NoC 162/10 Official Journal of the European Communities 3. 7. 90 
STATE AID 
C 43/86 ex NN 69/86 
(France) 
(Articles 92 to 94 of the Treaty establishing the European Economic Community) 
(90/C 162/08) 
Commission communication pursuant to Article 93 (2) of 
the EEC Treaty to other Member States and interested 
parties concerning aid awarded by the French authorities 
to UFAM (Usines et Fonderies Arthur Martin), at Revin. 
In the following letter, the Commission informed the 
French Government of its decision to close the 
procedure initiated on 4 August 1986 (*)-
By letter dated 4 August 1986 (SG(86) D/9463), the 
Commission informed your Government of its decision 
to open the procedure provided for in Article 93 (2) of 
the EEC Treaty in respect of the aid apparently awarded 
to the firm referred to above. 
Your Government submitted its comments by letters 
dated 27 August and 12 November 1986, 20 October 
1987 and 1 July 1988. Three other Member States and a 
sectoral federation presented their observations, which 
were forwarded to your Government by letter dated 
20 September 1989. 
The file shows that the company Usines et Fonderies 
Arthur Martin, acquired in 1976 by the Swedish group 
Electrolux, was recapitalized in 1986, the amount of 
FF 450 million being provided in full by the parent 
company. 
A restructuring plan was agreed in the same year which 
provided, among other points, for the construction 
of a new factory at Revin for the manufacture of a 
new model of washing machine. The plan also led to a 
capacity cut of between 18 % and 30 % in the produc­
tion of top-loading and front-loading washing machines. 
Your Government decided to assist the investment of 
FF 247,5 million (ECU 36 million) as follows: 
— an outright grant of FF 38 million, 
— a freeze on local business taxes for four years, — a loan from the Industrial Modernization Fund 
(FIM) of FF 145 million, 
— assistance from the National Employment Fund for a 
solidarity contract covering a reduction in weekly 
working hours. 
The solidarity contract is tied to an effective reduction in 
weekly working hours. The benefit of the contract is 
awarded without discrimination and without any 
regional or sectoral conditions, its purpose being to 
provide financial compensation for the impact of a 
shorter working week, which is designed to improve 
employment in France. The Commission has decided 
that this measure does not constitute aid. 
As regards the capital grant of FF 38 million, it was 
awarded in accordance with the criteria and objectives of 
the regional planning grant (PAT), since Revin is located 
in the departement of the Ardennes, which is a PAT area 
under the Commission Decision of 10 October 1984. 
As regards the freeze on business taxes, the limitation, a 
local authority decision, is an aid which supplements the 
regional planning grant. 
Lastly, as regards the FIM loan of FF 145 million, 
released in two equal instalments in 1986 and 1987 with 
interest subsidies of 1 % and 1,2 % respectively, it is not 
by its nature likely to resolve the problems of regions in 
difficulty. It constitutes an application of a general 
scheme to promote innovation in industry. The 
Commission decided on 19 December 1984 to allow the 
FIM scheme, provided that significant awards were 
notified to it beforehand pursuant to Article 93 (3). 
The Commission finds, however, that in the case in point 
the investment to be aided constitutes a significant award 
and regrets that the French Government did not fulfil its 
obligations under Article 93, since it already awarded a 
first instalment of FF 72,5 million to UFAM in May 
1986, and the balance in April 1987 without awaiting the 
final decision of the Commission. 
(') OJ No C 310, 4. 12. 1986, p. 6. The Commission has decided that the FIM loan qualifies 
for the exemptions provided for in Article 92 (3) (c). It 
3. 7. 90 Official Journal of the European Communities NoC 162/11 
took into account, in particular, the innovatory features 
of the production lines at Revin and of the washing 
machines manufactured there, as well as the cuts in 
production capacity and the fact that the aggregate net 
grant equivalent of the three aids does not exceed the 
PAT ceiling of 17 % agreed by the Commission for 
Revin. The Commission has therefore decided to close the 
Article 93 (2) procedure. 
This letter will be published in the Official Journal of the 
European Communities to inform the governments of the 
other Member States and interested third parties of this 
decision.