Opel’s top labour leader Klaus Franz wants the European Commission to limit government incentives for automakers that want to build new plants in central Europe. Franz, chairman of the Opel works council, told Automotive News Europe (ANE) that the incentives are forcing western European countries into unfair competition for jobs with central European countries.

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“This is turning into a beauty contest by governments over plants,” he told ANE. Franz said he is organising a multi-union effort to lobby the commission for tougher laws restricting the amount of incentives auto companies can get to build factories in central Europe.


Large packages of state aid, which in some cases make up 50% of an investment, are eroding the auto industry in the West, Franz argues. “It can’t be that factories close in western Europe and there is overcapacity in central Europe,” Franz told Automotive News Europe.


“This is a real problem. Therefore we have to intervene.”


Franz said that he is planning to meet with the Commission’s staff as well as officials in the European Parliament over the next two weeks. He added that he would be joined by Tony Janssen, president of the European Metalworkers Federation.

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In the last year, GM, Toyota, VW, PSA/Peugeot-Citroen, Kia, Fiat Auto, Suzuki and Hyundai have announced plans to build or expand plants in central Europe. Automakers in the region often receive hefty tax incentives or subsidies from state governments.


For example, Hyundai received EUR150m in direct subsidies and tax relief worth EUR46m to build a factory in the Czech Republic. Kia received EUR200m for its plant in Slovakia.