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.”
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By GlobalDataVolvo’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.
