Brussels Investigates State Aid To Porsche

Bertel Schmitt
by Bertel Schmitt

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.”

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Schmitt trigger Schmitt trigger on Jul 11, 2012

    Auto manufacturers everywhere have become quite skilled asking for government assistance. All they have to do is say: "if you don't provide this many Dollars/Euros/Kronen, I'll take my factory and its jobs to the Democratic Republic of Congo". Which strikes fear in the hearts of politicians, and they will quickly comply.

    • Challenger2012 Challenger2012 on Jul 11, 2012

      I have work in the Republic of Congo. You DON'T want to go there. I would suggest the beaches of Florida or Mexico.

  • Marcelo de Vasconcellos Marcelo de Vasconcellos on Jul 11, 2012

    Ok. EU. Germany. Balance both. Who wins?

  • Jpolicke Jpolicke on Jul 11, 2012

    I would think the Germans could justify this as assisting the redevelopment of the former East Germany. The EU should back off. If Germany doesn't make money, southern Europe doesn't get their bailouts.

  • CJinSD CJinSD on Jul 11, 2012

    Porsche thinks an affordable sports car would damage their recently-divorced orthodontist market, but selling this Murano knock-off won't?