Ford asks for review of Automobile Craiova privatization contract clauses

Carmaker Ford, which has bought a 72.4 percent stake in local factory Automobile Craiova, is now asking for the review of certain clauses in the privatization contract. The Authority for State Assets Recovery (AVAS) has already created a commission in charge of negotiating with Ford, according to Mediafax newswire. The deal, which was analysed by the European Commission, was sealed at a lower price than what the Romanian state could have received, but Ford has pledged for a certain level of production and workforce occupancy, according to the EC. The commission saw the state aid, some EUR 27.5 million, was illegally offered to Ford and has asked the Romanian government to recover this amount. After that, the EC has approved a EUR 143 million state aid for an investment project in Craiova and EUR 57 million for professional training for Ford's employees. The complex deal and the changes made afterwards have triggered Ford's call for a review in the contract, according to AVAS. According to the privatization contract, Ford is supposed to reach a production of 250,000 units at the Craiova factory within a year and a half. Otherwise, it should pay damages of 25 percent of the acquisition value to the Romanian state. Ford bough the control package in the Craiova factory in September 2007 for EUR 57 million.