The Truth About Cars » state aid http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Mon, 14 Jul 2014 12:00:46 +0000 en-US hourly 1 http://wordpress.org/?v=3.8.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » state aid http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Brussels Investigates State Aid To Porsche http://www.thetruthaboutcars.com/2012/07/brussels-investigates-state-aid-to-porsche/ http://www.thetruthaboutcars.com/2012/07/brussels-investigates-state-aid-to-porsche/#comments Wed, 11 Jul 2012 13:28:39 +0000 http://www.thetruthaboutcars.com/?p=452183

Porsche’s soon-to-be 100 percent owner Volkswagen is making money hand over fist. At the same time, the German tax payer is contributing  43.67 million euros to the expansion of Porsche’s plant in Leipzig, Germany, where the new Macan will be made starting in 2014. This has attracted the attention of EU competition regulators.

German authorities agreed to  donate a direct grant of 43.67 million euros and an investment premium to the cause of the Leipzig plant. According to Reuters, EU competition regulators will examine whether the transaction is in breach of EU state aid rules. Latest word from Brussels:

“The Commission will check whether the aid is necessary and proportionate to provide an incentive for the investment and whether its contribution to regional development outweighs the distortion of competition.”

Porsche spokesman Hans-Gerd Bode says it’s for the good of Leipzig and vicinity:

 ”We’re taking steps to improve the structures of the regional economy. That’s fully in line with aid guidelines.” 

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Opel: Brüdelerle Denies Government Aid http://www.thetruthaboutcars.com/2010/06/opel-a-no-on-wednesday-a-maybe-on-friday/ http://www.thetruthaboutcars.com/2010/06/opel-a-no-on-wednesday-a-maybe-on-friday/#comments Wed, 09 Jun 2010 14:33:27 +0000 http://www.thetruthaboutcars.com/?p=358510

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So today’s the day when the fate of Opel was to be decided – according to plan. The committee met today – and decided to decide nothing. They couldn’t come to a conclusion. They handed the decision to Minister Brüderle. Brüderle’s decision: Nein. No government money to Opel, reports Focus. There still is a glimmer of hope for Opel …

Tomorrow, Thursday, Chancellor Angela Merkel will have a sit-down with the premiers of the Opel states. They will discuss alternatives.

As far as Opel and GM are concerned, there aren’t many alternatives. It’s either government money or not. Opel states and unions think that without government money,  three out of four Opel plants in Germany will have to be closed. It could shutter all of Opel.

Even with a loan guarantee, Opel wouldn’t get the money, says the Financial Times Deutschland. The government usually guarantees for 90 percent, the remaining 10 percent of the risk are with the banks. No bank wants to carry that risk. Banks ask GM to cover the risk in cash.

A possible work-around would be the European Investment Bank (EIB). However, an EIB loan would also necessitate government guarantees. Opel would have to front the money first. The loan would also be limited to development projects such as electric cars. It would most likely attract the interest of Brussels. Maybe that’s what Berlin wants to get rid of the hot potato.

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Germany Answering Opel’s Prayers? Not Exactly http://www.thetruthaboutcars.com/2010/05/germany-answering-opel%e2%80%99s-prayers-not-exactly/ http://www.thetruthaboutcars.com/2010/05/germany-answering-opel%e2%80%99s-prayers-not-exactly/#comments Tue, 25 May 2010 14:18:09 +0000 http://www.thetruthaboutcars.com/?p=357257

Pretty soon you’ll hear about a breakthrough for Opel, and that there will be state aid. If not, you’ve read it here first. In any case, treat the news carefully. Munich’s Süddeutsche Zeitung, usually well-informed in Opel matters, reports that the state of Thuringia offered help to Opel. The Süddeutsche calls it a “symbolic offer.”

First, the offer is for €27.2m ($33.3m), a pittance for a company that lost $500m last year. Second, it’s tied to what the €300m state aid from Great Britain is also tied: Serious money from Germany’s federal government.

Two other German states are expected to offer money, under the same conditions. One of the two already denied that they had made a decision. Nick Reilly told the Handelsblatt today that Poland wants to help, and that Spain promised an answer within the next then days. Any offers of cash will come with the usual caveat: We’ll give if Berlin pays the lion’s share. Opel would like to collect €1.8b, they expect €1.3b from Germany.

Today, another of the many committees that have to approve money for Opel is meeting, but nobody expects a decision. They will most likely pass the decision on to the next committee.

Meanwhile in Berlin, Economy Minister Rainer Brüderle sees no reason for undue haste. He thinks, a decision will come “end of May, beginning of June,” says Der Westen. Most observers, Reilly included, don’t expect a decision before June.

Berlin gives GM more reason to regret their “payback” ad. Brüderle makes ominous noises about GM doing well, that they “intensively think about going public,” that they repay their debt before it’s due. Sales are also good. Subliminal message: Do they really need our money?

As in “if Mrs. Merkel declines help, we will pay for it ourselves. Maybe this will make your chancellor happy.”


Update: More delays. The steering committee wanted to convene today. But there was no quorum. Several members didn’t think the matter was worthy of their appearance. Now, the matter will be solved via “Umlaufverfsahren”, or circular resolution:  The files will be sent from one member to the other, for a Ja or Nein. That can take yet another week. Then, on to the next committee.

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Opel: No Decision, No Money http://www.thetruthaboutcars.com/2010/05/opel-no-decision-no-money/ http://www.thetruthaboutcars.com/2010/05/opel-no-decision-no-money/#comments Wed, 12 May 2010 20:01:19 +0000 http://www.thetruthaboutcars.com/?p=356320

As expected, the Loan Guarantee Committee decided not to decide anything in their meeting at the Economics Ministry in Berlin. Opel had requested €1.3b in state aid from Germany. They are making the rounds in Europe to collect another €500m. Countries that committed money, such as the U.K., will only pay if Germany pays.

„The Loan Guarantee Committee of the Federal Government and the States has discussed Opel’s application and has gone forward in the decision making process,“ said the ministry. “As a next step, the Steering Committee for Corporate Financing will review the application, as per the rules,“ DDP reports (via OpenReport.)  Should that committee decide, there still are more that must be consulted. The interesting part is the media echo: There is none. I had to look long and hard to find that quote. Germany has other things to worry about. Such as Madrid against Fulham in the Europe League.

Opel’s Nick Reilly expects a firm answer by the end of the month. Doesn’t look like he’ll get one. The German government is running down the clock until Opel runs out of air.

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Opel: Will They Get Their Money Today? http://www.thetruthaboutcars.com/2010/05/opel-will-they-get-their-money-today/ http://www.thetruthaboutcars.com/2010/05/opel-will-they-get-their-money-today/#comments Wed, 12 May 2010 11:10:09 +0000 http://www.thetruthaboutcars.com/?p=356248

Today could be a big day for Opel. Probably, it won’t. The Loan Guarantee Committee is meeting in the Economics Ministry in Berlin. On the agenda: Opel’s request for €1.5b in state aid. The timing is not coincidental: Last weekend, elections were held in the Opel state of North Rhine Westphalia, which ended in a mess. Coalition discussions are on-going with unsure results. So let’s move quickly while Berlin can make decisions? Not exactly …

Economy Minister Rainer Bruederle poured cold water over high hopes. Before the meeting went in to session, Bruederle refused calls for a speedy decision. In any case, there would be two additional committees that have to decide. And if all else fails, then there would still be Brussels to shoot down state aid.

According to the Muenchner Merkur, Bruederle said that the government „can’t run around with a fire extinguisher all the times. The state of emergency can’t be the new steady-state.” In other words: “Nein.”

We’ll keep you posted.

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Germany To GM: No Money, No Honey http://www.thetruthaboutcars.com/2010/03/germany-to-gm-no-money-no-honey/ http://www.thetruthaboutcars.com/2010/03/germany-to-gm-no-money-no-honey/#comments Tue, 23 Mar 2010 12:21:12 +0000 http://www.thetruthaboutcars.com/?p=350043

Germany’s Economy Minister Rainer Brüderle poured cold water on hopes for a quick decision on state aid for GM’s ailing Opel. GM expects $2.5b in state aid to come from European countries, most of it from Germany. But Germany, represented by Reiner Brüderle, is dragging its heels.

In February, the German government had sent GM a list of 36 questions. By last Friday, no answers had been received in Berlin, therefore, nothing had to be decided in Berlin.

Finally, the catalog of questions has come back, reports Die Zeit. Now the “Credit Guarantee Committee” (“Bürgschaftsausschuss”) of the German government will convene on Wednesday.

They will have a pow-wow, but there will be no decisions tomorrow, said Brüderle today according to Focus Magazine.

The reason for the indecision? GM omitted the answer to the quintessential question: How much money will GM contribute?

GM had promised they would contribute $2.6b, but when the questionnaire came back, there was no formal commitment.

This will go on for a long time. Or until Opel runs out of money.

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