2008/709/EC: Commission Decision of 11 March 2008 on the State aid which Belgium is planning to implement for Volvo Cars Gent (C 35/07 (ex N 256/07)) (notified under document number C(2008) 832) (Text with EEA relevance)
Date: 2008-03-11
Institutions: European Commission
Subjects: Belgium, State aid, aid to undertakings, control of State aid, investment aid, motor vehicle industry

3.9.2008

EN

Official Journal of the European Union

L 236/45

COMMISSION DECISION

of 11 March 2008

on the State aid which Belgium is planning to implement for Volvo Cars Gent (C 35/07
(ex N 256/07))

(notified under document number C(2008) 832)

(Only the Dutch and French versions are authentic)

(Text with EEA relevance)

(2008/709/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty
Community,
and in particular
Article 88(2) thereof,

establishing the European
subparagraph of
the

first

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 those provisions (1),

(5)

Whereas:

(1)

(2)

(3)

I. PROCEDURE

The planned training aid for the Volvo car assembly
plant in Ghent (Volvo Cars Gent, hereinafter VCG) was
notified to the Commission by letter dated 4 May 2007.
On 31 May 2007 a meeting was held with the
Commission services. Following this meeting, Belgium
information by letter dated 6 July
submitted additional
2007.

By letter dated 12 September 2007, the Commission
informed Belgium that
it had decided to initiate the
procedure laid down in Article 88(2) of the EC Treaty
in respect of the notified aid (the decision initiating the
procedure).

Journal

The decision initiating the procedure was published in
the European Union (2). The
the Official
Commission called on interested parties to submit their
comments. The Commission received no comments from
interested parties.

of

meeting was held between the Belgian authorities, the
beneficiary
and the Commission. Documents were
submitted to the Commission on that occasion. By
letter dated 23 November 2007, Belgium submitted addi­
information. The Commission requested clarifi­
tional
to which
cation by letter dated 21 December 2007,
Belgium replied by letters dated 8 January, 15 January
and 16 January 2008.

II. DESCRIPTION OF THE PROJECT AS NOTIFIED ON
4 MAY 2007

runs

2006

between

September

The beneficiary of the aid would be VCG. This firm has
been part of the Ford Motor Company (FMC) since 1999
and employs 5 000 people. The training programme
supported
and
September 2009 and is partially linked to the intro­
duction of a new production platform — the European
EUCD platform — which is the FMC standard for the
production of mid-size vehicles (segments C and D of the
car market). The introduction of this new platform will
represent tangible investment of EUR 26,3 million. It will
allow the plant to produce not only Volvo models, but
also Ford and Jaguar models. Improving the plant’s flex­
ibility in this way will contribute to anchoring Ford’s
activities in Ghent and safeguarding jobs there.

(6)

The notification of 4 May 2007 indicates that
the
training costs amount to around EUR 37 million. Since
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 (3) limits the eligible part of the
trainees’ salary costs to an amount equal to the sum of
the eligible costs notified by
the other eligible costs,
Belgium were limited to EUR 19 million. As Ghent is
in a non-assisted area, the maximum aid intensity is 50 %
specific training.
for general
training and 25 % for
According to the notification of 4 May 2007,
the
intends to grant EUR
Flemish Region (Vlaams Gewest)
6 018 558,91 as ad hoc aid.

(4)

Belgium reacted to the decision initiating the procedure
by letter dated 15 October 2007. On 23 October 2007 a

(7)

In the notification of 4 May 2007,
programme is divided into five parts,
being of limited size:

the
the last

training
two

(1) OJ C 265, 7.11.2007, p. 21.
(2) See footnote 1.

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

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Official Journal of the European Union

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— Part 1: reinforcement of the workforce (eligible costs
of EUR 4,3 million, of which EUR 3,1 million for
general training (4) and EUR 1,2 million for specific
training, and aid of EUR 1,8 million). This part aims
to ensure that VCG workers have sufficient basic
technical knowledge. The main topics covered are
pneumatics, robotics, programmable logic control,
electricity and electronics, cost management, social
skills, management techniques, bodywork, painting,
and car industry-specific software.

— Part 2:

training:

technical and technological

theo­
(eligible costs of EUR 1,7 million for
retical part
completely general
training, and aid of EUR 0,85
million). This part aims to deepen the knowledge
and skills of workers in certain technical and techno­
logical fields used in the platform. The main topics
robots,
covered
are
programmable
camera
measurement techniques.

and
control,

robotics
logic

production

and

— Part 3:

aims

implementation training: practical part
(eligible costs of EUR 12,9 million for completely
specific training, and aid of EUR 3,2 million). This
theoretical
to show how to apply
part
knowledge in the workers’ specific work environment
and production situation. The objective
to
maximise the skills that the workers need in order
to realise the full potential of the EUCD platform.

is

in

order

— Part 4: changes to be made in management and
training
attitudes
programme and the upgrade
to the EUCD in
general (eligible costs of EUR 0,2 million, completely
general training, and aid of EUR 0,1 million). This
part consists of management training.

to maximise

the

(9)

(10)

made possible through the aid. However, Belgium did not
provide any precise explanations underpinning these
assertions.

III. GROUNDS FOR INITIATING THE PROCEDURE

The Commission noted in the decision initiating the
procedure that the necessity of the aid is a general com­
patibility criterion. In particular, with regard to compati­
bility on the basis of Article 87(3)(c) of the EC Treaty,
the aid does not ‘facilitate’ the development of economic
activities if
the company would have undertaken the
assisted activities in any event, and even in the absence
of aid.

Regarding the training programme planned by VCG, the
incentive effect of the aid was questioned since, once
VCG has decided to introduce the EUCD platform, the
company must
inevitably take on board the training
costs in order to implement this business decision. In
the car industry, the introduction of a new production
platform is a regular feature necessary for increasing flex­
ibility and productivity and thereby maintaining compe­
titiveness. In order to operate a new platform efficiently,
the workforce has to be trained in the new techniques
and work methods to be adopted. The training costs
associated with the introduction of a new production
line are therefore normally incurred by car makers on
It is therefore
the sole basis of the market incentive.
highly probable that VCG would have undertaken some
of
these training activities anyway, even without aid.
Most competitors in the industry also seem to behave
in this way. Since the content of Parts 2, 3 and 5 of the
programme seems to be directly linked to implemen­
the new platform and seems necessary for
tation of
the Commission questioned Belgium’s
operating it,
claims
these parts would not be undertaken
that
without aid.

— Part 5: ANDON/DAISSY training (eligible costs of
EUR 0,02 million, completely general training, and
aid of EUR 0,01 million). This part
to
quality control.

relates

IV. COMMENTS FROM INTERESTED PARTIES

(11) No interested party submitted comments following the
publication of the decision initiating the procedure in the
Official Journal.

(8)

In the notification, Belgium indicates that the training
goes further than the immediate needs of
the firm.
Following requests by the Commission to clarify this
assertion, Belgium indicated by letter dated 6 July 2007
that Parts 1 and 4 of the training programme would be
carried out by VCG any event, even without aid. By
contrast, Parts 2, 3 and 5 cater for additional training

(12)

(4) Regulation (EC) No 68/2001 distinguishes between general training
(providing skills that are transferable to another sector or firm) and
specific training (providing skills that are mainly applicable to the
trainee's current position and are not transferable or are transferable
only to a limited extent). The aid intensity allowed is higher for
general training than for specific training (in this case 50 %, and
25 % respectively).

V. COMMENTS FROM BELGIUM

the

large

the facts.
of

Following initiation of the procedure, Belgium has consi­
It now
derably revised its presentation of
acknowledges
training
parts
that
programme would be undertaken in any event, even
without aid, as they are necessary for operating the
new platform. Nevertheless, it considers that some parts
of the programme have no connection to implemen­
tation of the new platform, whilst others are related to
it, but that the aid allows Volvo Cars Gent to train its
staff beyond what is strictly necessary for operating the
platform.

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Official Journal of the European Union

L 236/47

(13)

Belgium agrees to support only the expenditure for
which aid is necessary, and has therefore significantly
reduced the eligible costs to be financed.

this content have been developed by technical schools
and the VDAB (the Flemish employment agency).

(14)

The following table compares the eligible expenditure
given in the initial notification with the expenditure
that Belgium now intends to support.

(in million EUR)

Notification of 4 May
2007

After initiating the
procedure (1)

General
training

Specific
training

General
training

Specific
training

Part 1

Part 2

Part 3

Part 4

Part 5

Total

3,1

1,7

0,2

0,02

4,97

1,2

12,9

14,12

3,1

0,2

0,1

0,02

3,4

1,2

6,1

7,35

Aid amount

6,02

3,54

(1) Letter from the Belgian authorities dated 15 January 2008.

to strengthen employees’

(15) As regards Part 1, Belgium claims, as already indicated in
the notification of 4 May 2007, that its content is not
related to implementation of
the new production
platform and is therefore not necessary for operating it.
It consists of basic training covering general subjects and
aims
skills. According to
Belgium, this is clear from reading the course content.
Although the trade unions ask for this type of training
because it improves workers’ positions on the labour
the
market, VCG would not carry out
programme without aid for a number of
reasons.
Firstly, a great deal of this sort of training has been
the many
organised in recent years on account of
newcomers being taken on, but
the influx of new
workers has nearly dried up (5) and many of
the
existing workers have already received similar training.
Secondly,
the firm has observed that highly skilled
workers are prone to leave the firm. In particular, firms
located in the Ghent region that require similar skills
actively recruit VCG’s workers (6). Given its general
content, the training in question will therefore increase
the probability of workers leaving the firm once trained.
Lastly, the availability of these basic skills on the labour
market has increased since training programmes covering

this part of

(5) The workforce at VCG increased from 3 999 in 2002 to 5 299 in
2005. It decreased to 4 929 in 2006 and to around 4 800 in 2007.
(6) Workers leaving the firm go mainly to three firms located in the

region: Volvo Trucks, Arcelor and Eandis/Electrabel.

(16) As regards Part 2, Belgium claims, as already indicated in
the notification of 4 May 2007, that it covers technical
and technological subjects related to the new production
platform. It asserts that the majority of these training
hours are necessary to operate the new platform and
would therefore be undertaken in any case. However,
part of the courses goes beyond the level necessary for
operating the EUCD platform (7). To be more precise,
with the aid, VCG would provide more training hours
than necessary and would justify this from an economic
point of view in the absence of a grant. Belgium has
provided detailed information on the additional training
hours provided by VCG thanks to the aid (8).

training hours.

Flemish authorities, VCG agrees

(17) As regards Part 3, Belgium claims, as already indicated in
the notification of 4 May 2007, that the course content
is related in its entirety to the EUCD platform. In view of
the doubts raised in the decision initiating the procedure,
Belgium acknowledges that, to a large extent, the training
hours envisaged are necessary for operating the new
platform and would therefore be provided anyway,
it explains that, with the
even without aid. However,
to
aid from the
provide many more
Indeed, more
workers will be trained and some training courses that,
for reasons of rational cost management, would have
been reserved for experienced workers will be open to
newcomers. Training newly recruited workers requires
additional courses to be organised and the length and
content of other courses to be extended (9). In addition,
since newcomers have not yet shown their ability to
absorb such training, the chances of success are more
limited.
In the interests of rational cost management,
VCG would have provided this training only for more
experienced workers who had already attended similar
training. The duration and cost of the training could
thereby have been significantly reduced. Some modules
could have
dropped
completely.

been simplified

and others

(7) The necessary training has been determined on the basis of VCG's

usual practice in previous cases.

(8) For example, in the robotics course, 16 training hours are provided
for each participant. This amount of
time is necessary for the
workers to use the robots correctly and safely at the same efficiency
level as at present. Thanks to the aid granted by the Flemish auth­
orities, VCG has agreed to increase the number of training hours to
24 hours. This more extensive training increases the attractiveness of
the workers concerned on the labour market.

(9) As in all cases where a platform is introduced, a number of ‘key
workers’ must be sent to Volvo Sweden to learn all the details of the
platform so that they can later transfer this knowledge to other
workers at Volvo Cars Gent. Belgium claims that
the aid will
allow VCG to send more workers to Sweden than is strictly
necessary for operating the EUCD platform. In addition, the firm
will also send workers who have never participated in any key-
worker
than reserving training in Sweden to
workers with keyworker training.

training,

rather

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that

(18) As regards Part 4, Belgium claims, as already indicated in
the notification of 4 May 2007,
it concerns
management and attitude changes and is therefore very
general in nature. It indicates that a certain number of
training hours would be organised by VCG in any event,
even without aid, as they make a sufficient contribution
to increasing the flexibility and efficiency of the workers
and therefore make a major contribution to the lasting
success of the introduction of the EUCD platform (10).
However, the operational benefits that can be expected
from the remaining hours are not sufficient to justify
incurring the corresponding expenses, with the result
that
these remaining hours would therefore not be
offered without aid.

under Regulation (EC) No 68/2001 and must therefore
be assessed directly on the basis of Article 87(3)(c) of the
EC Treaty. Nevertheless,
it applies mutatis mutandis the
same guiding principles as those set out in Regulation
(EC) No 68/2001. In particular, this consists in verifying
that the Regulation’s other formal exemption are met.
However, the Commission is not obliged to limit itself
to mere verification of compliance with those criteria.

(24)

Belgium has not contested the above conclusions, which
are still applicable since the grant, even when reduced,
exceeds EUR 1 million.

(19) As regards Part 5, Belgium explains that

it concerns
learning new quality control techniques. These courses
are not necessary for operating the platform and other
production systems; they will be organised only if aid is
granted.

(25)

(20)

Following these changes, Belgium has formally informed
the Commission that since it agrees to support only
those training activities for which aid is necessary,
it
intends to grant only EUR 3,5 million instead of the
EUR 6 million originally notified.

VI. ASSESSMENT

Appraisal of the compatibility of the aid in the light of this
legal basis

In the decision initiating the procedure, the Commission
indicated that the notified aid seemed to comply with the
formal criteria laid down in Article 4 of Regulation (EC)
No 68/2001. No new element has been put forward that
could call
into question this initial assessment. The
Commission notes that this assessment is applicable to
the reduced aid since this aid is based on part of the
eligible expenditure notified on 4 May 2007 and deemed
acceptable in the decision initiating the procedure.
In
addition, Belgium has not modified the aid intensities,
namely 50 % for general training and 25 % for specific
training.

(21)

that,

following the decision
The Commission notes
substantially
initiating
the procedure, Belgium has
in its letter
changed its notification. More precisely,
it
dated 16 January 2008, Belgium confirmed that
training aid amounting to EUR
intended to grant
3 538 580,57 only,
instead of the EUR 6 018 558,91
envisaged in the notification of 4 May 2007. The
reduced amount of aid is based on the reduced level of
eligible expenditure described in Belgium’s letter dated
15 January 2008.
therefore this aid of EUR
3 538 580,57, based on the reduced level of eligible
expenditure,
the Commission will assess in the
that
present decision.

is

It

initiating

(26) As previously indicated, the only doubt raised in the
decision
the
the
necessity of the planned aid, and in particular of those
parts of the training programme that seem to be related
to the new investment (the EUCD production platform)
and seem indispensable for operating it.

concerned

procedure

(27)

The Commission notes that Belgium has accepted the
principle that only training activities that would not be
undertaken without aid can be supported.

Existence of aid

(22)

In the decision initiating the procedure, the Commission
came to the conclusion that a grant
to VCG would
constitute State aid within the meaning of Article 87(1)
of
the EC Treaty. Belgium has not contested this
conclusion.

(28)

Legal basis for the assessment

(23)

In the decision initiating the procedure, the Commission
indicated that aid exceeding EUR 1 million is not exempt

In order to comply with this principle, Belgium has made
a distinction between activities that would be undertaken
by VCG in any event because they are necessary for
operating the new platform and activities relating to
objectives ‘which market forces alone would not make
possible’ (11) because they go beyond what is necessary
and because the benefits that VCG would derive from
incurred. The
them do not outweigh the
Commission has analysed the explanations provided by
Belgium, which are summarised in paragraphs 15 to 19
In short, Belgium claims that
of the present decision.

costs

(10) As indicated by the Belgian authorities in their letter dated 7 July

2007.

(11) Regulation (EC) No 68/2001, recital 11.

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significant eligible expenditure in connection with Parts 1
and 3 of
the programme would not be undertaken
without aid. The Commission agrees that Part 1 is
clearly not related to the new platform. It is therefore
not necessary to operate the platform. Since these
training activities are rather general in nature and since
a combination of factors deters VCG from undertaking
them, the Commission considers that they would most
probably not be arranged without aid. As for Part 3,
Belgium has excluded training expenditure that, on the
basis of previous observations of similar investments, is
necessary for operating the new platform and has limited
the eligible expenditure to training activities that go
beyond what is strictly necessary.

(29)

organise

intend to grant any aid for
event,
in

The Commission therefore considers that Belgium has
correctly identified the training activities that would not
be carried out without state support. Since Belgium
intends to support only this type of activity and does
training that VCG
not
the Commission
would
concludes that,
in accordance with the objective laid
down in recital 10 to Regulation (EC) No 68/2001, the
aid ‘increases the pool of skilled workers from which
other
in accordance
with the condition laid down in Article 87(3)(c) of the
EC Treaty, constitutes aid ‘to facilitate the development of
certain economic activities or of certain economic areas’.

firms may draw’ and therefore,

any

VII. CONCLUSION

(30)

In view of the above, the Commission concludes that the
aid is compatible with the common market,

HAS ADOPTED THIS DECISION:

Article 1

The State aid that Belgium is planning to implement for Volvo
Cars Gent, amounting to EUR 3 538 580,57, is compatible with
the common market.

Implementation of the aid amounting to EUR 3 538 580,57 is
accordingly authorised.

Article 2

This Decision is addressed to the Kingdom of Belgium.

Done at Brussels, 11 March 2008.

For the Commission

Neelie KROES
Member of the Commission