Ford Otosan Expanding Romania’s Automotive Industries

RAYMOND, Maine — Ford Otosan, an automobile manufacturing company based in Turkey that Ford Motor Company and Koç Holding owns, has announced plans to hire 600 new workers at the Craiova plant in Romania. The new plans support the government’s initiative to increase job availability and improve Romania’s automotive industry and economy on an individual and nationwide level.

Importance of Romania’s Automotive Industry

Romania’s automotive industry is a well-established industry that has existed for more than 80 years. The automotive industry contributes more than 14% of the country’s Gross Domestic Product (GDP). This figure means that Romania’s automotive industry earns Romania €30 billion annually.

Romania’s automotive industry is far-reaching in its impact on everyday life. There are multiple jobs and jobs sectors that the advancement and expansion of the industry have affected including those that revolve around the production of car parts, not only the production and assembling of the car as a whole.

There are mechanics, tire companies, oil industries and newly established businesses that allow for installing electric vehicles’ chargers as a business or marketing opportunity. If one aspect of Romania’s automotive industry fails, so do the others attached to it.

Automobiles are one of Romania’s top 10 exporting industries. With new factories and job opportunities, such as the 600 new jobs at the Ford Otosan factory, new jobs can help with Romania’s struggling job market.

Job Availability in Romania

According to the World Population Review, 23.8% of Romanian people live in poverty, with an unemployment rate of 5.4% in May 2022.

The unemployment rate fluctuated slightly after its last record high in 2002 at 8.11% but decreased in the following years. Unfortunately, despite its low in 2019 of 3.91%, it has risen again.

Eurostat recorded at least 46,656 open jobs in Romania as of March 2022. However, more impressively is the active increase in new job openings in Romania’s automotive industry. According to the database at GlobalDataJob, there was a 28.4% increase in hiring activity in the automotive industry. Still, the total number of jobs open in the industry is harder to track.

The latest count by the European Automobile Manufacturers’ Association counted 179,841 jobs directly connected to the Romanian automobile industry. Still, the total number of jobs must account for the supply chain that is a part of the industry.

However, as the Romanian government will use the new factory to create investments in battery or semiconductor production, the number of jobs tied to Romania’s automotive industry will increase.

Craiova is an ideal location to open a new factory, or, in this case, come into possession of a new factory, as it is the sixth-largest city in Romania and operates as a political center for the nation. The new factory could attract attention and bring a spotlight to the way the factory is creating jobs and decreasing local poverty. The spotlight could attract attention to the issue of poverty and unemployment rates while making new investments in jobs and the local economy.

The 600 new jobs might not seem like a large number. However, the chances of the jobs at the Ford Otostat factory getting filled are growing higher with each passing month. The new jobs in Romania’s automotive industry have an opportunity to increase local and national economic flow. This could mean the factory could help make a dent in the poverty rates that the Romanian government has been desperately battling,

Ford’s New Factory’s Promises for the Future

Ford Otosan has announced its plans to transition towards producing electric vehicles slowly. Part of the acquisition includes $504 million in investments for the Craiova plant. The investments are the appropriate funding for the staged transition as the company receives regulatory approvals.

Upon receiving the approvals, Ford Otosan’s Craiova plant can switch from its production of cars that run on oil to the newer electric vehicles the company aims to produce.

Güven Ozyurt, the general manager of Ford Otosan, stated, “With the Craiova plant acquisition, Ford Otosan is expanding its manufacturing experience and capabilities into international operations. Craiova will benefit from the skill base and knowledge transfer through Ford Otosan’s experience in designing, engineering and building commercial vehicles and electrification.”

Otosan Ford’s new factory focuses on electric vehicles for many reasons. Still, for consumers, they are typically cheaper in the long run. The electric cars that will be the factory’s focus are less of an economic burden to their owners for many reasons, but precisely because oil and gas prices have skyrocketed. Today’s incredibly high prices of gas and oil make electric cars more financially practical in day-to-day life.

With the innovation of Ford Otosan’s movements in Romania, the company could save countless individuals money by producing, exporting and selling electric vehicles. The investments in the factory could bring new jobs to the region and provide regional economic benefits by getting money back into the local economy.

— Clara Mulvihill
Photo: Flickr