Fiat annex "postponed indefinitely"

Belgrade daily Danas writes that Italian carmaker Fiat is once against postponing its move into the Zastava factory in Kragujevac. Despite announcements that the annex to the contract between Fiat and the Serbian government for forming a joint company would be signed on Tuesday, the document will not verified, since the Italians have still not given their business plan for the new company, according to the daily’s sources. Fiat annex "postponed indefinitely" “We really do not know what is going on anymore,” Zastava administration told Danas. The Economy Ministry said that the annex is ready, but that the Italian side must wrap up “some other, final formalities” in order to begin work. Sources from the ministry stated that Fiat must finish up its business plan, which will, among other things, state how many cars will be produced yearly in the Kragujevac, central Serbia-based plant, which class they will be and on what foreign markets they will be sold. “The annex to the contract with Fiat will be signed in the coming weeks. There are no complications or problems in the business arrangement with the Italians,” sources from the ministry said. They stated that Fiat will "soon pay the first EUR 100mn" of planned investments. The sources also said that in the coming year, "there would be new equipment installed, new factories built", while the production of the first new model in the Kragujevac factory is being prepared, which is expected to start in 2011. Meanwhile, Zastava's management and unions are in the dark over the reasons of the latest delay. Representatives of the unions say they only learned over the weekend that the signing would be postponed indefinitely. But they believe that rather than the missing business plan, the real reason for the postponement is that the Italians "either do not have or do not want to pay" the EUR 100mn of the founding capital for the company. Kragujevac city officials were also unpleasantly surprised, since they had to cancel a previously planned trip to New York in order to be present at the signing ceremony that was not to be. “We were also told that the signing of the contract with Fiat was moved because of business plans for the new company, but money is likely the problem. I do not believe that the new postponement of the signing of the annex to the contract will jeopardize the deal with the Italians, but it is certain it will cause some damage, marketing-wise, a Kragujevac city official told the newspaper. A memorandum of understanding between the city of Kragujevac and Fiat was signed in early May of 2008. "By mid-December" Kragujevac Mayor Veroljub Stevanovic reacted today by saying that the annex should be signed by mid-December. He went on to say that this will "certainly happen", but that there are "still some contentious details". "Everything is ready, but some business plan details are contentious," Beta news agency quoted Stevanovic as saying. He added that he did not wish to specify a date for this to happened, "in order to avoid making another mistake". Stevanovic explained that the timeframe would be discussed with Economy Minister Mladjan Dinkic.

Fiat annex "postponed indefinitely"

“We really do not know what is going on anymore,” Zastava administration told Danas.

The Economy Ministry said that the annex is ready, but that the Italian side must wrap up “some other, final formalities” in order to begin work.

Sources from the ministry stated that Fiat must finish up its business plan, which will, among other things, state how many cars will be produced yearly in the Kragujevac, central Serbia-based plant, which class they will be and on what foreign markets they will be sold.

“The annex to the contract with Fiat will be signed in the coming weeks. There are no complications or problems in the business arrangement with the Italians,” sources from the ministry said.

They stated that Fiat will "soon pay the first EUR 100mn" of planned investments.

The sources also said that in the coming year, "there would be new equipment installed, new factories built", while the production of the first new model in the Kragujevac factory is being prepared, which is expected to start in 2011.

Meanwhile, Zastava's management and unions are in the dark over the reasons of the latest delay. Representatives of the unions say they only learned over the weekend that the signing would be postponed indefinitely.

But they believe that rather than the missing business plan, the real reason for the postponement is that the Italians "either do not have or do not want to pay" the EUR 100mn of the founding capital for the company.

Kragujevac city officials were also unpleasantly surprised, since they had to cancel a previously planned trip to New York in order to be present at the signing ceremony that was not to be.

“We were also told that the signing of the contract with Fiat was moved because of business plans for the new company, but money is likely the problem. I do not believe that the new postponement of the signing of the annex to the contract will jeopardize the deal with the Italians, but it is certain it will cause some damage, marketing-wise, a Kragujevac city official told the newspaper.

A memorandum of understanding between the city of Kragujevac and Fiat was signed in early May of 2008.

"By mid-December"

Kragujevac Mayor Veroljub Stevanović reacted today by saying that the annex should be signed by mid-December.

He went on to say that this will "certainly happen", but that there are "still some contentious details".

"Everything is ready, but some business plan details are contentious," Beta news agency quoted Stevanović as saying.

He added that he did not wish to specify a date for this to happened, "in order to avoid making another mistake".

Stevanović explained that the timeframe would be discussed with Economy Minister Mlađan Dinkić.