Ford España under EC investigation for proposed public financing

Brussels 16-5-2013 — /europawire.eu/ —  The European Commission has opened a formal investigation to examine whether Spanish plans to grant public financing to the Ford group for an investment project in the Valencia region are in line with EU state aid rules. The opening of a formal investigation gives interested third parties the possibility to comment on the proposed measure. It does not prejudge the outcome of the procedure.

In 2012, Spain notified plans to offer Ford España S.L. a €25.2 million direct grant for the production of a new model of Ford Transit Conect in Almussafes (Valencia), an area with high unemployment and a low level of GDP eligible for regional aid under Article 107(3)(c) of the Treaty on the Functioning of the EU (“TFEU”). The total investment costs to be taken into account for the calculation of the aid amount to €419.9 million.

The EU regional aid guidelines require the Commission to open a formal investigation for projects where certain market share and capacity increase thresholds are exceeded, to avoid undue distortions of competition in markets that are struggling with overcapacity or low growth (see IP/09/993).

The Commission’s preliminary investigation revealed that the project might exceed the authorised 5% increase in production capacity on a market in decline, depending on the data used for the calculation. At this stage, the Commission has doubts that the data provided by Spain is appropriate to determine whether the market concerned is in decline. The Commission will now investigate these aspects further to determine whether the relevant thresholds are met. If the thresholds are not met, the Commission will have to perform an in-depth assessment in order to ascertain whether state aid is necessary for realising the investment project and whether the benefits of the aid for regional development outweigh the distortion of competition that it creates.

The Commission had approved sizeable amounts of regional aid for Ford España in the past: almost €52 million in 2008 and some €23 million in 2010. The total amount of regional aid approved for Ford in Europe since 2007 is roughly €214 million.

Background

The non-confidential version of the decision will be made available under the case number SA.34998 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.