ST. PETERSBURG - Ford is awaiting government investment incentives before it sets up a $150 million factory near St. Petersburg.
While Ford officials were careful to stress that nothing has been finalized, they said they hope to make a final announcement in the first half of 1998 that they will set up the plant.
The only remaining major question involves the availability of unspecified investment incentives from the federal government, said Len Meany, the associate director of Ford's department for new markets.
He said the factory would start producing 25,000 cars a year and when it is in full production would create some 2,000 jobs.
Although Ford officials declined to name the exact site, oblast officials have identified it as the diesel-engine factory Russky Diesel in Vsevolozhsk. The town is in the Leningrad Oblast, a region that surrounds, but does not include, St. Petersburg.
'We are very optimistic about the Leningrad Oblast as a place to do business,' Meany said.
In 1997, Ford sold about 7,000 cars in Russia.
'Russia is going to be a future growth market and we want to establish a presence there,' said Tom Hoyt, a Ford spokesman in Dearborn, Michigan. By the time the plant is built there will be sufficient demand for 25,000 cars a year.
'Henry Ford said we should build them where we sell them, so we want to build them in Russia. It is our hope and goal to move as quickly as possible,' Hoyt said.
But the proposed factory will initially assemble cars from imported kits, in the future Ford plans to use parts made in the region.
'This investment should have a domino effect for new investments in the region. When the factory begins to source parts locally, the supply industry will also grow,' said Hoyt.
Meany said that Ford looked at St. Petersburg itself as well as several undisclosed cities 'west of the Urals.'
