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No C 96 / 4 I EN I Official Journal of the European Communities 20 . 4 . 95

Observations must reach the Commission not later than 10 days following the date of this
publication . Observations can be sent by fax ( fax No ( 32 2 ) 296 43 01 ) or by post, under
reference number IV / M.566 — CLT / Disney / SuperRTL, to the following address :

Commission of the European Communities,
Directorate-General for Competition ( DG IV ),
Merger Task Force,
Avenue de Cortenberg 150 / Kortenberglaan 150,

B-1049 Brussels .

STATE AIDS

C 58 / 94 (N 541 / 94, N 582 / 94, N 604 / 94 and N 627 / 94 )

Germany

( 95 / C 96 / 05 )

( Text with EE A relevance )

( Articles 92 to 94 of the Treaty establishing the European Community )

Commission notice pursuant to Article 93 ( 2 ) of the EC Treaty to the other Member States and
other parties concerned regarding aid which Germany has decided to grant to Unternehmens ­
gruppe Muller / Loesch, FAG Kugelfischer AG, Steinbock Boss GmbH Fördertechnik and

Jungheinrich AG and INA Werk Schaeffler KG

By means of the letter reproduced below, the
Commission informed the German Government of its
decision to initiate the Article 93 ( 2 ) procedure .

I

' By letter dated 8 September 1994 the German
authorities notified the Commission of the Bavarian
authorities ' intention to grant DM 1 million to the
Unternehmensgruppe Muller / Loesch, manufacturer of
bearings and other products in the mechanical sector . By
letter dated 26 October 1994 the Commission put further
questions to the German authorities concerning this case
to which the German authorities replied on
22 November 1994 .

By letter dated 10 October 1994, the German authorities
notified the Commission of the Bavarian authorities '
intention to grant a soft loan to FAG Kugelfischer AG,
manufacturer of bearings and other products in the
mechanical sector .

By letter dated 17 October 1994, the German authorities
notified the Commission of the Bavarian authorities '
intention to grant a soft loan to Steinbock Boss GmbH
Fördertechnik and Jungheinrich AG, manufacturers of
lift trucks .

By letter dated 24 October 1994, the German authorities
notified the Commission of the Bavarian authorities '
intention to grant DM 1 million to INA Werk Schaeffler
KG, manufacturer of bearings .

The aid is granted under that pan of the " Bayernfonds "
which foresees aid for the financial consolidation of
companies under restructuring programmes in non-aided
areas . Since this part of the scheme has not been notified
to the Commission on the basis of Article 93 ( 3 ), every
application thereunder has to be notified individually .

II

The Unternehmensgruppe Müller / Loesch (N 541 / 94 )
and INA Werk Schaeffler KG (N 627 / 94 )

These two firms are taking over products from the
previously existing firm Georg Müller Nürnberg AG
( GMN ). GMN was a firm operating in the mechanical
sector . With five plants ( Ansbach, Dachsbach, Nürnberg ­
Neumeyerstraße, Nurnberg - Äußere Bayreuther Straße
and Werk Gunzenhausen ) it was specialized in the
production of :

— ball-bearings ( normal and high-precision ),

— spindles,

20 . 4 . 95 EN Official Journal of the European Communities No C 96 / 5

— freewheels and gaskets, Muller / Loesch will take 8 000 m 2 and 200 workers of
the original 24 500 m 2 and 1 048 workers existing in
— machine tools, Nürnberg-Außere Bayreuther Straße .

— automation and handling techniques .

The cost of take over of GMN products by Muller /

Following bad results in 1992 and 1993, the firm Loesch breaks down as follows :
received advice on cost-cutting measures, amongst
others, a reduction in personnel that would take the
work force from 1 690 employees at the beginning of
1992, to 1 000 at the end of 1993 . related acquisition to of the GMN products assets
taken over ( excluding
VAT ): DM

In September 1993 the company presented a composition
arrangement trying to prevent bankruptcy . An acceptable
solution could not be found and a petition in bankruptcy
was filed on 1 December 1993 .

After an unsuccessful attempt to find somebody that
would take over the company as a whole, only certain
parts of the production could find a prospective buyer,
namely those with good future prospects and that would
not be submitted to the extreme competitive conditions
of the original production programme .

The firm Paul Muller GmbH & Co . KG Unternehmens ­

beteiligungen ( Muller / Loesch ) was created in June 1994
in the framework of GMN 's restructuring process, with
a net worth of DM 5,05 million . This new firm, located
in Nurnberg ( Äußere Bayreuther Straße 230 and 350 )
will take over part of the production of the original

GMN .

From GMN 's original output, Muller / Loesch will take
over the production of high-precision ball-bearings,
spindles, freewheels and gaskets, reducing production to
50 % of that of GMN in its best years in the first two
products . Of GMN 's total turnover in 1992 and 1993,
those products taken over by Muller / Loesch corre ­
sponded to :

acquisition of leased assets
related to the products
taken over from the leasing
companies : DM

partial removal of the
production of ball-bearings
and machine spindles from
their current location in the

workshop to another part
of it, in the framework of
the transformation of the

workshop into an industrial
park : DM

acquisition of the part of
GMN 's administration

related to these products, in
particular those related to
data processing : DM

Total : DM 11,75 million

The State of Bavaria intends to grant Muller / Loesch

DM 1 million to cover the amount which has been
impossible to raise through external capital .

Nurnberg is not an area eligible for the granting of
regional aid .
spindles : 13,41 % ( DM 25,8 million ) of total 1992
turnover ( DM 192,3 million ) and 13,02 % ( DM 18,7
million ) of total 1993 turnover ( DM 143,6 million ),

high-precision ball-bearings, freewheels and gaskets :
10,86 % ( DM 20,9 million ) of total 1992 turnover
( DM 192,3 million ) and 13,44 % ( DM 19,3 million )
of total 1993 turnover ( DM 143,6 million ).

INA Werk Schaeffler KG ( Herzogenaurach ), a limited
partnership company, is one of the main manufacturers
of bearings in Europe, with a market share of 15 % in
the EC and 20 % in the German market . INA owns
companies in and outside Europe . INA 's turnover in

1993 was DM 578 million in Germany and a total of
DM 1 008 million in the whole of the EC .

No C 96 / 6 I EN I Official Journal of the European Communities 20 . 4 . 95

# In July 1994 INA took over GMN 's original normal ball FAG Kugelfischer AG (N 582 / 94 )

bearings production in Werk Gunzenhausen with 225
workers of the original 461 in the plant .

The firm FAG Kugelfischer AG, based in Schweinfurt

The restructuring measures to be implemented by INA
Werk Schaeffler KG in Werk Gunzenhausen are geared
towards making production more flexible, quicker and
cheaper .

The costs to be financed are the following :

— acquisition of GMN assets

relating to Werk Gunzen ­
hausen : DM . . .

( Bavaria ) is the result of the transformation of FAG
Kugelfischer Georg Schäfer KGaA in a public limited
company . FAG Kugelfischer AG is the parent company
of the FAG Kugelfischer group, which includes firms,
among other countries, in Germany, Austria, Italy,
Portugal, Brazil, Canada, Switzerland and the United
States of America .

FAG Kugelfischer AG is one of the biggest European
producers of bearings with a 16 % market share in the
EC and 23 % in the German market . Its turnover in

— costs of training and
consultancy advice : DM . . .

consultancy advice : DM . . . 1993 was DM 1 406 million in the bearings ' sector and

DM 291 million in the industrial techniques 's sector . The

— informatics ( hardware ): DM . . . parent company 's total turnover in 1992 was DM 2 287

million, in 1993 it was DM 1 744 million . As for the
— machinery removal ( external group, in 1992 it registered a total turnover of DM 3 563

costs ): DM . . . million, in 1993 it was DM 3 116 million .

— informatics ( hardware ): DM . . .

costs ): DM . . .

— fall in production due to

training of personnel,
restructuring of manufac ­
turing process and
machinery replacement : DM . . .

— costs related to social plan : DM . . .

Following a fall in its turnover in recent years, due to the
bad situation of the market and its main client, the auto ­
mobile industry, FAG Kugelfischer AG has tried to
reduce stocks, personnel costs and increase productivity .

Total : DM 23,55 million
A restructuring plan was devised by which the company
would concentrate in a series of products considered as

The State of Bavaria intends to grant INA Werk " fundamental " — namely bearings and those related to

Schaeffler KG DM 1 million . The notification stresses

sewing and conveyance techniques — and activities

the fact that INA would not have taken over Werk related to central data processing and services . The
Gunzenhausen without this proposal by the Bavarian company would withdraw its participation in companies
authorities . or part of companies not related to those areas .

Weißenburg-Gunzenhausen is an area where only SMEs

are eligible for regional aid .

In what refers to the rest of GMN 's original production :

— machine-tools : production will be taken over by the

firm Genauigkeitsmaschinenbau Nürnberg GmbH,
Nürnberg,

— automation and handling techniques : production will

be closed down .

Three of the original locations will be closed down,
namely Ansbach, Dachsbach and Nürnberg-Neymeyer ­
straße, and Genauigkeitsmaschinenbau Nürnberg will
take another 1 200 m 2 and eight workers from GMN 's
plant in Nürnberg - Äußere Bayreuther Straße .

Of the original 16 257 employed in the parent company
in December 1992, only 7 458 were still employed by
December 1993 and a further reduction of 328 is
envisaged for 1994 . In regard to the group, 30 847 were
employed in December 1992 ; by December 1993 it had
been reduced to 16 164, and a further reduction of 453 is
foreseen for 1994 . According to the notification, these
reductions have been achieved through the sale of
companies / participation in companies .

Given the important debt ratio of the company and the
pressure exercised by the restructuring measures on the
cash ratio, it was decided by the banking pool that the
money obtained from the selling of those participations
would go towards the financing of the debts, thus
enabling the company to obtain further short-term
credit .

20 . 4 . 95 I EN I Official Journal of the European Communities No C 96 / 7

Obtaining resources in the capital market through an
augmentation of the company 's net worth has been
rejected, given the insufficient strength of the internal
financial situation of the company . This leaves external
financing as the only option .

The measures to be financed are the following :

augmentation of stocks
necessary to face require ­
ments due to the increase of

turnover : DM

increase of receivables
necessary to face require ­
ments due to the increase of

turnover : DM

investment in fixed assets

including restructuring
expenditure : DM

Total : DM 150 million

Of this total, DM 50 million are self-financed . The
remaining DM 100 million would be financed by the
banks ( 50 % ), through extra credits and the Bavarian
authorities ( 50 % ).

The aid proposed by the Bavarian authorities would take
the form of a soft loan, amounting to DM 50 million
( about ECU 26 million ), to be given under the following

terms :

— DM 20 million through a 12-year credit with 5 ° / o

nominal interest rate and a period of grace for reim ­
bursement of two years,

— DM 30 million through a four-year credit with 5 ° / o

nominal interest rate and a period of grace for reim ­
bursement of two years .

The soft loan is equivalent to a subsidy of about DM

5,16 million ( ECU 2,68 million ).

Schweinfurt is a region eligible for aid under the
regional aid scheme (" Gemeinschaftsaufgabe ") ; 10 ° / o of
intensity of aid ( gross ) is eligible in the case of
productive investment .

Steinbock Boss GmbH of Moosburg ( Bavaria ), firm
which was close to bankruptcy .

The recession and the increased difficulties which the

Lancer Boss group incurred, reputedly because of unsuc ­
cessful investments in Spain, France and Italy, worsened
their financial position .

The group finally went into receivership in April 1994,
following the withdrawal of banking facilities from the
German Steinbock Boss GmbH . Given the close links
between both companies ( by then the factories in Bavaria
and Leighton Buzzard were supplying each other with
parts and manufactured complementary vehicles, with
Steinbock Boss mainly producing electric-powered
vehicles and Leighton Buzzard combustion-engined
ones ), the group had to call in the receivers .

Jungheinrich AG is the parent company of the
Jungheinrich group . After the German Linde group,
Jungheinrich is Europe 's second largest manufacturer of

fork lift trucks, with a 20 % market share . The group
owns firms in most EU countries, plus Sweden, Norway,
Austria, Switzerland, United States of America,
Hungary, the Czech Republic, etc . In 1992 its sales in
the industrial trucks area amounted to DM 1 320 million
from total group sales of DM 1 609 million .

Jungheinrich AG bought Steinbock Boss GmbH
( Moosburg ) through Steinbock Boss GmbH Forder ­
technik, newly created in April 1994 . This new company
is owned 100 % by Jungheinrich Beteiligungs GmbH,
which also belongs to Jungheinrich AG .

Shortly after, Jungheinrich AG also acquired Lancer
Boss . The purchase did not include Lancer Boss 's plant
in Montcada ( Spain ) or its French and Italian
distribution companies .

1993 production in the Lancer Boss group was the
following :

( a ) Electric-powered vehicles ( in units ):

— Montcada ( Spain ): . . .

— Moosburg ( Germany ): . . .

— Leighton Buzzard ( United Kingdom ) : . . .

Total ( group ): 14 820

( b ) Pedestrian pallet trucks ( in units ):

— Montcada ( Spain ): —

# Steinbock Boss GmbH Fördertechnik / Jungheinrich AG — Moosburg ( Germany ): . . .

(N 604 / 94 )

— Leighton Buzzard ( United Kingdom ) : —

In 1983 the Lancer Boss group, producer of lift trucks
based in Leighton Buzzard ( United Kingdom ) bought Total ( group ) 36 000

No C 96 / 8 I EN I Official Journal of the European Communities 20 . 4 . 95

1993 production in the Jungheinrich group was the
following :

( a ) Electric-powered vehicles ( in units ):

— MIC ( France ): . . .

— Wandsbek-Hamburg ( Germany ): . . .

— Norderstedt-Hamburg ( Germany ): . . .

The Bavarian authorities plan to give Steinbock Boss

GmbH Fordertechnik and Jungheinrich AG a soft loan
of DM 30 million ( about ECU 15,6 million ) under the
following conditions :

— DM 20 million through a four-year credit with 5 %

nominal interest rate and a period of grace for rein ­
bursement of two years,

— DM 10 million through a 12-year credit with 5 %
Total ( group ) 28 792 nominal interest rate and a period of grace for reim ­

bursement of two years .

( b ) Pedestrian pallet trucks ( in units ):

— MIC ( France ): . . . The soft loan is equivalent to a subsidy of about DM
2,96 million ( ECU 1,54 million ).

— —
Wandsbek-Hamburg ( Germany ):

— Norderstedt-Hamburg ( Germany ): — Moosburg is only eligible for regional aid in relation to
SMEs .

Total ( group ) 130 000

After its acquisition of Lancer Boss and Steinbock Boss

GmbH, Jungheinrich AG plans the following changes in
production :

— Jungheinrich 's plant in " Wandsbek ( Hamburg ) which

currently produces electric-powered vehicles will be
closed down .

— Production of pedestrian pallet trucks in Moosburg

(. . .) will be discontinued from the beginning of

1995, concentrating all production of this type of
truck in the MIC plant in Argentan ( France ). The
current output in this plant (. . .) will not be
increased .

— Current production of diesel trucks in Moosburg will

be shifted to the Leighton Buzzard plant in the
United Kingdom, and the Moosburg plant will
concentrate on the production of electric-powered
vehicles, reducing the output of 1993 (. . . units )

to . . .

— The number of electric-powered units currently
produced in Norderstedt ( Hamburg ) will increase
to . . ., and according to the notification, Leighton
Buzzard will continue to produce the same amount
of units of this type of vehicle as before ( i.e. . . .).

The acquisition of Steinbock Boss GmbH assets by
Jungheinrich AG came to a total of DM . . . million
( DM . . . million for the assets and DM . . . million for
equipment, stocks and industrial and intellectual
property rights ). An extra ... to DM . . . million will be
spent between 1994 and 1996 in reorganization,
investment and training . This would bring the total
investment to 118,2 to DM 122,2 million .

III

According to data available to the Commission, the
bearings market is a market with overcapacity . This is
particularly true of the market segment for basic ball ­
bearings .

The bearings industry is currently suffering from the
effects of weak global economies, in common with many
other capital-intensive manufacturing industries . But it
also showed below average returns throughout the last
economic cycle, dud to poor returns which in time did
not generate sufficient cash flow to meet the demands of
expansion in the markets .

Another problem comes from the fact that the market
has traditionally lacked a price leader which has allowed
customers to exert a strong pricing pressure .

Customers are industries, which means that demand has
depended largely on investments made by those
industries . After a period of investments in the second
half of the 1980s both EC and foreign demand has fallen
as a result of disappointing growth rates on the down ­
stream markets within and outside the EC .

In what regards the German market, it is with its
dominant automotive and machinery industries the
largest market in Europe for bearings . Germany accounts
for 53 % of total EC production, and in 1992, the
German production was 48 % of the total European
demand .

20 . 4 . 95 lENl Official Journal of the European Communities No C 96 / 9

Market shares are fairly well delineated with FAG and
the Swedish firm SKF ( through SKF GmbH
Schweinfurt ) consistently controlling half of the market
between them . In relation to the EC and world markets,
SKF is the first producer in both, with FAG in second
and fourth position respectively . INA is the third
producer in importance in Germany and the EC, and the
eight at world level .

Given that the EC only accounts for 10 % of the world 's
total textile production, Community producers are
strongly dependent of the external demand . This explains
why exports account for more than 60 % of total
production .

The majority of the sewing machines produced is
destined for industrialized countries . Germany sells
nearly three-quarters of its production to those and the
MARKET SHARE-% ( 1993 ) remaining one-quarter to developing countries .

SKF

35 %

25 %

INA

15 %

20 %

FAG

16 %

23 %

EC 12

Germany

Market Volume

( DM million )

7 000

3 200

It is thought that in the short run EC demand will
continue to decline . Production will also decline further,
since the short-term prospects for the export markets are
dim . But in the medium term the economies of the major
Western industrialized countries are expected to recover .

The industrial trucks sector also presents overcapacity,
up to 40 % according to the notification .

The EC is the world 's largest producer of machinery for
mining, metallurgy, construction, lifting and handling .
Germany is the largest producer in the Community with
42 % of total EC production .

Products in this sector are essentially equipment goods,
where demand depends greatly on investment decisions
taken by the industries which are the main clients

( essentially automobile, construction, transports and
storage ).

Although this makes for a fluctuating demand, profits

have remained relatively stable . This can be explained by
the fact that clients are prepared to pay more for high ­
quality products, should they help the buyer to become
more efficient .

Perspectives in the short run are not very encouraging ;
demand should remain weak within and outside the EC .

The situation should slowly improve in the coming years .

The EC is the world 's largest producer of textile
machinery . Germany is the largest producer in the
Community with 63 % of total EC production .

Germany and Japan account for nearly 50 % of the
world 's trade in sewing machines . EC production
augmented in 1992, through an increase in exports even
though demand within the EC fell .

It is thought that competition will increase in the future,
within and outside the EC . Community producers will
have to rationalize production and develop high-quality
specialized products . The situation should slowly
improve .

IV

The aid proposed by the Bavarian authorities should be
considered an aid which could distort or threaten to
distort competition in the sense of Article 92 ( 1 ) of the
EC Treaty and Article 61 ( 1 ) of the EEA Agreement .
The aid is given to the firms Miiller / Loesch and INA
Werk Schaeffler KG in the form of grants and to FAG
Kugelfischer AG and Steinbock Boss GmbH Forder ­
technik / Jungheinrich AG in the form of soft loans,
intented to make financial resources available to these
companies at cheaper conditions than those offered by
the market .

The aid proposed is done so on the grounds of it being

an aid for the restructuring of these companies . Aid of
this sort will by its very nature tend to distort
competition and affect trade between the Member States
as it retards the process of structural adjustment through
subsidies to firms which in the new market situation
ought to disappear or restructure .

Aid for acquiring assets can only be considered
compatible with the common market if one of the
following two conditions is met :

No C 96 / 10 EN Official Journal of the European Communities 20 . 4 . 95

— the aid is granted in an assisted area under a regional

aid scheme approved by the Commision,

— the acquisition is an element of a larger restruc ­

turation process and the aid meets the criteria set by
the Commission for restructuring aid .

Restructuring aid is viewed with a strict approach since it
could shift an unfair share of the burden of structural
adjustment and the attendant social and industrial
problems on the other producers who are managing
without aid and to the other Member States .

Restructuring aid should be part of a feasible, coherent
and far-reaching plan to restore a firm 's long-term
viability, which should fulfil the following conditions :

— restoration of viability,

production . As it has already been pointed out, Jung ­
heinrich AG is Europe 's second largest manufacturer of
fork lift trucks .

At this stage the Commission has doubts as to whether
the proposed measures should be considered as restruc ­
turing aid and not as operating aid . Indeed, its seems
that none of the beneficiaries is an enterprise in difficulty
and it is therefore questionable whether the aid received
is necessary for their restructuring ( 1 ). Moreover, even if
the aid were to be considered as restructuring aid, the
Commission, on the basis of the information presently
available to it and given the situation in the relevant
markets, is not i a position to assess whether the benefi ­
ciaries make a contribution proportionate to the aid
received by reducing or closing capacity and whether the
proposed measures fulfil all other conditions listed
above, which the Commission attaches to the approval of
a restructuring aid in general .

Aid to Muller / Loesch (N 541 / 94 ) and INA Werk
— avoidance of undue distortions of competition Schaeffler KG (N 627 / 94 )
through the aid — where there is an excess of
production capacity in a relevant market in the EU
served by the recipient of the aid, the plan should GMN suffered from financial problems which in turn
make a contribution proportionate to the aid received have meant that the company has gone into bankruptcy .
by reducing or closing capacity, Customers are industries, which means that demand

served by the recipient of the aid, the plan should GMN suffered from financial problems which in turn
make a contribution proportionate to the aid received have meant that the company has gone into bankruptcy .
by reducing or closing capacity, Customers are industries, which means that demand

depended largely on investments made by those
industries . After a period of investments in the second
— significant financial contribution of the beneficiary to half as a of result the 1980s of disappointing both EC and growth foreign rates demand on the has down fallen ­

the programme, stream markets within and outside the EC .

the programme,

— the aid should be in proportion to the restructuring

costs and benefits — the intensity and amount of the
aid should be the strict minimum necessary,

From GMN 's different products, only those with better
future perspectives are being taken over by the other
firms .

— monitoring of full implementation of the plan and,

— monitoring, Muller / Loesch takes over products which are for the

where applicable, observance of conditions . most part customer-oriented and based on special

known-how ; its clients are companies which use these
products as tailor-made components for their own
As it has been said Germany is not only the largest output . There is a close relationship between these clients
market in Europe for bearings, but it also accounts for and the producer .
53 % of total EC production . FAG Kugelfischer AG and
INA Werk Schaeffler KG are amongst the main manu ­
facturers of bearings in the EC . FAG Kugelfischer AG 's In 1994 Muller / Loesch plans to reduce production in
export shares were 48 % in 1992 and 49 % in 1993, the relation to GMN 's previous output increasing it in the
estimate for 1994 being 50 % . In the case of INA Werk following years :
Schaeffler KG, export share in 1993 was 40 % ( of which
20 % within the EC ).

where applicable, observance of conditions .

In 1994 Muller / Loesch plans to reduce production in
relation to GMN 's previous output increasing it in the
following years :

(*) See the Judgment of the Court of Justice of 17 September

The same can be said of the industrial trucks sector . 1980 in Case 730 / 79 — Philip Morris v. Commission ( 1980 )

Germany 's production accounts for 42 ° / o of total EC ECR, p. 2671 .

Germany 's production accounts for 42 ° / o of total EC

20 . 4 . 95 PEN Official Journal of the European Communities No C 96 / 11

comes to a total of 21,68 % in the pallet trucks sector
TURNOVER ( DM million ) — figures for 1994 to 1996 are planned and 12,9 % in the electric-powered vehicles sector, the
main argument in the latter being the reduction of the
. . . units produced in the plant in Montcada ( Spain )
1993 1994 1995 1996 which was not taken over by Jungheinrich AG .

high-precision ball-bearings 12,7

spindles 18,7

# freewheels 5,5 ... ... . . . gaskets 1,1 ... ... . . .

In relation to INA, and given that one of GMN 's funda ­
mental problems was the cost and lack of flexibility of
the production system, it plans to restructure it through
the setting up of a new manufacturing system thus
reducing costs and making production faster and more
flexible . GMN 's deep-grove ball-bearings which have
been taken over by INA had a good reputation for their
quality . The notification argues that INA 's planned EC
turnover in 1994 will be DM 1 600 million, of which
only 65 to 72 million would come from production
related to GMN 's former products . Reductions
mentioned are taking the number of employees in Werk
Gunzenhausen from 380 to 225 . There is no other

reduction in capacity mentioned .

In the absence of any information in the notification
about whether the Montcada plant has continued
producing after Jungheinrich AG took over Steinbock
Boss GmbH 's other plants, it is not possible to assess the
full extent of the overall capacity cuts which have taken
place . If the . . . units which were produced in Spain are
not taken into account when calculating 1993
production, the reduction in capacity would only be

1,66 %, not 12,9 % as claimed . Given the position that
Jungheinrich AG has in the market, there seems to be

insufficient compensation to competitors for the
distortion produced by the aid .

Except in the case of Schweinfurt, the areas concerned
are not eligible for regional aid or only eligible for aid to
SMEs . In the case of Schweinfurt, it is a region eligible
for aid under the " Gemeinschaftsaufgabe " regional
scheme ; with the information currently available, it is not
clear whether the aid given to FAG Kugelfischer AG
could be given on this basis or what the intensity of the
aid will be .

Given the situation of overcapacity in the market, it is
doubtful whether there is a contribution by the benefi ­
ciaries, in the form of reduction or closure of capacity, Therefore, since these companies belong to the main
which could be considered proportionate to the aid European producers in their sectors, given the fact the
proposed . relevant markets suffer from overcapacity and that the

Bavarian authorities seem to be promoting production in
the bearing 's sector, it is now deemed appropriate to
open the procedure pursuant to Article 93 ( 2 ) of the EC
Treaty .
Aid to FAG Kugelfischer AG (N 582 / 94 )

Restructuring is mainly achieved through concentrating V
on a few production areas . A reduction in capacity is
achieved through the sale of its participation in
companies or part of companies not associated to those

Accordingly, the

activities retained . The only company which has been German government that it
closed down is DKFL Deutsche Kugellagerfabriken, an

Article 93 ( 2 ) procedure in

East-German company bought by FAG Kugelfischer AG the Bavarian authorities to :
in 1990 and that by 1992 had acquired losses of DM 365
million . There does not seem to be a sufficient

counterpart to the aid .

Accordingly, the Commission hereby informs the
German government that it has decided to initiate the
Article 93 ( 2 ) procedure in relation to the intention by
the Bavarian authorities to :

— grant DM 1 million to the Unternehmensgruppe
Miiller / Loesch,

# Aid to Steinbock Boss GmbH Fördertechnik / Jung ­

heinrich AG (N 604 / 94 )

According to the notification, there is a reduction in

capacity through the different measures taken which

— grant a soft loan of DM 50 million to FAG Kugel ­

fischer AG,

— grant a soft loan of DM 30 million to Steinbock Boss

GmbH Fördertechnik and Jungheinrich AG,

No C 96 / 12 [ ENl Official Journal of the European Communities 20 . 4 . 95

— grant DM 1 million to INA Werk Schaeffler KG .

As part of the procedure, your authorities are hereby

invited to present, within one month of being notified of
this letter, their comments as well as any other
information they might consider relevant for the
assessment of the aid proposed .

The Commission would remind you of the suspensory
effect of Article 93 ( 3 ) of the EC Treaty and would draw
your attention to the communication published in the

Official Journal of the European Communities (*) in which
it was stipulated that any aid granted unlawfully, i.e.
without prior notification or without awaiting the
Commission 's final decision under the procedure
provided for in Article 93 ( 2 ) of the Treaty, may have to
be recovered from the recipient firm .

The Commission hereby requests the German authorities
to inform the recipient firms, the Unternehmensgruppe
Miiller / Loesch, FAG Kugelfischer AG, Steinbock Boss
GmbH Fôrdertechnik, and Jungheinrich AG and INA
Werk Schaeffler KG, without delay of the initiation of
the procedure and of the fact that they might have to
repay any aid improperly received .

The Commission also hereby informs the German
Government that it will inform :

— other Member States and other interested parties

within the EU by means of the publication in the

Official Journal of the European Communities of a
copy of the present letter,

— other interested parties in the EFTA countries that

are signatories to the EEA Agreement by publishing a
notice in the EEA Section of the Official Journal of

the European Communities, and

— the EFTA Surveillance Authority by sending the

English version of this letter .'

The Commission hereby gives the other Member States
and other parties concerned notice to submit their
comments on the measures in question within one month
of the date of publication of this notice to :

Commission of the European Communities,
Rue de la Loi / Wetstraat 200,
B - 1 049 Brussels .

The comments will be communicated to the German

0 ) OJ No C 318, 24 . 11 . 1983, p . 3 . Government .