It is vying with General Motors to take control of the plant, which is owned by the Romanian government and has capacity to make 150,000 cars and 300,000 engines a year.
Automotive analysts say the contest underlines the eagerness of the two manufacturers — both of which are making heavy losses — to boost low-cost production in the former Soviet bloc, and presents a possible threat to existing car plants in western Europe.
The plant, in Craiova, southern Romania, was set up as a joint venture between the Korean conglomerate and the Romanian government. Daewoo collapsed in 2000.
After a long period of negotiations with creditors, the government paid $60m (£32m) to take complete ownership of the plant. It still produces obsolete Daewoo models.
GM took control of the Daewoo car business in 2001 but not most of its widespread overseas subsidiaries.
Advertisement
Eastern Europe is rapidly becoming a favoured production base for big car companies. The Korean groups Hyundai and Kia are setting up European plants, respectively in the Czech Republic and Slovakia.
Yong-Hwan Kim, Kia’s chief of international business, told The Sunday Times that its labour cost in Slovakia was one-fifth of that in Korea.
Ford has only a plant in Russia. John Fleming, president and chief executive of Ford of Europe, said last week it was keen to have another in the region and the Daewoo factory would enable a quick start-up.
The government in Bucharest is expected to choose between the American companies’ bids early in the new year.
Meanwhile, Alan Mulally, the Boeing veteran who was appointed chief executive of Ford last week, faces a big test this week with the presentation of a restructuring plan to the company’s board of directors. The plan is a revision of the “Way Ahead” blueprint unveiled by chairman Bill Ford Jr in January.
Advertisement
It is likely to include an acceleration of plant closures and job cuts in North America, but it is not clear whether it will include a decision on Jaguar and Land Rover, two of Ford’s UK subsidiaries. Aston Martin is already being considered for sale.