Cross Lander and state sue each other as vehicle plant rusts
US vehicle manufacturer and owner of the Aro plant in Campulung, Cross Lander, has announced legal action against the Romanian Government at the same moment it was due to produce evidence of investment in the former state 4X4 vehicle factory.
“It’s a surprising coincidence,” said president of AVAS Razvan Orasanu.
Cross Lander had an obligation by the end of March 2006 to produce evidence of second year investments in the Arges County factory, which still employs 1,050 people.
“There is no abundant evidence of that investment being made,” added Orasanu. “We would be willing to receive documentary evidence, but it should have already happened.”
The plant is now not performing to the best of its ability.
“Production now stands at under five per cent of the normal capacity, and all that is produced is spare parts,” said union leader of Aro Campulung, Gheorghe Apostu.
Cross-Lander claimed AVAS failed to carry out its obligation to cancel debts in the region of 40 million Euro. Officials from the American company claim they have received attacks from Government authorities and “sensationalist” reporters who have combined to discredit the company and “wrestle away” its control of the Aro factory.
“Cross Lander has no right to complain that somebody is trying to wrestle away the control of the plant from them,” added Apostu. “If they wanted to produced here they had all means to do so. They did not respect the very few conditions the privatisation contract put forward, a contract which, by the way, was extremely bad for the Romanian state.”
Apostu blamed local and senior Government figures from the past as responsible for the contract.
“When the contract was signed they told us we would capture the American car market,” he said. “But nothing was ever done.”
The union leader added that Cross Lander has not paid full wages since November 2005. “Every once in a while people get about one million ROL [30 Euro] from sales of old cars and spare parts,” he said.
The current staff are looking for new jobs. 50 people have so far found new jobs. But the average age of workers at the plant is 40 and Campulung, a town of 30,000 inhabitants, is hit by chronic unemployment.
In this city, in 1989, the 4X4 plant employed 12,000.
Cross Lander claimed it will file a dispute against the Romanian state after coming to the conclusion it had “no viable alternative” left to protect its interests in the investment made in the factory, according to a press release.
But AVAS had received nothing official as we went to press. Cross-Lander has threatened AVAS with legal action through press communiques in the past, but has not carried out any such action.
“We do not discuss with people we have contracts with through press releases,” Orasanu told The Diplomat. “It is not the wisest communication method between two entities who have entered into a contract in the long term.”
AVAS is also suing Cross-Lander for breaches of contract, including the American firm’s selling of the factory’s tools and mold facility, which is still in the courts.
“There are such great opportunities in Romania but, in our opinion, their Government is not ready for the world of business as we know it in America,” said John A Perez, CEO of Cross Lander, which has now changed its name to Global Vehicles USA Inc.
“Nobody from Cross Lander has been present in Campulung since September last year,” claimed Apostu.
The union leader has written to President Basescu on many occasions, but has had no reply.
“He is always visiting places where stones drop or bridges collapse,” he said. “But he has taken no measures to help us.”