Of the EC Treaty Concerning the Aid/Measure C 5/99 (Ex N 728/97) Italy Fiat Mirafiori Carrozzeria (1999/C 120/05)
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C 120/12EN Official Journal of the European Communities 1.5.1999 STATE AID Invitation to submit comments pursuant to Article 93(2) of the EC Treaty concerning the aid/measure C 5/99 (ex N 728/97) Italy Fiat Mirafiori Carrozzeria (1999/C 120/05) (Text with EEA relevance) By the letter reproduced below, dated 9 March 1999, the The investment Fiat Auto plans to make is in its Mirafiori plant Commission notified Italy that it had decided to initiate the (Turin), which is in an assisted region under Article 92(3)(c) procedure under Article 93(2) of the EC Treaty. and has a regional maximum intensity of 10 % nge for large firms. On 28 October 1997 the Italian Government notified a plan to According to the information supplied by the Italian auth- grant State aid to Fiat Auto SpA for investment in its Mirafiori orities, Mirafiori Carrozzeria manufactures several types of plant (Turin, Piedmont) where it manufactures motor vehicles. vehicle (in 1994, when the project started, it was producing The aid was registered as notified aid No N 728/97 on the Uno, Thema, Croma, Panda and Punto) in 1999/2000, 29 October 1997. when the project ends, it will be producing the Punto/Model 188 (2), Marea and Multipla). The plan originally notified was essentially aimed at improving plant management and organi- sation with a view to the production of the new vehicles (Marea, Model 188 and Multipla). The urban location of the By letter of 24 November 1997 the Commission asked the plant imposes major constraints on production and logistics. Italian authorities to send further information. Three The investment is also designed to improve working reminders, which also referred to the possibility of Article conditions, energy savings and environmental protection. It 93(2) proceedings being initiated, were sent to the Italian auth- will also safeguard a number of jobs in an area experiencing orities on 16 February 1998, 8 June 1998 and 10 July 1998, industrial decline. urging them to send the necessary information. A meeting was also held on 23 April 1998 with the representatives of the Italian authorities to discuss the methods by which the case would be examined. Having requested extensions of the deadline for a reply, your Government provided fresh The notification of 28 October 1997 contains the following information, which unfortunately was still inadequate, by investment details for 1994 to 2000: letter of 20 November 1998. To allow the Commission to carry out a more detailed investigation, your authorities in turn agreed to an extension of the usual period for assessment to 15 February 1999. (in ITL million) Description Amount Planning and supervision of work 860 The recipient of the aid would be Fiat Auto SpA, a subsidiary of Fiat SpA. The Fiat group operators in the motor vehicle Finishing and related work 14 900 industry, in particular through Fiat Auto for motor vehicles, Iveco for commercial vehicles and Magneti Marelli for Equipment and machinery 627 319 components. Total 643 079 (1) (1) Equal to ECU 334 million (ECU 1 = ITL 1 924 in October 1997). Fiat Auto has plants in Italy, Poland, Turkey and South America and produced 2,8 million vehicles in 1997, of which 1,8 million in Italy under the brand names Alfa Romeo, Ferrari, Fiat, Lancia and Maserati. It has some 10 plants in Italy which manufacture motor vehicles, as well as engines and Following the letter of 24 November 1997 from the components. In 1997 it employed about 62 000 persons in Commission and the meeting between the Italian authorities Italy in those activities of whom 17 000 at Mirafiori (1). The and the Directorate-General for Competition on 23 April 1998, domestic market accounted for 53 % of sales, other Union the Italian authorities decided to modifiy the terms of the countries 32 % and third countries 15 % (1995 basis). In notification. In their letter of 20 November 1998 they stated 1997, the Fiat group held some 11 % of the European market that the regional aid intensity originally proposed (2,01 % gge) (17 countries) for motor vehicles. would make a cost-benefit analysis unnecessary, as the aid could be authorised as aid for innovative investments. (1) In the body and engineering shops (production of vehicles, engines and gear boxes). (2) Replacing the Punto. 1.5.1999EN Official Journal of the European Communities C 120/13 The objectives of the innovative investments are summarised in The total investments described as innovative thus amount to the letter, as follows: ITL 51,1 billion (± EUR 26,6 million) in nominal terms. This would be equivalent at current values to ITL 33,68 billion. to introduce comprehensive innovations in order to bring the plant into line with its internal and external socio- The Italian authorities consider that, as a result of the economic context; investments, the Marea production line at Mirafiori is the most ergonomic line in the Fiat group and has no rivals among Fiat's European competitors. Other innovations, to apply specific technical innovations for the development defined as additional and marginal, are referred to in the of the space frame chassis, intended specifically for niche letter from the Italian authorities of 20 November 1998: vehicles; innovations relating to the data processing systems, to introduce supplier integration into production and logistics. maintenance dollies dashboard (Marea sedan and estate models (3)), The innovative investments, broken down into seven sub-projects, are as follows (nominal cost in ITL billion): maintenance dollies doors (Marea sedan and estate MULTIPLA models), Stamping Equipment and machinery for the manufacture of variable-section swivel hooks (on the Marea sedan and estate models). underframes for chassis subcom- ponents (Ermac) 16,5 New chassis welding plant using However, no figures are given for the proposed additional the lift-shift process and TTS investments; it would seem that Fiat Auto is to receive transport system (twin trolley system) to overcome differences discounted aid totalling ITL 8,13 billion under an approved in level without recourses to scheme provided for by Law No 488 of 19 December 1992. descenders for chassis and body The aid intensity would be 24,1 % gge, a rate which the Italian assembly 11,8 authorities state is below the ceiling stipulated by the Dedicated new welding line for Commission for aid to innovation. No other aid is planned bodyshells ready for transport, for the project in question. loading of chassis and unloading of bodyshell 7,8 Equipment and production The Commission can only examine the proposal to grant aid testing in the test rooms with a view to developing new shell for innovative investments on the basis of the information production cycles 6,8 contained in the recent letter from the Italian authorities. (a) The aid to Fiat Auto is caught by the ban in Article 92(1) MAREA of the EC Treaty as it is financed by the State or through State resources. Furthermore, as it constitutes a significant proportion of the total financing of the operation, it is Stamping New integral robogate with shell liable to distort competition in the Union by giving Fiat stapling by robots which grasp Auto an edge over competitors not receiving aid. Lastly, the body panels, place them in the correct position in relation there is extensive trade between Member States in the to the chassis and bend the ribs market for motor vehicles. in order to form the sub-assembly which is sent on for temporary assembly 16,5 The aid is intended for a firm which manufactures and Assembly Adoption of the friction assembles motor vehicles. conveyor, an ergonomic system for working on shells which, because of the larger size of the pallets, enables workers to stand The aid must therefore be assessed under the Community on the platform and assemble framework on state aid to the motor vehicle industry. It components on an unmoving vehicle 3,1 (3) Estate car. C 120/14EN Official Journal of the European Communities 1.5.1999 was notified by the Italian Government on 28 October 25 November 1996. The plan to grant aid, however, was 1997 and entered in the Commission State aid register on notified only on 28 October 1997. Furthermore, mass 29 October 1997. The framework in question was production of the Marea, Multipla and the new Punto published in Official Journal C 123 of 18 May 1989 (4). started in March 1996, July 1998 and April 1999 The Commission notes that the proposed aid would be respectively. However, in extending the decisions taken in granted under an approved scheme and that the cost of cases N 784/97, N 786/97, N 157/98, N 158/98, N 159/98, the operation exceeds EUR 17 million. The Italian auth- N 161/98 (5), N 163/98 (6) and 726/97 (7), the Commission orities have thus satisfied the requirement to notify the acknowledged that particular circumstances surrounding proposal. the adoption of Law No 488/92 could explain the delays between the start of the operation, the application for aid and the notification. It accepts, in the light of the expla- nations furnished by the Italian authorities, that the investor The Commission also notes that, according to the had strong reason to believe that aid would be granted framework which entered into force on 1 January 1998, under Law No 488/92, even as regards the part of the cases notified before 1 November 1997 but not yet assessed investment made between 1994 and 1996. The for compatibility by the Commission or cases which are the Commission also notes that the studies relating to the subject of Article 93(2) proceedings initiated prior to that project were started by Fiat in 1994.