The Belgian region of Flanders has said it was willing to offer Volvo Car between EUR200m and EUR300m (US$280m to $420m) in loan guarantees.
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The car company’s CEO Stephen Odell and Flemish premier Kris Peeters have agreed to set up a group to work out details of the deal.
Belgian public broadcaster VRT said Peeters would aim to seal a deal before regional elections on 7 June. Volvo had been seeking loan guarantees in order to secure a $670m loan from the European Investment Bank.
Talks between Volvo and the Swedish government over such a guarantee were put on hold earlier this month. The company, which has a plant in Ghent, Belgium, then approached the Flemish government.
Peeters told VRT that the government would require a long-term commitment from Volvo to its Ghent operations. He said: “We are not going to give guarantees for factories anywhere other than in Flanders. So firm commitments must be made and certainly Volvo’s long-term future must be assured before we can give guarantees.”
Volvo’s plant in Ghent is its largest outside Sweden. It employs about 4,000 workers and produced about 180,000 cars in 2008, a company spokesman said, though output would be lower this year with some 30 non-production days planned.
