.

State aid investigated by the European Commission
In 2007, Ford offered 57 million euros for 72.4% of Automobile Craiova shares. Immediately after signing the privatization contract - in September 2007, the European Commission (EC) launched an investigation into the granting of illegal State aid.
In February 2008, at the insistence of both sides, the EC asked the Romanian state to recover from 27.5 million euros in illegal state aid from Ford.
Ford officially took over Automobile Craiova in March 2008. The new shareholder started the modernization project in May 2008, and in the spring of 2009 it also acquired a 22% stake in Automobile Craiva owned by SIF Oltenia.

Phantasmagoric production commitments
Ford has pledged to produce at least 200,000 cars in the fourth year after privatization, make a total investment of about 800 million euros and keep all employees.
In January 2010, Ford made a loan of 400 million euros from the European Investment Bank, 80% guaranteed by the Romanian state. The loan will be used to co-finance a project to develop a low-carbon engine and subsequent production at the Craiova plant.
The production of cars at the Ford Plant in Craiova started on September 8, 2009, but at a very low rate, with about 10 cars per day, producing by the end of 2009 about 1,000 units.
According to Ford Romania's commitments, in 2013 the production capacities needed to manufacture 350,000 units per year were to be installed at the Craiova plant. This production volume has never been reached.
Ford reached this production mark of 1 million units at the age of 12 after manufacturing its first vehicle in Romania, in 2009. Before starting the production of Puma in 2019, the Transit Connect models, the innovator, were assembled at the factory in Craiova. B-Max, as well as the EcoSport model which is still produced here with Puma. Ford promises to produce a range of light commercial vehicles in Craiova from 2024, this range will also include an electric version.

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