EU Red Flags Spain's Help For Ford

Bertel Schmitt
by Bertel Schmitt

In America, government bailouts of ailing car companies are (at least in some circles) viewed as an inalienable right. In the EU, government aid generally is forbidden by law. Ironically, Ford, the only un-bailed-out Detroit company, now is in collision with these quaint continental regulations.

According to Reuters, “ EU antitrust regulators will investigate whether a 25.2 million euros ($32.71 million) grant given by Spanish authorities to U.S. carmaker Ford Motor Co’s van facility in Valencia breached EU state aid rules.”

Ford wants to produce the new Ford Transit Connect in Valencia, and the Spanish government contributed a little to the cause that costs around $540 million.

The rest is a bit technical. According to Reuters, “the European Commission said on Wednesday that a preliminary investigation showed that the project might exceed the authorized 5 percent increase in production capacity on a market in decline,” but the Commission doubts data by the Spanish government and whether “the market concerned is in decline.”

The EU forbids bailouts not because they are seen as inherently evil, but rather because this is not a zero-sum game, and helping some would mean state-sponsored damage to others.

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="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Onus Onus on May 15, 2013

    What about France? They don't seem to care about that stupid EU law.

    • Lorenzo Lorenzo on May 15, 2013

      They get around it with technicalities and their well-deserved reputation for talking at you until you're dizzy and agree with their position.

  • Jz78817 Jz78817 on May 15, 2013

    "In America, government bailouts of ailing car companies are (at least in some circles) viewed as an inalienable right." What "circles" would those be? Or are these weasel words akin to the Wikipedian "some argue?"

  • Dtremit Dtremit on May 15, 2013

    I'm sure this will do wonders to endear the EU to the 27.2% of Spaniards who are jobless.

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