Thursday, 23 February 2017

Will there be state aid for Ford Bridgend?

Last year I floated the idea of Bridgend hosting the development of an electric power unit which Ford of all major motor manufacturers active in Europe lacked. Now it seems that UK state support may be offered to Peugeot-Citro├źn SA for such a development as part of an inducement to the French company to keep open the plants in England it is due to take over from General Motors. This would be on the same lines as those already on offer to such as Nissan.

Politicians and trade union leaders are urging the prime minister to make available whatever incentives she promised Nissan last autumn, when the Japanese manufacturer was persuaded to commit to making another new model at its Sunderland factory, despite concern about Britain leaving the European Union.

Whilst unpublished, those promises are believed to include regional support grants and technology and training funding that are within state-aid rules. Industry sources believe that Britain could create an electric car supply chain hub as Nissan has already led the way with production of the battery-powered Leaf and Jaguar Land Rover has committed to electrifying its fleet.

Outside the EU, UK would be free to offer state aid without so much as a slap on the wrist from Brussels. Both WTO and EFTA frown on discriminatory state aid, but neither seems to have the mechanism to punish states for this. However, these offers to manufacturers can hardly be endless. Would the Conservatives grant Ford equal treatment?

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