EU Red Flags Spain’s Help For Ford

In America,  government bailouts of ailing car companies are (at least in some circles) viewed as an inalienable right. In the EU, government aid generally is forbidden by law. Ironically, Ford, the only un-bailed-out Detroit company, now is in collision with these quaint continental regulations. According to Reuters, " EU antitrust regulators will investigate whether a 25.2 million euros ($32.71 million) grant given by Spanish authorities to U.S. carmaker Ford Motor Co's van facility in Valencia breached EU state aid rules." Ford wants to produce the new Ford Transit Connect in Valencia, and the  Spanish government contributed a little to the cause that costs around $540 million. The rest is a bit technical. According to Reuters, "the European Commission said on Wednesday that a preliminary investigation showed that the project might exceed the authorized 5 percent increase in production capacity on a market in decline," but the Commission doubts data by the Spanish government and whether "the market concerned is in decline." The EU forbids bailouts not because they are seen as inherently evil, but rather because this is not a zero-sum game, and helping some would mean state-sponsored damage to others. from The Truth About Cars http://www.thetruthaboutcars.com

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