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November 9, 2005

BELGIUM: European Commission eyes how Ford plant spent subsidy

The European Commission on Wednesday (9 November) opened an investigation into a EUR12.28m (US$14.42m) government subsidy to Ford's Belgian plant.

The European Commission on Wednesday (9 November) opened an investigation into a EUR12.28m (US$14.42m) government subsidy to Ford’s Belgian plant.

According to The Associated Press (AP), the grant was intended to help pay the costs of training workers, but the EU said it was concerned that the money might give Ford an unfair advantage over rivals.

“There is a risk that this aid simply covers operating expenses of the Genk plant,” EU competition commissioner Neelie Kroes told AP. She said she was looking for further details on the scheme so she could decide if it met EU guidelines on training aid.

The Flemish Region plans to pay for just over a third of the EUR33.84 m training scheme, the report said.

AP noted that EU rules insist that training for a specific job function cannot be subsidised as much as general training that could produce skilled workers for the entire industry.

The Genk plant opened in 1964 and has produced more than 12 million vehicles. In 2003, the carmaker slashed its 9,000-strong work force by a third and spent some EUR700 m to create a new flexible manufacturing system at the facility, the report said. The factory currently employs 4,946 people and produced 207,163 vehicles last year.

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