Factory "Zastava automobiles" from Kragujevac lacks 15m EUR required for commencement of production of Serbian "Punto", new meeting with management of "Fiat" schedulled for September 4 and 5

The Head of the Independent Trade Union of Factory "Zastava automobili", Zoran Mihajlović, estimated that the realization of the contract with "Fiat" on assembling of "Punto", i.e. "Zastava 10" in Kragujevac was not going well, because the factory must procure technological equipment from its own sources, although it counted on the financial aid from the State.

The equipment that "Zastava" bought from Italian company "Komau", from the money it earned through privatization of its parts, should arrive by the end of the year. The equipment includes five automatic and one robotized line for assembling of bodies and welding of parts for "Zastava 10".

(State's aid still more than necessary)

- If the assembling of "Zastava 10" does not start in "Zastava" at the beginning of year 2007, the factory will probably be closed - Mihajlović estimated, pointing out that "Zastava" can not realize "Punto project" by itself and that it needs aid of about 15m EUR.

On that occasion, the management of Group "Zastava vozila" spoke yesterday (August 24, 2006) with the reprsentatives of the Ministry of Economy about the possibilities of enlargement of financial support of the Government of Serbia to production of automobiles and trucks in "Zastava", especially about the investment of about 14.5m EUR in the modernization of equipment and units of "Automobile Factory" before the commencement of production of domestic "Punto".

"Zastava" says that the Ministry of Economy sent official announcements few days ago that this-year subventions for production of automobiles will be increased, but the exact amount is not known yet.

By the way, the official negotiations between the representatives of the Government of Serbia and "Zastave" on one side and the management of "Fiat", on the other side, about production of new "Fiat" model in Kragujevac should be held on September 4 and 5 in Bursa (Turkey), where "Fiat" already had the new factory built.

Serbian delegation for these negotiations should be led by the Minister of Economy, Predrag Bubalo, and general manager of Group "Zastava vozila" Zoran Radojević.