The European Commission is investigating whether a EUR6.02m grant the Flemish Region intends to give the Volvo Cars factory in Gent, Belgium, to help with training is compatible with EC Treaty rules on state aid.

"The Commission will assess whether the aid does in fact encourage the company to undertake additional training activities. If Volvo would have carried out the training in any event, the aid would not be necessary and would constitute operating aid, which is in principle prohibited," the EC said.

The opening of an investigation allows interested parties to comment on the proposed measures and does not prejudge the outcome of the procedure.

EU competition commissioner Neelie Kroes said: "The Commission strongly supports training activities. However, aid may sometimes cover training costs that the company would have incurred anyway, even without the aid. We therefore have to check that the aid genuinely triggers additional training activities and does not distort competition."

Ford plans to use the grant for training as it introduces a new production platform, which will become a standard within the Ford group for mid-size vehicles and allow Volvo Cars Gent to produce Ford and Jaguar models as well.

"In its preliminary assessment, the Commission doubts that the support from the Belgian authorities would be compatible with the single market as the training programme seems to consist in training activities which are usually undertaken anyway by car producers operating in a competitive market," the EC said.

"In particular, the introduction of a new platform is a regular feature in the car industry, which is necessary to increase flexibility and productivity, and thereby maintain competitiveness."