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Getting a foothold in Eastern Europe

Eastern Europe, as it embraces capitalism, offers tremendous opportunity. But it is still a confusing and complicated place to do business. With a staff of well-connected consultants, McGuireWoods Consulting is positioned to help multinational companies enter this untapped market. Representing the Ford Motor Company in Romania, McGuireWoods Consulting played an integral role in helping the auto giant to purchase Craiova, a vehicle manufacturing plant formerly run by the state.

A Sustained Effort
The discussions between the American company and the Romanian Government took more than two years. Negotiations were complicated by the fact that a Korean company owned a major stake in the plant. The factory also had significant debts, which Ford was unwilling to take on. With an understanding of how business gets done in Eastern Europe, McGuireWoods Consulting consultants stood by their client through hundreds of hours of negotiations.

In the end, the automaker paid 57 million Euros to the Romanian government to acquire a 72.4 percent stake in Automotive Craiova. The company anticipates spending 675 million Euros to upgrade and modernize the facility. The workforce at the plant will double, from 3,900 to 7,000. Starting in 2011, Ford will produce 300,000 cars per year there, exporting most of them to the European market. Craiova will be a cornerstone of Ford Europe's manufacturing base and key element in its plan to increase Ford sales in Europe.