Fleet News

EC to investigate £10m Vauxhall grant

The European Commission is to investigate the £10 million grant to be given to Vauxhall by the Government for the development of the carmaker's Ellesmere Port plant, home of the next generation Vectra estate.

The Government announced the grant in August 2001 as regional aid for the retooling of the car plant from a single model production plant to two-model to allow it to produce Astra and Vectra.

The commission believes the money may exceed state aid limits.

A statement from the EC reads: “The information so far provided by the United Kingdom in this complex case was not sufficient to demonstrate that the planned aid is in line with the principles contained in the framework for aid to the motor industry, in particular as regards the proportionality of the aid.”

About 30 workers are expected to transfer to the north west factory when Vectra assembly finishes at Luton at the end of March, and training for the new model is already taking place at Russelsheim, the Opel factory designated as the main source of the new Vectra. General Motors is expecting Ellesmere Port to be producing 180,000 Astras and Vectras per year, starting from May or June.

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