European boss hits out at government subsidies for Opel, Vauxhall, Peugeot and Citroen
22 May 2009

Ford's European arm has hit out at government subsidies to rival car firms, saying they are leaving it at a competitive disadvantage.

Speaking in response to Germany's 1.5 billion Euro (£1.3bn) government-backed bridge financing for General Motors' Opel arm, and the French government's 6.8 billion Euro (£6bn) loans to PSA Peugeot Citroën and Renault, Ford's European boss John Fleming said he was "very concerned".

Fleming has urged the European Union to "maintain proper oversight" of the growing number of national and pan-European aid plans for the car industry.

While Ford is not reported to be opposed to aid packages for car makers, it wants the funds to be made available to all car makers on equal terms. In the US, for instance, Ford has been offered loan assistance from the government in the same way as GM and Chrysler, but has chosen not to draw on it.

"Given this background of an apparent current lack of enforcement of EU state aid and internal market rules, it is imperative that any bridging loans that might be provided by the German government for Opel do not breach EU state aid or competition policy," Fleming told the Financial Times newspaper.

Ford's complaint highlights the growing competitive tensions over car maker bail-outs around Europe.

It comes as GM and the German government study offers from Fiat, Magna and RHJ International for a strategic stake in Opel/Vauxhall, which it plans to spin off with the help of 3.3 billion euros (£2.9bn) of loan guarantees from Germany, the UK and other governments of countries where it has plants.

German officials this week lined up 1.5 billion euros (£1.3bn) of bridge loans to keep Opel afloat through a sale process expected to take several months.

EU commissioners have previously warned that any support by national governments to GM Europe would have to meet EU state aid and internal market rules.

Fleming added: "Ford believes it is vital that a level playing field is enforced to ensure a fair and equitable distribution of any assistance being offered, and that competition is not distorted."

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