2003/282/EC: Commission Decision of 27 November 2002 on the State aid implemented by Germany for Doppstadt GmbH (notified under document number C(2002) 4482) (Text with EEA relevance)
Date: 2002-11-27
Institutions: European Commission
Subjects: Germany, State aid, agricultural vehicle, aid for restructuring, control of State aid, privatisation

L 108/8

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Official Journal of the European Union

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COMMISSION DECISION

of 27 November 2002

on the State aid implemented by Germany for Doppstadt GmbH

(notified under document number C(2002) 4482)

(Only the German text is authentic)

(Text with EEA relevance)

(2003/282/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(5)

Having regard to the Treaty establishing the European
Community, and in particular the first subparagraph of Article
88(2) thereof,

Having regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) thereof,

Having called on interested parties to submit their comments
pursuant to the provisions cited above (1),

Whereas:

I. PROCEDURE

a

is

GS

and

KG,

GmbH

hive-off

Fahrzeug-

subsidiary

vehicle
Doppstadt
the former
(Auffanggesellschaft), which arose out of
its
LandTechnik
Sch(cid:246)nebeck GmbH (LTS)
wholly-owned
und
Systemtechnik GmbH. LTS belonged to a group of eight
former eastern German companies, from which, under
the initial privatisation in 1994, the EFBE Verwaltungs
GmbH & Co Management
now Lintra
Beteiligungsholding GmbH, emerged. Since the original
privatisation plan failed in December 1996, the Federal
Agency for Special Tasks associated with unification
(BvS:
vereingungsbedingte
Sonderaufgaben) decided in January 1997 to continue
the restructuring of potentially viable Lintra subsidiaries
with a view to preparing them for sale. Since LTS had
received aid that was to be assessed in the context of
the other notified restructuring aid,
the case was
registered as non-notified aid. The aid paid to LTS via
subject of
the
Lintra Beteiligungsholding was
Commission’s
Lintra
to
on
Beteiligungsholding GmbH (3) (Lintra decision).

Bundesanstalt

decision

the

aid

f(cid:252)r

(1)

(2)

(3)

restructuring aid for

By letter dated 5 October 1999, Germany notified the
Commission pursuant to Article 88(3) of the EC Treaty
former
of
LandTechnik Sch(cid:246)nebeck GmbH to Mr
Ferdinand
Doppstadt. The
renamed Doppstadt
GmbH in May 1999.

the privatisation of

company was

By letter dated 1 August 2000,
the Commission
informed Germany that it had decided to initiate the
procedure laid down in Article 88(2) of the EC Treaty in
respect of the aid.

The Commission decision to initiate the procedure was
the European
published in the Official
Communities (2). The Commission invited interested
parties to submit their comments on the aid.

Journal

of

(4)

The Commission received no comments from interested
parties.

(1) OJ C 278, 30.9.2000, p. 17.
(2) See footnote 1.

II. DETAILED DESCRIPTION OF THE AID

(6)

(7)

is a hive-off
The aid recipient, Doppstadt GmbH,
the former LandTechnik
vehicle, which arose out of
Sch(cid:246)nebeck GmbH (LTS)
its wholly-owned
and
subsidiary GS Fahrzeug- und Systemtechnik GmbH (GS).

On 10 May 1999 the operational business of LTS and
GS was transferred to a new company with a share
capital of EUR 25 641 (4). On the same day the

(3) Commission Decision 2001/673/EC of 28 March 2001 on State
aid implemented by Germany for EFBE Verwaltungs GmbH & Co
Management KG (now Lintra Beteiligungsholding GmbH, together
with Zeitzer Maschinen, Anlagen Ger(cid:228)te GmbH; LandTechnik
Schl(cid:252)ter GmbH; ILKA MAFA K(cid:228)ltetechnik GmbH; Motoren- und
Systembautechnik GmbH;
Spezialapparatebau GmbH;
SKL
Madgeburger Eisengie(cid:223)erei GmbH, Saxonia Edelmetalle GmbH and
Gothaer Fahrzeugwerk GmbH) (OJ L 236, 5.9.2001, p. 3).

(4) Converted into euro at EUR 1 = DEM 1,95; the values have been

rounded up.

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company’s shares were transferred to Mr Ferdinand
Doppstadt. The company’s name is Doppstadt GmbH.
LTS and GS were subsequently dissolved.

(8)

(9)

its

registered office in Sch(cid:246)nebeck,
Doppstadt has
Saxony-Anhalt. It produces various categories of carrier
equipment,
vehicle,
chaff
environmental-engineering
cutters and system components.
It employed 305
persons in May 2002.

The investor, Mr Doppstadt, was chosen under open
tendering procedure early in 1999. There were 21
interested firms. Mr Doppstadt’s offer emerged from
negotiations with the bidders as the best bid. The
purchase price for the newly established company was
EUR 25 641.

(10)

The investor is operations manager of a group of seven
companies active in the vehicles, customer service and
foreign distribution sector. Prior to the acquisition, his
companies had a total workforce of 38.

1. Restructuring

(11)

The restructuring period was originally intended to last
from May 1999 to the end of December 2002. The
original restructuring plan provided for investments and
funding)
restructuring measures
amounting to EUR 39 722 million. The object of the
investment
to replace obsolete
machinery and tools, increase the quality and flexibility
of
comply with
process
environmental standards.

in particular,

production

(including

public

and

the

is,

to use the synergies of

(13) According to the information provided, the aim of the
restructuring is the completion and targeted extension
of the Doppstadt product range. An essential part of the
restructuring plan is
the
Doppstadt group by marketing the vehicles under the
established Doppstadt brand. The future strategy is to
concentrate on municipalities and positioning Doppstadt
GmbH as a supplier of a complete range of carrier
vehicles. In addition, under the new plan, up to 25 % of
production capacity will be used for subcontracting for
Doppstadt Calbe GmbH. The remaining capacity will be
used to produce models in their current and developed
versions plus new products. It was also explained that
25 % of future turnover would be generated by shifting
production from the plants located in Velbert and Calbe.

(14)

Products will be marketed with the help of DVG
Doppstadt Vertriebsgesellschaft GmbH, using the current
distribution network in Germany and abroad. A sales
volume of at least 500 units of the main product, the
TRAC special carrier vehicle (Trac) is anticipated, and an
annual increase in sales of 10 % to 15 % is forecast by
the end of the restructuring operation.

(15)

The company’s business development forecast for 2002
assumed a profit of EUR [(cid:133)] (*) million on a turnover
of EUR [(cid:133)] (*) million. For 2003, the profit forecast
was EUR [(cid:133)] (*) million on a turnover of EUR [(cid:133)] (*)
million.

(16)

The geographic breakdown of Doppstadt GmbH’s sales
in 2000 was as
follows: Germany [(cid:133)] (*) %, CIS
[(cid:133)] (*) %, western Europe [(cid:133)] (*) %.

(12)

increase the share capital of

The investor will
the
company to EUR 10,25 million by 31 December 2002
and provide the company with the necessary working
capital of at least EUR 14 million.

(17)

investigation
In the decision to initiate the formal
Commission
the
procedure
established that the financing for the restructuring plan
was as follows:

(initiation

decision)

(*) Text which has heen omitted is slown as [(cid:133)] and represents

business secrets.

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30.4.2003

Costs

Financing

BvS/Land

Investments

27,13

Approved schemes:

(EUR million)

Investor

6,934

GA contribution (5)

Investment premium (6)

8,14

5,42

Grant from Saxony-Anhalt

12,079

Restructuring costs

12,58

Loss compensation

6,4

BvS grant

Working capital

6,685

Original production facilities

6,6

Waiver of claims

5,415

BvS

BvS

BvS

Total

74,901

14,07

13,552

2,6

6,6

5,415

53,896

21,004

= 72 %

= 28 %

Note: the table contains rounded figures and is not arithmetically correct.
(5)

27th Framework Plan for the joint Federal/L(cid:228)nder task (cid:145)Improving regional economic structures(cid:146). State aid C 84/98,
approved by Commission decision of 21 April 1999, communicated to Germany by letter, SG(1999) 03472, 17 May
1999.
Investment Subsidy Law (Investitionszulagengesetz) 1996; State aid N 494/A/95; decision communicated to Germany by
letter, SG (96) 3794, 11 April 1996.

(6)

(18)

In addition to the above measures, Germany also
included an EUR 2,8 million contribution towards the
labour costs of the restructuring. This is provided by the
Doppstadt GmbH workforce through a partial pay
restraint during the restructuring period.

(20)

2. The decision to initiate the proceedings under
Article 88(2) of the EC Treaty

(19)

investor, Mr

In the initiation decision, the Commission noted that
the
F. Doppstadt, had no previous
experience in the field of carrier vehicles and had
limited financial resources. In addition, the Commission
noted that the information on the relevant markets in
its possession was not sufficient to enable it to conclude
whether the rather ambitious sales targets on which the
long-term viability of
the company was based were
realistic and plausible. Therefore, the Commission had
doubts about the ability of the restructuring plan to
ensure the company’s long-term viability.

(21)

In the initiation decision the Commission also noted
that it did not have enough information to conclude
that the EUR 5,3 million waiver granted to LTS in 1997
was not aid for current restructuring. Account was
taken of this, therefore, in the initiation decision, in the
restructuring finance.
It was consequently established
that the public share of the financing would be EUR
53,896 million, or 72 % of
the total costs. The
beneficiary’s contribution would be EUR 21,004 million
(28 %). The Commission doubted, therefore, whether the
investor’s contribution could be significant, as provided
for in the rescue and restructuring guidelines.

the planned
The Commission further noted that
In all,
restructuring consisted mainly of
EUR 27,133 million (69 %) of the total restructuring
cost of EUR 39,732 million would be investment. This
indicates that the purpose of the project is to finance
new investment rather than a restructuring operation. In
the
this particular

investments.

are doubts

about

there

case

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proportionality of the aid. If the project is regarded as
new investment instead of restructuring, its aid intensity
will have to respect the ceiling for regional aid.

(22)

The Commission also pointed out that additional claims
against
the final
the former LTS might arise out of
decision in the still-pending case concerning Lintra
Beteiligungsholding (C 41/99); these would have to be
added to the costs of the present restructuring plan.
Such additional claims should be taken into account in
assessing whether the restructuring plan will ensure the
company’s long-term viability and whether the aid is
proportional.

(cid:151) existing contracts with the same suppliers,

(cid:151) same volume of output, but a different product

range,

(cid:151) same production plant,

(cid:151) same processes, raw materials and inventory,

(cid:151) same technical conditions.

III. COMMENTS FROM GERMANY

(23) Germany submitted its comments on the initiation
decision by letter dated 6 November 2000. It informed
the Commission of changes to the restructuring plan by
letter dated 21 September 2001.
Its comments are
reproduced below.

1. Liabilities resulting from the (cid:145)Lintra(cid:146) decision

(24) As regards any additional claims against the former LTS
that should be taken into account in this proceeding,
Germany would refer to its opinion in case C 41/99
concerning Lintra Beteiligungsholding. The opinion
relates to Lintra’s claims against LTS (7), amounting to a
total of EUR 4 088 648,54. They were settled by LTS in
liquidation.

2. Classification of the project as restructuring

the restructuring plan satisfies all

(25) As regards describing the privatisation of the former
LTS as a restructuring operation, Germany would
explain that
the
criteria set out in the guidelines. The new investor has
carried on the business of LTS/GS, which had been in
liquidation since 1999, without interruption. The first
restructuring measure was to set up the hive-off vehicle,
Doppstadt GmbH, which continued the businesses of
the two earlier companies on the following basis:

(cid:151) 192, initially, of the original 260 employees,

(26)

The firm was therefore initially continued under the
same unprofitable conditions as existed when the
predecessor companies went
the
same time, the restructuring plan devised by the buyer
was gradually put into effect.

into liquidation. At

(27) According to Germany, the restructuring plan consists

the following measures:

(a)

Internal measures

(cid:151) personnel: training of the workforce taken over;
providing for the future by expanding training
activities,

(cid:151) sales:

integration into the Doppstadt group’s

established sales network,

(cid:151) product range: adapting the existing range by
discontinuing
and
unprofitable
replacing them with new, modern products and
promising market segments,

vehicles

(cid:151) non-capitalisable restructuring measures: review
of the production-line layout and rationalisation
of work processes with the aim of converting
a mass-production
the
manufacturer
of
supplier
customised special machines;

firm from being

a modern

to

(b) Investments

(cid:151) dealing

with

the

investment
existing plant

modernisation of
statutory
requirements,
flexibility, replacing old tools and machinery;

environmental
improving

quality,

backlog:
to satisfy
protection
increasing

(cid:151) same order book,

(c) Financial measures

(7) When it was part of Lintra, LTS was called LandTechnik Schl(cid:252)ter

GmbH.

(cid:151) capital contribution by buyer, workforce, BvS

and Saxony-Anhalt; loss compensation.

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restructuring

(28) According to Germany, the investments are only part of
an inseparable
firm’s
the
component of
restructuring plan. The
investments alone cannot make the firm profitable in
the long term without the work processes also being
range
reorganised
modernised and the finances restructured.

rationalised,

the overall

product

and

and

the

are

(29)

Therefore, according to Germany, the restructuring plan
satisfies the criteria of the rescuing and restructuring
guidelines
a new
investment for the purposes of regional development.

and cannot be

considered as

3. Viability of the restructuring plan

experience

has more

the Doppstadt

than 30 years’

(30) As far as the investor is concerned, Germany explains
that
in whose firm Ferdinand
family,
Doppstadt worked before he went into business on his
of
own,
manufacturing carrier vehicles. Direct use was made, in
the development of the carrier vehicles, of the practical
experience gained,
in the family’s own business, of
agriculture, services for local authorities, and sales and
other customer services for Unimog and other brands.
In the early 1970s Doppstadt developed the control
hydraulics for the Mercedes Benz MB-trac 65. At that
time Doppstadt
the
also carried out
Deutz-Intrac.

trials

for

(31)

The focus of the Doppstadt group has always been on
developing highly customised specific system solutions
in niche markets. In the past, Doppstadt has drawn on
its own or, in some cases, other manufacturers’ existing
connect up with
carrier
to power or
Doppstadt-developed attachments
the
example
(for
Grizzly as a combination of the Steyr-Tracs with the
Doppstadt converter).

vehicles

(37)

(32) As

regards

resources of

the financial

the investor,
Germany explains that under the privatisation contract,
the buyer’s financial obligations are secured by a bank
guarantee of EUR 2,05 million, a commitment by a
bank in the usual form to secure investment obligations
of EUR 6,934 million and a commitment by a bank for
a capital loan to secure operational financing amounting
to EUR 14,07 million. According to Germany, these
undertakings for funding from the company’s banks
should be sufficient to allay the Commission’s doubts as
to the investor’s credit standing.

due to problems that were encountered in relation to
the main product, the Trac, after it had been introduced
onto the market.

(34) Germany explains that the failure to reach the initially
planned turnover and financial targets was mainly due
to not reaching the turnover targets for carrier vehicles.
When the investor took over the company,
it was
assumed that the main product of the LTS, the Trac,
immediately. The
could be brought
to the market
implementation
restructuring measures
(production,
logistics and distribution) started on the
basis of the assumption that the Trac was market-ready.
Consequently, personnel and stocks were increased
considerably. The first Tracs were delivered at the end
of 2000, and only then did it become evident that the
Trac was technically outdated and did not correspond to
the customers’ requirements for a modern multi-purpose
carrier vehicle.

the

of

(35)

restructuring

the
The modified
restructuring period by one year. Positive results are
expected in 2003 instead of 2002 as originally forecast.
The main elements of
the modified plan are the
following:

prolongs

plan

(36) A new manager was

appointed for production,
in January 2001. A
engineering and development
special design team was set up for the modernisation of
the Trac series, and a new product was developed. The
work
teamwork
introduced. The workforce was reduced by 71 persons
by 30 June 2001.

processes were

optimised

and

in this

rethought,

dealers was

respect were
is being sought,

and
Cooperation with
redefined. An
requirements
additional manager
and external
consultants were commissioned to help the company
advisory
through
committee was set up in August 2001 to improve
controls and to help identify potential problems in time.

process. An

restructuring

the

(38) As regards investments,

it was explained that by 18
June 2001 investments worth EUR 10,063 million had
already been carried out. However, the total amount of
investment is EUR 9,581 million less than what is was,
since the company will no longer build its own power
station. Due to liberalisation of the energy markets, it
will not be necessary or economic to operate a
company power station.

(a) The modified restructuring plan

(33) Germany also provided a modified restructuring plan.
According to Germany, the plan had to be amended

(39)

The cost of other restructuring measures will go up
from the original EUR 12,589 million to EUR 17,367
million, an increase of EUR 4,777 million. By June

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2001 measures worth EUR 13,603 million were being
financing was
carried out. The need for additional
caused by the need to modernise the Trac-series. EUR
[(cid:133)] (*) million is needed for the development of the
Tracs. For presentation of the product in trade fairs and
for other measures supporting the marketing and sales
the Tracs, EUR [(cid:133)] (*) million is needed. An
of
additional
for
reorganisation of the company (introducing teamwork,
improvement of
increase of
productivity and external consultants). In addition, the
current situation of
the company requires additional
working capital of EUR [(cid:133)] (*) million.

internal communication,

EUR [(cid:133)] (*) million

needed

is

(40) Germany explains

that

the additional measures are
being financed by state aid. However, since the reduced
investment costs result in a corresponding decrease in
investment aid, total restructuring aid under the new
plan will be EUR 45,409 million, which is less than the
amount provided for in the original plan. The financing
by the investor remains the same. Consequently, the
modified restructuring plan results in total restructuring
costs of EUR 69,26 million. This is EUR 3,071 million
less than the costs in the original plan.

by

production

the increase of

Initially,
generated

planned.
turnover will be
the
mainly
on
environmental-engineering side. From 2003, after the
new Trac-series has been brought
these
the new plan,
products will be a cornerstone of
vehicles
Trac
turnover.
generating
(including spare parts) will account for some [(cid:133)] (*) %
of total turnover in 2003.

to market,

one-third

of

Expected share of total company turnover accounted for
by Trac vehicles (including spare parts)

2001

2002

2003

EUR
mil-
lion

%

EUR
mil-
lion

%

EUR
mil-
lion

%

Total turnover

28,8

100 [(cid:133)] (*) 100 [(cid:133)] (*) 100

Trac

3,8

13,3 [(cid:133)] (*) [(cid:133)] (*) [(cid:133)] (*) [(cid:133)] (*)

Spare parts

2,8

9,9 [(cid:133)] (*) [(cid:133)] (*) [(cid:133)] (*) [(cid:133)] (*)

Note: the table contains rounded figures.

(41) With regard to the financing of the restructuring as
identified by the Commission in the initiation decision,
Germany acknowledges that the BvS loan of EUR 2,6
million and the transfer of assets worth EUR 6,6 million
are restructuring aid. However, Germany stresses that
the price of EUR 25 641 paid by the investor for the
new company should be included in the investor
contribution.

(44) Germany states that to achieve the estimated turnover
for Tracs the new planning provides for sales of [(cid:133)] (*)
Trac vehicles in 2002 and [(cid:133)] (*) in 2003. At the end
of the restructuring, sales of between [(cid:133)] (*) and [(cid:133)] (*)
units a year are envisaged.

(42)

The forecast in the new plan for the future financial
development of the firm is shown in the following table:

(b) Market information

(EUR million)

2001
(orig-
inal)

2001
(new)

2002
(orig-
inal)

2002
(new)

2003
(orig-
inal)

2003
(new)

Turnover

[(cid:133)] (*)

[(cid:133)] (*)

[(cid:133)] (*)

[(cid:133)] (*)

[(cid:133)] (*)

[(cid:133)] (*)

Result

[(cid:133)] (*)

[(cid:133)] (*)

[(cid:133)] (*)

[(cid:133)] (*)

[(cid:133)] (*)

[(cid:133)] (*)

Note: the table contains rounded figures.

(43) Germany explains that under the new plan the return of
the company to viability is deferred by one year
compared with the original plan. Positive results are
anticipated in 2003 instead of 2002 as originally

tractors for farming but

(45) Germany explained that Doppstadt GmbH is active in
the carrier vehicles of various categories segment of the
market.
Its range includes customised municipal and
that can be used in a variety of
special vehicles
situations and in many different areas. The vehicles can
be used as conventional
in
other areas too, as they are able to use a wide range of
found in
accessories and special-purpose equipment
other sectors. The information supplied shows that it is
possible to use a wide range of equipment
in the
forestry and construction
agricultural,
carrier
sectors. The
and
vehicles
municipalities), private
and
agricultural
forestry firms. The new product
range offered by
Doppstadt in carrier vehicles covers categories from 60
kW up, but is aimed in particular at the upper segment
above 85 kW.

(towns
contractors

local authority,

target markets

for Doppstadt

are mainly

authorities

local

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Official Journal of the European Union

30.4.2003

same. Doppstadt

(46) According to Germany, the tractor market is used to
define the market volume on the Community market
and of competitors. It must be borne in mind, however,
that both tractors and carrier vehicles are not entirely
homogeneous markets with interchangeable products,
since the potential applications of rival products are not
entirely the
are
designed as multi-purpose vehicles for the use of special
equipment. Even though to some extent the vehicles can
perform the same functions as lorries, they are generally
not to be used for tasks where one would expect lorries
to be used. The overlaps with lorries are not particularly
great, therefore, and in more than 90 % of all products
interchangeable.
vehicles
carrier
tractors
Tractors
for
the
therefore
determining the relevant market volume.

reference market

carrier vehicles

and
are

are

(47)

(48)

From 1995 to 1997 demand for
tractors on the
Community market was marked by annual growth rates
of around 6 %. From 1997 to 1998 the growth rate fell
to 2 %. Since 1998, demand for new vehicles has been
stagnant. In contrast to other segments, however, the
demand for tractors with a rating of more than 85 kW
has
years. This
segment’s share of registrations in Germany increased
from 25 % to 33 % between 1995 and 1999.

significantly

in recent

increased

(21 %),

The biggest competitors in the German tractor market
include Fendt
John Deere (20 %), Case/Steyr
(13 %), Deutz-Fahr (9 %), New Holland (6 %) and Massey
Fergusson (5 %), which together account for about three
quarters of
the
market is shared by a number of European and Asian
manufacturers. Before the launch of
the new Trac,
Doppstadt had about a 3 % share of the carrier vehicle
market in 2001.

the market. The remaining 25 % of

changed in recent years, especially as regards flexibility
and power. Many former small farmers now also work
as contractors for larger farms and/or local authorities
and versatile
and therefore need powerful
carrier
vehicles, working very different
types of ground at
higher speeds and capable of covering longer distances.

(51) According to Germany, demand for carrier vehicles in
the local government sector (road maintenance, parks
influenced essentially by more
and landscaping)
demanding statutory requirements
in environmental
matters and must therefore be considered stable.

is

(52) As a conclusion Germany states that the market for
is stagnant at present.
tractors and carrier vehicles
Nevertheless,
for Doppstadt
there is market potential
GmbH in the growth regions, especially since the
company offers customised special vehicles in niche
sections of the upper and lower performance classes,
which are marked by high growth rates despite the
stagnation in demand overall.

and

analysis

the Trac, has

(Ackerschlepper)

by Management

(53) According to the information submitted by Germany, in
particular one main product,
to be
considered a niche product between the traditional
tractor
Daimler-Chrysler’s
multi-purpose vehicle the Unimog. Germany supplied a
market
a
consultancy with a special focus on engineering, which
in particular explains the prospects of the new Trac.
According to the market
the previously
encountered technical problems have been solved by the
new Trac. The Trac now meets
technical
requirements demanded by the target market. The study
concludes that there exists a niche in the market for the
Trac, which has not been occupied by competitors.
According to the study the niche arises
the
following reasons:

Engineers,

analysis,

the

for

(49)

The Community tractor market
is dominated by the
manufacturers New Holland (16 %), Agco (12 %), John
Deere (12 %), Case/Steyr (10 %) and Massey Ferguson
(8 %) as the major competitors. At 0,2 % in 1999,
Doppstadt’s market share was negligible.

(50) As regards the future prospects of the market, Germany
is regulated by the
explains that since the market
Community, demand for tractors and carrier vehicles for
the agricultural machinery sector in western Europe is
relatively stable and unaffected by world trends in the
farmers’ requirements
price of wheat, etc. However,
they use have
regarding the

commercial vehicles

(54)

(55)

The new Trac mainly targets the segment above 85 kW,
recent years,
where there has been ingrowth over
despite the stagnation on the overall
tractor market.
Vehicle registrations in that segment in Germany have
increased from 31 % to 40 % of the total from 1995 to
2001.

The Trac is based on the former Mercedes Benz model
(cid:145)MB-Trac(cid:146), which is not produced any more but is still
widely used, although it will soon be out of date. The
new Trac is the likely choice for
the replacement.
Doppstadt, which bought the patent for the MB-Trac,
can use its former distribution channels.

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(56)

The new Trac can be used for many different purposes,
even outside the traditional target market for tractors
(agriculture), where there is a growing need for these
products. Other customers are municipalities and firms
that need special- and multi-purpose vehicles, e.g.
airports, construction firms and railway companies.

4. Financing of the restructuring and
proportionality of the aid

(a) Workers’ contribution to the restructuring

to

concentrate

plans
its
(57) As Daimler-Chrysler
multi-purpose concept
(the Unimog) on road-going
vehicles, this niche is expected to grow. The market
study estimates possible sales
to
[(cid:133)] (*) Tracs per annum in Europe after the year 2003.
An inquiry at Doppstadt sales agents included in the
analysis produced the following estimated sales figures:

figures of

[(cid:133)] (*)

Estimated Trac sales figures (as indicated by sales agents)

2003

2004

2005

2006

Germany

[(cid:133)] (*)

[(cid:133)] (*)

[(cid:133)] (*)

[(cid:133)] (*)

Europe

[(cid:133)] (*)

[(cid:133)] (*)

[(cid:133)] (*)

[(cid:133)] (*)

(60) As

regards

the workers contribution of EUR 2,82
million to the restructuring, Germany takes the view
that the fact that the workforce is foregoing part of its
wages or salaries must be considered as a contribution
from the firm’s own resources within the meaning of
point 3.2.2.(iii) of the Community guidelines on State
aid for rescuing and restructuring firms in difficulty (8).
The crucial factor in respect of this criterion is whether
there is a contribution by the firm being restructured,
which is the beneficiary of
the aid. This may mean
either the contribution of funding by the investor or
some other contribution by the firm. The waiver by
employees of income in the form of wages must be a
relevant contribution to a successful restructuring and
may be
contribution.
the EUR 2,82
Consequently, Germany argues
million wage reduction accepted by the workforce must
be considered as an integral part of the financing plan
and taken into account when calculating the overall
costs of restructuring.

added to the beneficiary’s

that

(c) Development of the company

(58)

(59)

Besides the Trac the company’s turnover is mainly to be
generated by environmental-technological machines. The
turnover of that segment after the integration of some
of the investor’s activities at another location in 2000
could be increased from the earlier EUR 294 358 to
EUR 9,6 million and in 2001 exceeded the EUR 13
million forecast by the plan.

Furthermore, Germany states that the new Trac has now
been launched successfully on the market. According to
Germany, [(cid:133)] (*) models were sold by Doppstadt in the
first three months after the market launch in March. A
first positive monthly result of EUR [(cid:133)] (*) was
achieved in April 2002. Current orders up to May 2002
numbered [(cid:133)] (*). Compared to the previous year
turnover could be increased by 40 %. Latest
figures
show that the turnover and result up to July 2002 kept
in line with the plan. Unfortunately in August
the
company faced a downturn as it had to close its
production due to the eastern German floodings.

(b) The waiver by BvS of the claim for EUR 5,424 million

against LTS

In April/May 2000,

(61) Germany explains that BvS had not waived its claims
against LTS in liquidation.
the
auditors corrected LTS’s annual accounts, so that EUR
5,424 million (including accrued interest)
is again
shown as a liability vis-(cid:224)-vis the BvS in the accounts for
the year ending 31 December 1998. The sum will be
paid from the liquidation proceeds of LTS. Since BvS
has not waived the claim, the amount should not be
considered as aid to the present
restructuring, as
claimed by the Commission in the initiation decision.

IV. ASSESSMENT OF THE AID

1. Existence of state aid

(62) According to Article 87(1) of the EC Treaty, any aid
granted by a Member State or through State resources
in any form whatsoever which distorts or threatens to
distort competition by favouring certain undertakings or
in so far as it
the production of certain goods shall,

(8) OJ C 368, 23.12.1994, p. 12.

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30.4.2003

affects trade between Member States, be incompatible
with the common market. Pursuant to the established
case-law of the European Courts, the criterion of trade
being affected is met if the recipient firm carries out an
economic activity involving trade between Member
States.

development of a particular economic sector rather than
to promote the economic development of a region.
Thus the aid should be assessed under Article 87(3)(c)
rather than Article 87(3)(a) EC Treaty.

(63)

(64)

The Commission notes that in the present case the aid
is granted through State resources to an individual
company favouring it by reducing the costs it would
normally have to bear if
it wanted to carry out the
notified restructuring project. Moreover, the recipient of
is a company whose
the aid, Doppstadt GmbH,
activities are the production of carrier vehicles and
environmental-engineering
are
economic activities involving trade between Member
States. Therefore, the aid in question falls within the
scope of Article 87(1) of the EC Treaty.

equipment, which

The Commission further notes that, as regards this aid,
the German authorities failed to comply with their
obligation under Article 88(3) EC Treaty to inform the
Commission in sufficient time of the plans to grant the
aid. From a formal point of view, therefore, the aid is
unlawful. This does not necessarily mean, however, that
the aid is incompatible with the common market. Thus,
the individual measures must be examined under Article
87 EC Treaty.

(68)

The project concerns the restructuring of the company
in accordance with the restructuring plan submitted by
the investor. Restructuring aid for firms in difficulty is
assessed pursuant to the Community guidelines on State
aid for rescuing and restructuring firms in difficulty.
Rescue and restructuring aid may, under Article 87(3)(c)
of
facilitate the development of certain
economic activities where it does not adversely affect
trading conditions to an extent contrary to the common
interest if the conditions laid down in the guidelines are
met.

the Treaty,

(69)

In the present case, under paragraph 101 of the 1999
Community guidelines on State aid for rescuing and
restructuring firms in difficulty (9), the 1994 guidelines
are applicable, since neither the total aid nor a portion
thereof was granted after the 1999 guidelines were
published.

3. Scope of the assessment

2. Possible grounds of compatibility

(70)

In the initiation decision, the Commission found that
further claims against Doppstadt might arise out of the
Lintra decision (10).

(65) A derogation from Article 87(1) of the EC Treaty can
result from either Article 87(2) or Article 87(3) of the
EC Treaty.

(71)

(66) Germany is not claiming that the aid should be regarded
as compatible with the common market under Article
87(2). Indeed, it is evident that this provision does not
apply.

The Lintra decision was adopted on 28 March 2001. By
letter dated 29 June 2001 Germany informed the
Commission that the unlawful aid of EUR 3 252 373
allocated to the former LTS by the decision of 28 March
2001 had been recovered with interest, being a total of
instruction dated 22
EUR 4 088 648,54. A payment
June 2001 was forwarded to the Commission. The
unlawful aid was paid back by LTS in liquidation. The
measures
the
subject of the assessment in the present decision.

therefore, are no longer

in question,

(67)

This case falls under Article 87(3) of the EC Treaty, a
provision that gives
the Commission discretion to
permit State aid in certain specified circumstances. The
derogations of Article 87(3)(b),
(d) and (e) were not
invoked in the present case and are indeed not relevant.
Article 87(3)(a) empowers the Commission to approve
State aid meant to promote the economic development
of areas where the standard of living is abnormally low
or where
underemployment.
Saxony-Anhalt falls within this definition. In this case,
however, the main purpose of the aid is to promote the

serious

there

is

(72)

The Commission further notes that, according to the
modified restructuring plan, EUR 6,165 million of the
total public contributions to the restructuring of EUR
45,409 million is being granted under
approved
schemes. Therefore, this aid is considered as existing aid
within the meaning of Article 1(b)(ii) of Council
Regulation (EC) No 659/99 of 22 March 1999 laying
down detailed rules for the application of Article 93 of

(9) OJ C 288, 9.10.1999, p. 2.
(10) See footnote 3.

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L 108/17

the EC Treaty (11) and the compatibility of it with the
common market need not be further assessed by the
Commission in this decision. Consequently, aid to the
amount of EUR 39,244 million is being examined as ad
hoc aid in the present decision.
is pointed out,
however, that the existing aid of EUR 6,165 million will
also be taken into account in the assessment of the aid’s
proportionality under point 3.2.2(iii) of the guidelines.

It

(73)

In the initiation decision, the Commission provisionally
assessed the aid in the light of the original restructuring
plan. Germany subsequently submitted a modified
version of the restructuring plan, which must now be
taken into account
in order to assess the aid. The
Commission must therefore consider developments that
occurred after the aid was granted but before the date
when the modified plan was submitted, to the extent
necessary to assess the new plan.

(76) According to point 2.1 of

the guidelines,

typical
symptoms of a firm in difficulty are deteriorating
profitability or increasing losses, diminishing turnover,
declining cash flow and low net asset value. The
Commission notes that LTS has been loss-making since
its establishment in 1995 (13). The losses in 1998 were
EUR 8,3 million and in 1999, when the Commission
was informed of the present plan, the losses were EUR
4,652 million. Doppstadt
firm in difficulty,
therefore, and the aid for its restructuring is being
assessed under the guidelines.

is

a

5. Classification of the project as restructuring

(77)

the Commission expressed
In the initiation decision,
doubts about whether
the project was basically a
restructuring operation, since the restructuring measures
consisted mostly of investments.

4. Firm in difficulty

(78)

(74)

In general, a newly founded company cannot be
considered as a firm in difficulty. However, due to the
exceptional transformation process in the new L(cid:228)nder,
the Commission has agreed to apply the restructuring
guidelines in cases where companies are offered a new
chance (Auffangl(cid:246)sungen) (12), if it is not a question of
simply selling individual assets and the activity of the
the
insolvent
guidelines to such companies can be justified in the
light of the problems in the new L(cid:228)nder in general and
of the company in particular.

continued. Applying

company

is

(75) Doppstadt has its registered office in the new L(cid:228)nder. All
assets of the former LTS and GS which were necessary
for the production to be taken over were transferred to
it. The activities of
the former LTS and GS were
continued by Doppstadt. Consequently, Doppstadt
constitutes
and the
measures in favour of it can be regarded as restructuring
aid.

(cid:145)new opportunity(cid:146)

a genuine

(11) OJ L 83, 27.3.1999, p. 1.
(12) See the Commission’s approvals of 16 and 30 April 1997: State
aid N 874/96 and NN 139/96 in favour of UNION
Werkzeugmaschinen GmbH (letter D/3428, 2.5.1997); State aid N
892/96 in favour of FORON Haus- und K(cid:252)chentechnik GmbH
(letter D/4047, 28.5.1997). This approach is now confirmed by
point 7, footnote 10, of the Community Guidelines on State aid
for
(cid:145)The only
rule are any cases dealt with by the
exceptions of
Bundesanstalt
f(cid:252)r vereinigungsbedingte Sonderaufgaben in the
context of its privatisation remit and other similar cases in the
new L(cid:228)nder, involving companies emerging from a liquidation or a
take-over of assets occurring up to 31 December 1999(cid:146).

rescuing and restructuring firms

in difficulty:

this

therefore

restructuring plan has

the modified project as
The Commission notes that
communicated by Germany assumes a total reduction in
investment costs of EUR 9,515 million (14). This would
result in the investment costs being 50 % of the costs of
the restructuring measures. The share of investments in
the
considerably
decreased. In addition, Germany rightly claims that the
investments alone would not be sufficient to make the
firm profitable in the long term without
the work
processes also being reorganised and rationalised and
the product
range and distribution modernised, as
provided for in the restructuring plan. For these reasons,
the Commission considers that
the plan as a whole
fulfils the criteria of being a restructuring, and not just
an investment, project.

6. Restoration of viability

(79) According to point 3.2.2(i) of

the guidelines,

the
restructuring plan must restore the long-term viability of
the company within an appropriate period and on the
basis of realistic assumptions as to its future operating
conditions. The improvement of the company’s situation
and its return to viability must mainly result
from
internal measures contained in the restructuring plan

(13) Transformation of LandTechnik Schl(cid:252)ter GmbH into LandTechnik

Sch(cid:246)nebeck GmbH on 31 May 1995.

(14) The reduction in costs is due to the decision not to invest in a
company power station on account of the liberalisation of the
energy markets.

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30.4.2003

and may not be based only on external factors such as
price and demand increases, over which the company
has no great influence.

[(cid:133)] (*) Tracs in 2002 and [(cid:133)] (*) in 2003. At the end
of the restructuring period, sales of between [(cid:133)] (*) and
[(cid:133)] (*) units a year are envisaged.

(80)

In the initiation decision, the Commission expressed its
doubts about the ability of the restructuring plan to
ensure the long-term viability of the company, since the
to have any
investor, Mr Doppstadt, appeared not
previous experience in the field of carrier vehicles and
had limited financial
the
Commission noted that the market information in its
possession was not sufficient to enable it to conclude
whether the rather ambitious sales targets on which the
long-term viability of
the company was based were
realistic and plausible.

In addition,

resources.

(81) As regards the investor’s lack of experience, Germany
States that the family firm of Doppstadt, in which Mr
Doppstadt worked before becoming the manager of
Doppstadt GmbH, had 30 years of experience in the
manufacture of carrier vehicles. Moreover, due to the
technical problems encountered with the initial market
launch of the Trac, Germany has submitted a modified
restructuring plan according to which the management
has been exchanged and reinforced by external advisors
in order to ensure a successful modernisation of the
Trac-concept. Therefore a potential
lack of expertise
now appears do be adequately addressed. This is also
confirmed by the expert study submitted by Germany
which States that the initial technical shortcomings have
now been removed in the newly developed Trac.

(82)

(83)

the

available

viability of

the new plan,

information appear

Concerning
the
Commission notes that around [(cid:133)] (*) % of the turnover
is achieved with environmental-engineering products
(mainly sieve seed cleaners and verge mowers), which
according to the
to
perform successfully on the market. Both in the old and
the new plan, the sale of the Trac carrier vehicle forms
a considerable part of the turnover. The proportion of
total turnover accounted for by Tracs in the old plan
was
some [(cid:133)] (*) %, and in the new plan some
[(cid:133)] (*) %. Together with the sale of spare parts, Tracs
account for about [(cid:133)] (*) % of total anticipated turnover
in the new plan as well. The success of the product Trac
is essential, therefore, if the company is to break even
and hence to restoring long-term viability.

It is noted that the modified plan defers the return of
the company to viability by one year, compared with
the original plan. A profit is now expected in 2003
Initially the
instead of 2002 as originally anticipated.
increase
of
turnover will
environmental-engineering equipment. In 2002 the sales
following the market launch of the new Trac will lead
to a further increase. The new plan assumes sales of

from sales

come

in

(84) According to Germany, this increase in sales figures can
be achieved despite the general stagnation on the tractor
market, since the Trac is aimed at a niche where such
the proposed
sales appear feasible. As evidence that
sales figures are realistic, Germany has submitted a
market analysis that in particular assesses the prospects
for Doppstadt’s new Trac concept.

(85) According

to

the

this

that

information

the proposed sales

technical
shortcomings of the previous product have been solved
and the product is now competitive in technical terms.
in this market
The analysis of
the product segment
study States
are
figures
achievable with the new Trac, as there appears to be an
increasing demand for
is also
supported by the fact that the predecessor of the Trac
needs to be replaced and hitherto there has been no
similar all-purpose product on the market. Furthermore,
according to the most recent information, a partially
comparable product will be withdrawn from the market.
Accordingly, the market analysis submitted by Germany
concludes that sales figures of [(cid:133)] (*) to [(cid:133)] (*) Tracs
per year are achievable by the end of 2003.

this product. This

(86)

(87)

The extension of the restructuring period in the plan
appears sufficient for bringing the new product onto the
market. According to the latest information submitted
by Germany, the proposed sales figures for the Trac are
achievable. Even if the company should not fully meet
its targets, the break-even point may be deferred, but
the return to viability as such would not be jeopardised,
in the light of the latest information, the new
since,
product appears generally competitive. This seems to be
confirmed by the latest developments following the
market launch of the Trac.

Commission’s

The
to whether
doubts
restructuring plan can restore the viability of
company have thus been allayed.

as

the
the

7. Proportionality of the aid

(88) According to the guidelines,

aid should be
the
proportional
to the restructuring costs and benefits.
Point 3.2.2(iii) of the guidelines stipulates that the aid
must be limited to the strict minimum needed to enable

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Official Journal of the European Union

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restructuring to be undertaken and must be related to
the benefits anticipated from the Community’s point of
view. Aid beneficiaries will be expected to make a
significant contribution to the restructuring plan from
their own resources. No aid should go to finance new
investment not required for the restructuring.

(90)

(89)

the beneficiary had made

In the initiation decision, the Commission raised doubts
whether
significant
contribution to the restructuring from its own or
external commercial resources, since its contribution
appeared to amount to only 28 %.

a

letter

By
dated 21
September 2001, Germany
restructuring
communicated changes
to the original
plan. Part of the changes relate to changes in financing
of the restructuring and the amount of aid. Aid for
investments was significantly reduced, whereas aid for
some other restructuring costs was increased. However,
reduced by EUR 3,071 million
the total aid was
restructuring plan. The
compared with the original
financing of
to the
according
communicated changes would be the following:

restructuring

the

Costs

(EUR million)

Financing

BvS/Land

Investor

Workers

Investments

17,617

Approved schemes:

6,934

GA contribution and
investment premium

6,165

Grant from Saxony-Anhalt

12,079

Restructuring costs

17,367

Loss compensation

6,4

BvS

16,215

Working capital

18,352

BvS

4,28

14,095

Original production- relevant
assets

6,6

BvS

6,6

Contribution to personnel
costs

2,8

2,8

Total

69,26

45,409

21,03

2,8

= 66 % = 30 %

= 4 %

Note: table contains rounded figures.

(91) As regards the employees’ contribution of EUR 2,8
million to the restructuring, the Commission notes that
this amount is included in the restructuring costs, since
it is a genuine contribution to the total costs of the
is not considered as an
it
restructuring. However,
investor
constitutes neither
since
financing from the financial resources of the investor,
nor by the company Doppstadt GmbH (15).

contribution,

it

the table in recital 90, since Germany has corrected
the annual accounts and this amount will,
LTS’s
according to Germany, thereby be paid back to the BvS
from the proceeds of LTS’s
liquidation. Since the
amount has consequently not been waived by the BvS
in favour of the restructured company, it is not included
in the restructuring costs as aid to the restructuring.

(92)

The EUR 5,424 million given in the initiation decision
as restructuring costs is no longer taken into account in

(15) See Commission Decision 2002/186/EC in Zemag (OJ L 62,

5.3.2002, p. 44).

(93) As

regards

the doubts expressed in the initiation
decision concerning the amount of
investor’s
contribution to the restructuring, the Commission notes
amount
that
the
reduced
the EUR 5,424 million as a
non-consideration of

and

the

the

aid

of

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30.4.2003

this

restructuring cost and a restructuring aid result in an
In accordance with its
investor contribution of 30 %.
previous practice in eastern German restructuring aid
cases,
significant
contribution within the meaning of the guidelines (16)
in
the doubts whether
and therefore
proportion to the restructuring costs and benefits have
been allayed.

the aid is

considered

can

be

as

a

HAS ADOPTED THIS DECISION:

Article 1

The aid which Germany has
implemented for Doppstadt
GmbH, amounting to EUR 39,244 million, is compatible with
the common market within the meaning of Article 87(3) of
the EC Treaty.

Article 2

V. CONCLUSION

This Decision is addressed to the Federal Republic of Germany.

(94)

The Commission finds that Germany has unlawfully
implemented EUR 39,127 million in aid to Doppstadt
GmbH in breach of Article 88(3) of the Treaty. In view
of the above explanations, however,
the Commission
these measures are compatible with
concludes
Article 87(3)(c) of
the Treaty and hence with the
common market,

that

Done at Brussels, 27 November 2002.

For the Commission

Mario MONTI

Member of the Commission

(16) See the Decision of 9 June 1999 in Wismarer Propeller- und
Maschinenfabrik (NN 152/98) (OJ C 88, 25.3.2000, p. 3) and the
Decision of 26 June 2000 in Hydraulik Markranst(cid:228)dt GmbH (NN
48/98) (OJ C 62, 4.3.2000, p. 18).