EU Antitrust Regulators Investigate Spanish Grant for Ford image

EU antitrust regulators opened an investigation to find out if the 25.2-million-euro grant offered by Spanish authorities to Ford’s van plant in Valencia breached EU state aid rules.

“We firmly believe that our state aid request for the Ford Transit Connect is line with EU law,” Adrian Schmitz, a spokesman for Ford of Europe, said in e-mail. “We will work with the Spanish government and the EU Commission to clarify the situation.”

Ford plans to manufacture a new model of its Transit Connect at the Valencia plant and the estimated costs would be around 419 million euro. Last year the Spanish authorities informed the European Commission about the grant it offered to the US automaker. The EU antitrust regulators said that the grant might have exceeded the 5% increase in production capacity authorized by the government on a market in decline.

“At this stage, the Commission has doubts that the data provided by Spain is appropriate to determine whether the market concerned is in decline,” said the European Commission.

Last year Ford said it chose to produce the Transit Connect Wagon in Valencia, Spain, which will help the automaker solve two problems: the excess capacity in Europe and the lack of manufacturing capacity in North America.

Source: Reuters