The dam springs yet another leak! See below! Time to sell! (g)
Ford to build $1.3 bln car plant in Brazil
By Noriko Yamaguchi
SAO PAULO, June 16 (Reuters) - U.S. automaker Ford Motor Co. <F.N> said Wednesday it will build a $1.3 billion car plant in Brazil's northeastern Bahia state, nearly two months after it scrapped plans to build it in a leftist-ruled state in a dispute over subsidies.
The world's No. 2 carmaker said it will plow $780 million into the plant. It stated big autopart suppliers like Akron, Ohio-based Goodyear Tire & Rubber Co. <GT.N> and Germany's Siemens <SIEG.F> will invest the rest in the project, to be located in a new automotive park in the mostly agricultural state of Bahia.
Ford said Bahia, a conservative state which is home to influential Congress president Antonio Carlos Magalhaes, will also guarantee the financial support Ford needs and which it failed to clinch in Rio Grande do Sul, Brazil's southernmost state.
"We chose Bahia because it offered us the best infrastructure conditions and an unmatched backing for our project," Ivan Fonseca e Silva, president of Ford's local arm Ford do Brasil said in a statement.
Dearbon,Mich.-based Ford in late April jettisoned Rio Grande do Sul as its plant site after the state's left-wing Gov. Olivio Dutra, a former labor union leader, reneged on plans to contribute $260 million in fiscal incentives, including tax breaks and subsidized loans, for the plant.
Gov. Dutra -- a founding member of Brazil's preeminent leftist force, the Workers' Party -- said the subsidies pledged by his predecessor should be earmarked for small businessmen and farmers instead of going to Ford, which he called a rich multinational.
Ford's archrival General Motors Corp <GM.N> is in the midst of of building a major compact car plant in Rio Grande do Sul, one of Brazil's wealthiest and most industrialized states.
Bahia, known internationally as the center of Afro-Brazilian culture and one of Brazil's most lively coastal states, apparently made the sweetest offer among the seven states including mighty Sao Paulo and Rio de Janeiro that wooed the high-tech plant.
Bahia did not specify the incentives but said it has been negotiating with Ford on possible tax breaks since soon after talks with Rio Grande do Sul broke down.
Ford's new plant, which will start operation by the end of the year 2001, will churn out 250,000 cars a year and add 5,000 direct and 50,000 indirect jobs to Bahia, a relatively under-developed state whose main industry is production of sugar cane and fruit.
The only other salient industry in Bahia is petrochemicals, led by major chemical, transportation and construction conglomerate Odebrecht <ODBE3.SA>.
Ford's new giant plant will also be located in Odebrecht's home town of Camacari, close to Bahia's capital Salvador, and the state's industrial port Aratu.
The U.S. carmaker will be rolling into a territory where South Korea's Asia Motors planned to build a light vehicle plant, before it was bought by Hyundai Motor Co Ltd <05380.KS>.
The project has been frozen since late 1997, when Asia's financial crisis struck South Korea.
16:55 06-16-99 |
