US company Ford, the second largest automaker worldwide, will start negotiations for the takeover of South-Korean carmaker Daewoo, and should discussions be finalised, the American company might indirectly enter Romania through its takeover of Craiova plant.
On the other hand, analysing Ford’s last years’ moves, namely the close-down of several Central and Eastern European plants, a company official stated that the plant of Craiova might be closed down. “Though Ford will keep all its plants in South-Korea, the same thing might not happen with European ones,” he said.
A decision in this sense is likely to be announced during the following 60 days, a period during which the US carmaker must finalise the terms on the takeover of the South-Korean company.
Yet, Romanian car analyst Dan Vardie is upbeat with regard to the US company keeping the Craiova plant. “Ford does not have any operations in Central and Eastern Europe any longer and it is unlikely to close down or sell Daewoo divisions,” Vardie said. “Should Ford keep the plant in Craiova, the production of Daewoo brand will continue, while some Ford products might also start being assembled or manufactured,” he also said, adding that the US firm has demonstrated that it knows how to secure the accurate management of a brand.
Market sources say that Ford representatives have already visited the Romanian factory and their impressions were favourable. “The decision to continue the activity or to shut the factory down will be made following conclusions reached by the American company’s representatives, concerning the factory’s profitability,” the above-quoted sources say.
Daewoo restructuring committee, which is currently coordinating an international tender on behalf of the company’s creditors, yesterday appointed the American group as sole bidder for taking over Daewoo Motor. Ford, the second largest car producer worldwide, offered about 6.8 billion dollars for acquiring the debt-ridden South-Korean manufacturer.
According to the terms of the transaction, Ford will take over local Daewoo factories, including those of SsangYong producer, without nevertheless assuming their debt as well. The concern will also take over the production units outside the country, which will probably undergo complex restructuring, international press agencies say.
Daewoo currently holds 11 plants and 25 sales outlets outside the country, including manufacturing units in Romania, Poland, India or Uzbekistan. The South-Korean Group invested approximately 870 million lei in its Craiova-based plant and has other investments as well in Central and Eastern Europe, namely in Poland and Ukraine, accounting for 18.5% of auto sales (250,000 items) in this region in 1999. On the other hand, Ford, which holds 4.8% of the Central and Eastern European market, with almost 67,000 cars sold, closed down a series of plants in Poland and Belarus over the last period.