WRITTEN QUESTION P-3533/96 by Honório Novo (GUE/NGL) to the Commission (4 December 1996)

Subject: Relocation of Grundig Indústria de Portugal's Audio Products Factory in Braga (Portugal)

Recent information confirms that Grundig Indústria de Portugal - Audio Products Factory intends to sell its factory in Braga and relocate its audio/hi-fi production to Hungary. This will endanger some 700 employees, who may possibly be collectively dismissed.

In the 1989 to 1992 period alone, the multinational received aid amounting to almost ESC 1 billion (ECU 5 million), 75% of which was Community co-funding, and that the construction of the building Grundig is now seeking to sell was financed with such funds. It should also be stressed that even so, Grundig created only 34 jobs instead of the 59 which it had promised, despite the fact that at the same time, it cut the workforce considerably.

It is assumed that Grundig Indústria de Portugal will subsequently have proceeded to submit new applications for Community funding via the PEDIP II of the industrial subprogramme of the Second Community Support Framework.

Can the Commission tell me whether it is attempting to take any steps with regard to this attempt to relocate or not, particularly with regard to the sale of buildings funded under PEDIP I, so as to force Grundig to repay the Community and Portuguese national funding it received?

Have there been fresh Grundig applications for Community funding since 1994? If so, what was the Commission intend to do?

If the audio/hi-fi production is relocated to Hungary, does the Commission believe that Grundig will be able to obtain Community funding again there?

Supplementary answer given by Mrs Wulf-Mathies on behalf of the Commission (25 March 1997)

Further to its answer of 9 January 1997 ((OJ C 83, 14.3.1997, p. 131. )), the Commission is now able to provide the following additional information.

In the framework of the Specific programme for industrial development in Portugal (Pedip I) grants were made to Grundig and associate enterprises which were cofinanced by the Pedip special budget line Linha orçamental especifíca (Loe), the European regional development fund and the European social fund. The payments were made by the Portuguese authorities responsible for the execution of the contracts negotiated with the firms concerned. According to information transmitted to the Commission by these authorities the 53 jobs created were maintained by Grundig and the associated enterprises during the four years of validity of the investment contracts. Grundig thus fulfilled this contractual obligation towards the Portuguese authorities. Concerning the possible sale of a building which was cofinanced by Pedip I, the Commission is pursuing its enquiries with the Portuguese authorities.

Fresh applications have been made for funding in the framework of Pedip II by Grundig. These applications have been processed by the Portuguese authorities. They have informed the Commission that one investment study and three small projects in the areas of certification and calibration have been approved with a total of ECU 350 000 in incentive grants. A substantial investment project was considered ineligible by the selection committee.

Concerning possible Grundig activities in Hungary, there is, for the time being, no Community cofinanced aid regime which could support such investments.