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Ford Launches Production Line In Romania

Automaker launched production of its new model Transit Connect van in Romania on Tuesday, good news for struggling local automobile industry and Romania's economy.

BUCHAREST, Romania (AP) -- Ford Motor Co. launched the production of its new compact van at a factory in southern Romania on Tuesday -- a rare piece of good news for Romania's struggling automobile industry and its moribund economy.

The Transit Connect, a compact van, will sell for euro14,000 to euro15,600 ($20,000 to $22,000) in Romania and the United States. Ford said it had sold 600,000 so far worldwide.

Romania is mired in recession and needed a $17.1 billion bailout from the International Monetary Fund. Two years ago, Ford took over the country's state automaker.

Ford of Europe President John Fleming and U.S. Ambassador Mark H. Gitenstein attended the launch in the southern city of Craiova, as did Romanian President Traian Basescu.

"This past year has been one of unparalleled difficulty in the global economy ... and the automotive industry has borne the brunt of the downturn in consumer demand," Fleming said. "We still have some work to do before starting full volume production, but today signals the start of a new manufacturing era here in Craiova."

Fleming said "revenues, profitability and volumes" have declined in Europe but Ford had improved its market share to become Europe's second best-selling vehicle brand.

Ford plans to build 300,000 automobiles and 300,000 engines in Romania in the next four years, and said it will hire an extra 3,000 staff throughout the country. It currently employs about 4,000 people.

Basescu said the factory is now "part of the glorious history of Ford" and noted that euro12 million ($17.2 million) had been invested in training the work force.

"I want to thank the workers," the Romanian president said. "With your hands and minds, you have been reorganizing the workshop ... You have been loyal partners of the investors from the very beginning."

He and Fleming later inspected a white Transit Connect parked on a podium.

In 2007, Ford bought a 72.4 percent stake in the state-owned Automobile Craiova, paying $88 million and vowing to invest $1 billion to upgrade and expand car production.

Romania's government said in March it would invest euro143 million ($182 million) of state aid until 2012 to support production at the factory in Craiova.

"(The factory is) a strong vote of confidence in Romania's economic future," said Gitenstein, the U.S. ambassador.

In other automotive news, Prime Minister Emil Boc said he would meet with Patrick Pelata, Renault's chief operating officer, later Tuesday. Automaker Dacia Renault has requested euro170 million ($244 million) in government aid to support its factory in southern Romania.

Part of the money will be used to help develop a technical center. Renault SA has requested euro40 million ($57 million) in subsidies to help Dacia and Nissan in Romania with a planned investment of euro200 million ($287 million).

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