Ford has strongly rebuffed questioning from the European Commission (EC) as to whether Spanish plans to grant state aid for its Valencia project are against regulations.
The EC has opened a formal investigation into what it says is a EUR25.2m (US$32.4m) “direct grant” to produce the Ford Transit Connect in Almussafes, Valencia.
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Despite the probe, the EC concedes Valencia is an area of high unemployment and low GDP, which is eligible for regional aid with total investment costs of EUR419.9m.
“The commission’s preliminary investigation revealed the project might exceed the authorised 5% increase in production capacity on a market in decline, depending on the data used for the calculation,” said an EC statement.
“At this stage, the commission has doubts the data provided by Spain is appropriate to determine whether the market concerned is in decline.”
European Union regional aid guidelines require the commission to open a formal investigation for projects where certain market share and capacity increase thresholds are exceeded, to avoid what it says are “undue distortions” of competition in markets struggling with overcapacity or low growth.
However, Ford has come back fighting, insisting in a statement emailed to just-auto from Germany: “We firmly believe our state aid request for the Ford Transit Connect is in line with EU regulation.
“We will work with the Spanish government and the EU Commission to clarify the situation.”
