2003/665/EC: Commission Decision of 13 May 2003 on the State aid which Belgium plans to grant to Volvo Cars NV in Gent  (Text with EEA relevance) (notified under document number C(2003) 1485)
Date: 2003-05-13
Institutions: European Commission
Subjects: Belgium, State aid, control of State aid, motor vehicle industry

L 235/24

EN

Official Journal of the European Union

23.9.2003

COMMISSION

COMMISSION DECISION

of 13 May 2003

on the State aid which Belgium plans to grant to Volvo Cars NV in Gent

(notified under document number C(2003) 1485)

(Only the French and Dutch texts are authentic)

(Text with EEA relevance)

(2003/665/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

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),

(5)

Whereas:

Volvo S60 and S 70 models. As of 2003, Volvo intends
to produce the new Volvo V40 and S40 models in the
to spend around EUR 27,58
plant. Volvo intends
million on training existing and 1 400 newly-employed
staff in the period 2002 to 2004.

eligible

The eligible training cost, taking into account that the
trainees' personnel costs may not exceed the total of the
other
to EUR 15 180 393.
According to Belgium, the eligible investment includes
elements
to
EUR 4 294 532. The general training cost amounts to
EUR 10 885 861.

costs, amounts

amounting

training

specific

of

PROCEDURE

(1)

(2)

(3)

The planned aid was notified to the Commission by
letter dated 15 May 2002. The Commission requested
further information by letters dated 25 June 2002 and
20 August 2002, to which Belgium replied on 23 July
2002 and 18 September 2002.

to Article 88(2) of

The Commission decided on 27 November 2002 to
initiate proceedings pursuant
the
Treaty (decision to open the formal investigation proce-
dure), as it had doubts as to the compatibility of the aid
with the
common market. Belgium submitted its
comments in response to the opening of proceedings by
letter dated 28 January 2003.

The Commission decision to initiate proceedings was
published in the Official Journal of the European Commu-
nities (2), with an invitation to interested parties to submit
their comments on the aid. However, no comments
from interested parties were received.

DETAILED DESCRIPTION OF THE AID

(4)

The beneficiary of the aid would be Volvo Cars NV,
which is located in Gent and is owned by Ford Motor
Company. The Volvo Gent plant currently assembles the

(1) OJ C 2, 7.1.2003, p. 2.
(2) See footnote 1.

(6)

to grant

Belgium proposes
training aid of around
EUR 6,51 million (net present value EUR 5,88 million)
over a period of three years, from 2003 to 2005. The
proposed aid is to be granted as ad hoc aid from the
Vlaamse Gemeenschap for specific training (approxi-
mately EUR 1,07 million) and general training (approxi-
mately EUR 5,44 million).

(7) With a view to the new investment in the plant, the
major departments at Volvo Cars — the welding plant,
the paint shop, the final assembly plant, the logistics
department and the engineering department — drew up
a project aimed at improving the skills both of new
employees and of employees already working for the
company. The training scheme can be divided into 11
training sub-units: knowledge of machines, knowledge
specific to posts or tasks, PC training (MS Office etc.),
technical knowledge (electricity, electronics, mechanics,
robotics etc.), quality (ISO, auditing, etc.), costs, mainte-
nance tools, improvement tools (six sigma, TPM, etc.),
safety, personal skills, environment.

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Official Journal of the European Union

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(8)

(9)

(10)

(11)

GROUNDS FOR INITIATING THE PROCEDURE

In its decision of 27 November 2002 to initiate proceed-
ings, the Commission expressed doubts about the way
interpreted the definition of
the Belgian authorities
general versus specific training. It could not be ruled out
that an excessively broad definition of general training
had been applied to the project.

The Commission considered that
simply because a
module includes a general training component does not
prevent
the chief aim of the module from being to
provide specific training. The Commission had too little
information on the precise content of certain training
modules to determine their general training character.
On the basis of the data submitted to the Commission it
was not possible to separate the specific from the
general training components within the eleven training
modules. The Commission needed more specific infor-
mation on the training modules providing general and
specific training. Information was also required on which
of the eleven training modules is recognised, certified or
validated by public authorities.

COMMENTS FROM BELGIUM

In its comments of 28 January 2003 on the initiation of
proceedings, Belgium provided detailed information on
each of the eleven training modules of the project. This
additional
information includes data on the content,
purpose, participants and length of the main individual
training courses. Belgium also clarified that training for
employees in the paint shop contains both general and
specific training. The specific training costs in this area
had not been taken into account as these data were not
available at the time of the notification.

In addition, Belgium provided documents from several
public training bodies (e.g. Katholieke Hogeschool Sint
Lieven, Hoger Technisch Instituut Sint Antonius, Edugo
Campus Glorieux), explicitly confirming the general
training character of a number of courses, in particular
with regard to the training modules ‘knowledge of
(electricity,
machines’
mechanics, robotics, etc.)’.

knowledge

‘technical

and

the Court of

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

Justice of

(13)

(14)

resources

The Commission notes that the notified training aid is
to an individual
granted through State
company and favours it by reducing the costs it would
normally have to bear for its employees to acquire new
skills through the notified training programme. More-
over, the aid recipient, Volvo Cars NV, is a company that
designs, manufactures and sells motor vehicles, which is
an economic activity involving trade between Member
States. The training aid in question is therefore covered
by Article 87(1) of the EC Treaty.

Commission Regulation (EC) No 68/2001 of 12 January
2001 on the application of Articles 87 and 88 of the EC
Treaty to training aid (1) (the Regulation), which applies
to training aid in all sectors, provides that aid fulfilling
all
the conditions is considered compatible with the
common market and is exempt from the notification
requirement of Article 88(3) EC, provided that
the
measure contains an express reference to the Regulation.

(15) Article 5 of the Regulation provides that the notification
requirement continues to apply if the amount of aid
granted to one enterprise for a single training project
exceeds EUR 1 million. The Commission notes that the
notified aid in this case amounts to approximately
EUR 6,51 million, that it is to be paid to one firm, and
that the training project is a single project. It also notes
that the notification relates to an individual aid measure
that is not granted under an approved scheme. It there-
fore considers that the notification requirement applies
to the proposed aid and, in accordance with the fourth
recital of the Regulation, that the notification must be
assessed by the Commission, in particular in the light of
the criteria set out in the Regulation.

(16) Under Article 3(1) of the Regulation,

individual aid is
compatible with the
common market within the
meaning of Article 87(3)(c) if it fulfils all of the condi-
tions of the Regulation.

ASSESSMENT OF THE AID

(12) 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,
affects trade between Member States, be incompatible

(17)

The Commission notes that
the distinction between
specific training and general training is drawn under
Article 4 of the Regulation. Specific training is defined in
Article 2 as training involving tuition directly and princi-
pally applicable to the employee's present or future posi-
tion in the assisted firm and providing qualifications
which are not, or only to a limited extent, transferable
to other firms or fields of work.

(1) OJ L 10, 13.1.2001, p. 20.

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Official Journal of the European Union

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(18) General training is defined in Article 2 as training invol-
ving tuition which is not solely or principally applicable
to the employees' present or future position in the
assisted firm, but which provides qualifications that are
largely transferable to other firms or fields of work and
thereby substantially improve the employability of the
employee. It is linked to the overall activities of the firm
and provides qualifications which are largely transferable
to other firms or to other fields of work. Training is
regarded as general if, for example, it is jointly organised
by different independent firms, or is available to the
employees of different firms, or if it is recognised, certi-
fied or validated by public authorities or bodies or insti-
tutions on which a Member State or the Community has
conferred the necessary powers.

(23)

(24)

(19)

Eligible costs in a plan to grant training aid are listed in
Article 4(7) of
the Regulation. As regards trainees'
personnel costs, Belgium confirmed that only the hours
during which trainees actually participate in the training
are taken into account. In accordance with Article 4(7)(f)
of the Regulation, these were the only costs taken into
account, up to the amount of the total of the other
eligible costs referred to in Article 4(7)(a) to (e). On the
the
the information provided by Belgium,
basis of
Commission notes that
the
the total eligible cost of
training programme amounts to EUR 15,18 million.

(20) Article 4(2) and (3) provides that training aid is compa-
tible with the common market if it complies with the
aid intensities set out therein, in relation to eligible costs.
The Regulation specifies that the maximum aid intensi-
ties that can be authorised for the project in question,
which is carried out by a large firm, are 25 % for specific
training and 50 % for general training.

(21)

(22)

In its decision to initiate proceedings, the Commission
expressed doubts concerning the Belgian authorities'
interpretation of the definition of general versus specific
training. It was possible that an overly broad definition
of general training had been applied to the project as the
Commission had too little information on the exact
content of certain courses to determine its general
training character.
Information was also required on
which of the eleven training modules was recognised,
certified or validated by the public authorities.

In its comments of 28 January 2003 on the initiation of
proceedings, Belgium provided detailed information on
each of
the eleven training modules. The additional
information includes data on the content, purpose, parti-
training
cipants and length of
courses. Belgium also clarified
for
employees in the paint shop contains both general and
specific training. The specific training costs in this area
had not been taken into account as these data were not
available at the time of the notification.

the main individual

training

that

The additional documents supplied to the Commission
enabled it to establish the general training character of
the courses containing both specific and general training.
The number of hours earmarked for general training
amounts to 455 756 (71,71 % of the total). The hours
to 179 762
earmarked for specific training amount
(28,29 % of the total). The training is relevant not only
to an employee's present or future position in the
assisted firm but provides qualifications which are
largely transferable to other firms or fields of work and
thereby substantially improve the employability of the
employee.

In addition, Belgium provided documents from several
public training bodies (e.g. Katholieke Hogeschool Sint
Lieven, Hoger Technisch Instituut Sint Antonius, Edugo
Campus Glorieux), explicitly confirming the general
training character of a number of courses, in particular
with regard to the training modules ‘knowledge of
machines’
(electricity,
mechanics, robotics, etc.)’.

knowledge

‘technical

and

(25) On the basis of the documents provided by Belgium, the
Commission concludes that the cost of general training
amounts
specific
to EUR 10 885 861 and that of
training to EUR 4 294 532. The applicable aid intensity
ceiling for specific training is 25 % of the eligible costs
and the applicable aid intensity ceiling for general
training is 50 % of eligible costs.

(26)

The eligible aid amounts to EUR 1 073 633 for specific
training (25 % of eligible costs) and to EUR 5 442 930
for general training (50 % of eligible costs). The total
allowable aid for the project is EUR 6 516 563 and will
be paid in three equal, yearly instalments during the
period 2003 to 2005.

(27) Under Article 6(2) of the Regulation, aid exempted by
the Regulation cannot be cumulated with other State aid
or with other Community funding in relation to the
same eligible costs if such cumulation results in an aid
intensity exceeding that fixed by the Regulation.

(28)

The Commission notes that
the Belgian authorities'
explanation that Volvo Cars Gent submitted an applica-
tion for aid totalling EUR 321 775 for training measures
under the European Social Fund (Objective 3, Priority 4).
In addition, 200 training vouchers (opleidingscheques)
with a total value of EUR 6 000 were purchased from
the Ministry of the Flemish Community for a total price
of EUR 3 000. Belgium has assured the Commission
that there will not in either case be any cumulation of
aid in relation to the same eligible costs that would
produce a higher aid intensity than that laid down in the
Regulation.

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Official Journal of the European Union

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(29)

In view of the above, the training aid amounting to a nominal EUR 6 516 563, to be paid in three
equal, yearly instalments in the period 2003 to 2005, is compatible with the common market
pursuant to Article 87(3)(c) of the EC Treaty,

CONCLUSION

HAS ADOPTED THIS DECISION:

Article 1

The State aid for training amounting to a nominal EUR 6 516 563 which Belgium plans to grant to Volvo
Cars NV to be paid in three equal, yearly instalments in the period 2003 to 2005, is compatible with the
common market within the meaning of Article 87 of the Treaty.

Article 2

This Decision is addressed to Belgium.

Done at Brussels, 13 May 2003.

For the Commission

Mario MONTI

Member of the Commission