Ford is waiting for a decision from the German federal and regional governments concerning its application for a EUR160m (US$203m) loan guarantee.
The guarantee for a European Investment Bank loan of EUR200m are mainly for development of Ford’s ecoboost engines at its Cologne plant that employs around 1,000 staff.
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“We feel we have a legitimate and viable case for our EIB loan application but we are waiting to hear back on this,” a Ford Europe spokesman in Germany told just-auto.
“We have been talking to the North-Rhine Westphalia government as well as [the German economics ministry) Berlin. The EIB loan guarantees have been available for most of the auto industry in Europe – when it has been difficult to obtain funding.”
Ford is at pains to stress its loan guarantee application is not for restructuring purposes, but is specifically targeted to projects that improve fuel efficiency.
Equally, the loans, which are for partial funding only, form one element of a EUR400m spend by Ford on C02 technologies, for example with developing the new ecoboost engine at the Cologne plant.
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By GlobalData“The EIB is not the issue – the issue is getting the loan guarantees from the German government,” added the Ford spokesman.
What is complicating the situation however, is that North-Rhine Westphalia, in which the Cologne factory is situated, has recently held elections and there appears to be an element of horse-trading as to which political posts are finally distributed.
The region will have a coalition government, but the final decisions on jobs will not be made until next Tuesday when the new Prime Minister is appointed.
Ford also cites cases in France where manufacturers had had finance made available to them. “Some of the [French] finance has been an area of concern from Ford’s perspective, so we argue for a level playing field,” said the spokesman.
Ford’s situation has echoes of General Motors’ recent application by its European division Opel, that requested loan guarantees from the German economics ministry, but these were eventually refused in a bitter battle that appeared to have its roots in political difference of opinion at federal coalition level.
And much like in the Opel situation where the UK government approved loan guarantees to Vauxhall, the British administration has granted GBP360m to Ford to support a GBP450 EIB loan, that will safeguard 2,800 jobs across four plants.
