EC investigation could impede Ford plans to produce new car in Romania

This September, the U.S. automotive giant agreed to buy 72.4 percent of the Craiova factory for €57 mln, following a buyback by the Romanian state of a 51 percent stake in the company from South Korean Daewoo carmaker for €43 mln.

However, the European Commission (EC) launched an investigation on possible state subventions granted to the Craiova car manufacturer in the privatization process, and has asked Romania to suspend any illegal subsidies until the investigation is finalized. Moreover, Romania allegedly changed the privatization terms during the process, which could mean more state subventions, according to the EC.

"It all depends on how long it takes. We are assisting the Romanian government by providing comprehensive responses to the questions of the Commission," Malcolm said.

Soon after the deal for Automobile Craiova was concluded with the Romanian government, Ford of Europe's General Manager, John Fleming, said the group was planning to start producing a new car model in Romania by the end of 2008.
Ford experts have already visited the Craiova factory, but have not yet taken control of it. "The investigation will delay the official takeover," Malcolm said.