CELEX: 31964D0651
Language: en
Date: 1964-10-28 00:00:00
Title: Commission Decision of 28 October 1964 on the abolition by the Kingdom of Belgium of the aid granted to Ford Tractor (Belgium) Ltd, Antwerp

42                                 Official Journal of the European Communities
  28 . 1 1 .64              OFFICIAL JOURNAL OF THE EUROPEAN COMMUNITIES                                        3257/64
                                               COMMISSION DECISION
                                                   of 28 October 1964
                on the abolition by the Kingdom of Belgium of the aid granted to Ford Tractor (Bel­
                                                  gium) Ltd, Antwerp1
                                     (Only the Dutch and French texts are authentic)
                                                      (64/65 1 /EEC)
 THE COMMISSION OF THE EUROPEAN                                  nating for several years ; whereas this situation is
 ECONOMIC COMMUNITY,                                             reflected in the following statistics :
 Having regard to the Treaty establishing the Euro­              - between 1959 and 1963 annual Community pro­
 pean Economic Community, and in particular the                     duction fell from 236 300 to 217 320 units;
 first subparagraph of Article 93 (2) thereof;                   - in France, after reaching 92 300 units in 1958, pro­
                                                                    duction fell to 68 590 in 1963 , and only 60 % of
 Having regard to the written and oral observations                 production capacity is being used at present;
 of Member States, and those of Ford Tractor (Bel­
gium) Ltd, Antwerp;                                              - in the Federal Republic of Germany production
                                                                    fell from 118 400 units in 1958 to 95 730 units in
                               I                                    1963 ; in the same period five German undertakings
                                                                    ceased producing agricultural tractors;
Whereas Ford Tractor (Belgium) Ltd, Antwerp, had
contracted a ten-year loan of a thousand million Bel­            - only in Italy, the Member State with the smallest
gian francs with a private credit institution and ob­               output, has production increased, rising in the
tained from the Belgian Government an interest                      same period from 25 600 to 53 000 units;
rebate of 3-5 % calculated in terms of a notional six­
year amortization period, the last annual redemption
payment being fixed at 700 million Belgian francs;                                          II
                                                                 Whereas the aid was granted by the Belgian State;
Whereas this aid was granted under the Law of 17                 whereas the interest rebate will, at the end of six
July 1959 establishing and coordinating measures to              years, amount to about 170 million Belgian francs;
encourage economic expansion and the creation of                 whereas it may carry a tax exemption the amount of
new industries; whereas it was granted in order to               which cannot be calculated at present;
assist in the conversion of the production programme
of the Ford Company in Antwerp, which will cease                 Whereas the aid granted threatens to distort competi­
completely to assemble cars and trucks and devote                tion between tractor manufacturers, in particular to
its activities in the future          .'                to       the detriment of those established in France and Ger­
assembling agricultural tractors and                             many whose production has been stationary or re­
and to the manufacture of gear boxes and rear-axles              gressive for several years; whereas its purpose is to
for agricultural tractors;                                       relieve the recipient company of part of the expendi­
                                                                 ture which it would normally have to bear for the
Whereas by virtue of the interest 'rebate granted to             installation and initial operation of a new production
it Ford Tractor (Belgium) Ltd, Antwerp, is entitled,             unit ;
under Article 8 of the Law of 17 July 1959, to exemp­
tion for five years from property tax on any build­              Whereas the abolition of all quotas and the progress
ings constructed under the conversion project;                   sive reduction of customs duties on tractors tend to
                                                                 make all manufacturers established in the Commu­
Whereas the production of agricultural tractors in               nity more sensitive to the effect of aid granted to any
the European Economic Community has been stag­                   one of them; whereas while the high-powered trac­
1 Certain passages of this Decision have been omitted
                                                                 tors which will be manufactured in Antwerp will not
   owing to the confidential information contained therein       satisfy the same demand as- low-powered tractors,
   relating to the undertaking concerned.                        both types are produced by most German and French
 ---pagebreak---                                    Official Journal of the European Communities                                    43
 manufacturers; whereas the interests of these manu­         Whereas production capacity in the common market
 facturers are liable to be prejudiced all the more if        for agricultural tractors is not lower than demand;
 the shift in demand towards high-powered tractors           whereas certain undertakings already established in
 expected by Ford Tractor (Belgium) Ltd, Antwerp,             the Community have a high degree of technical devel­
 is substantial and rapid;                                    opment; whereas in these circumstances aid , to en­
                                                              courage the creation of a new production unit is not
 Whereas until now there has been no tractor produc­         justified by the need to increase supplies or make
 tion in Belgium; whereas the aid granted will have           the sector more efficient by stimulating competition;
direct effects on competition between Ford Tractor           whereas the reason for giving aid for the installation
  (Belgium) Ltd, Antwerp, and undertakings estab­            in Antwerp of a factory for the manufacture of axles
lished in other Member States; whereas such aid will         and gear boxes for tractors and for the assembly of
 affect not only Belgian imports of tractors from Mem­       tractors cannot be the economic situation in the re­
ber States, which in 1962 amounted to 7 252 units,           gion of Antwerp which is prosperous compared with
 but also trade throughout the Community, because of         many other regions of the Community; whereas aid
the proposed high rate of production                   ;     can only aggravate the already difficult conditions for
                                                             Community tractor production;
Whereas the number of agricultural tractors it is
intended to manufacture in Antwerp is close to that          Whereas, therefore, although aid may contribute to
of the same type of tractor imported by the Ford             the development of agricultural tractor production,
Company into the Community it recent years, so that          and indeed to the development of the region of Ant­
the Ford Company would simply maintain its tradi­            werp, not only is application of Article 92 (3 ) (c)
tional share of the tractor market in the European           not desirable because aid is not in the common inter­
Economic Community without altering the balance              est, but it is out of the question because it interferes
of the market; whereas, however, even if such equi­          with trading conditions to an extent contrary to the
valence is achieved, there will still be distortion of       common interest ;
competition between the recipient company and the
other tractor manufacturers established in the Euro­         Whereas, consequently, the aid granted to Ford Trac­
pean Economic Community;                                     tor (Belgium) Ltd, Antwerp, is incompatible with the
                                                             common market and must therefore be abolished;
Whereas this is a measure which falls under Article
92 ( 1 );    .                                               Whereas the first subparagraph of Article 93 (2)
                                                             empowers the Commision to fix a time limit for such
Whereas the provisions of Article 92 (2) clearly do          abolition; whereas the Belgian Government should
not apply in this case;                                      be allowed to continue its aid for one year, if it con­
                                                             siders this necessary, to enable Ford Tractor (Bel­
Whereas the conditions required to enable the Com­           gium) Ltd, Antwerp, to meet its normal financial and
mission to envisage the application of the provisions        tax commitments,
of Article 92 (3) (a) and (b) are not met;
                                                             HAS ADOPTED THIS DECISION :
Whereas the standard of living in the region of Ant­
werp is not abnormally low; whereas, furthermore,                                    Article 1
on 31 December 1963 the unemployment figures for             The Kingdom of Belgium shall, not later than 3 1 Oc­
men and women of normal, partial or low employa­             tober 1965, take all necessary steps to abolish all
bility were respectively 3 068, 4 368 and 2 752 per­         forms of aid to Ford Tractor (Belgium) Ltd, Ant­
sons which represents 1-06 % , 1-51 % and 0-95 % of          werp, in application of the Law of 17 July 1959
employed persons in the region; whereas at the same          establishing and coordinating measures to encourage
time there were 1 306 unfilled vacancies ; whereas           economic expansion and the creation of new indus­
these figures do not represent serious underemploy­          tries .
ment, nor would there have, been such underemploy­
ment following the dismissal of 2 000 employees if                                   Article 2
the Ford Company in Antwerp had abandoned its                This Decision is addressed to the Kingdom of Bel­
conversion project and closed down;                          gium.
Whereas the Belgian economy is not affected by any           Done at Brussels, 28 October 1964.
serious disturbance; whereas neither the conversion
undertaken by the Ford Company in Antwerp nor                                  For the Commission
the manufacture of high-powered tractors are im­
portant projects of common European interest within                                 The President
the meaning of Article 92 (3) (b) ;                                            Walter HALLSTEIN