The aid has not yet been granted, but with the open call, the Galician automotive industry is resigned to losing the opportunity of the Next Generation European funds. Most of the projects do not fit within the requirements demanded by the central government. Stellantis will not be able to receive public money to finance part of the investment necessary to prepare the Vigo factory, with a view to assembling future models, due to a matter of deadlines. Galicia’s other big bet was the Autoancora project, which expected to mobilize a joint investment of 1,300 million. The sector recognizes that only a small number will be eligible for subsidies.
After the coronavirus pandemic, the European Union created the Next Generation to try to revitalize the economy of the Old Continent.
In Spain, the Executive of Pedro Sánchez has established the so-called Pertes (Strategic Projects for Economic Recovery and Transformation) to channel aid. On March 18, the call for the Electric and Connected Vehicle Perte was published in the BOE, with almost 3,000 million euros in subsidies. Seeing the conditions, the hopes of the Galician automotive industry vanished. The automobile industry, led by Stellantis in Vigo and its powerful network of auxiliaries, had a turnover of 11,200 million euros last year and employed 23,450 people. It is one of the main engines of the economy in the Community.
A week ago, Stellantis announced its projects to try to attract public aid. The investment in the Zaragoza factory will amount to 266 million. But the automobile group only contemplates for the Vigo and Madrid plants an amount of 43 million euros. In Balaídos, the most outstanding action will be the creation of a new battery workshop.
Sources from Stellantis explain that Zaragoza is about to launch new models on the market, but in Vigo, both the Peugeot 2008 and the K-9 vans (Berlingo, Partner and Combo) began to be manufactured relatively recently. The group did not plan to adapt the factory for the construction of new models for a few years. It is what is known, in automotive jargon, as the implementation of the platform. But the deadlines that the central government has set in the Perte establish that in 2025 the investments must be executed. Stellantis would be interested in the deadline being extended until 2026, still within the period allowed by the EU, more in line with its possible investment schedule for Vigo. The Government has brought forward the deadline for a bureaucratic issue, so that the aid can be comfortably justified and there are no problems.
From the Economic Vice Presidency of the Xunta they criticize that the central Executive has not spoken with Stellantis, the largest car manufacturer in Spain, to try to find out their needs. “They published the bases of a call without talking to the sector, and thus it is very difficult to get it right,” they recriminate. They fear that, if the Balaídos plant is left out of the aid, the group will choose to manufacture new models elsewhere, compromising the future of the automotive sector in Galicia. “In other European countries, Italy, France or Germany, they have already confirmed the new platforms, here we are already late,” indicate sources from the Vice Presidency. The Xunta and other communities have been demanding for some time that the Next Generation funds can be co-managed by the regional governments, precisely to adapt public aid to priority sectors and their needs in each territory.
The implementation of the necessary platforms for the Peugeot 2008 and the vans involved an investment of 650 million euros by Stellantis. The amount depends on the specific characteristics of the models to be built, which are expected to be electric. Stellantis has not yet announced any new car for Vigo, but any public aid that is established may tip the balance towards an award to Balaídos or to some other plant in the rest of the world. “The projects go where there is a competitive factory, but there is also help,” acknowledge sources from the factory in Vigo. Vigo meets the first criterion, as it is one of the factories with the highest production volume of the entire group. The second is now at risk, although it is possible that in the future the plant could benefit from some other program besides the Next Generation.
The Part of the Electric and Connected Vehicle has not only left Balaídos out. When the Next Generation funds were announced, Stellantis itself, together with the Galician Automotive Technological Center (CTAG), the sector cluster (CEAGA) and the Xunta decided to group the investments that they anticipated would be necessary for the future under the name of Autoancora project. In total, it would be about 1,300 million euros. Beyond the general lines that defined the European program (sustainability, digitization, innovation…), at that time the exact requirements of the call were unknown. Once published, the sector has discovered that only a few investments have reserves. We will have to seek financing elsewhere and wait for another train on the platform. The Next Generation will pass, if nothing helps, long. And the funds designed to deal with the battered economy left by the coronavirus will mean, in total, more money than Spain had received from Brussels in the past three decades.
The Xunta have not yet thrown in the towel. The department headed by Francisco Conde asks the Sánchez Executive to redirect the situation. For this, they request that the Automotive Table be convened, in which both the sector and the communities are represented. The body met before the call of the Perte, but the Xunta believes that it should meet again to see exactly how it will develop. In addition, the Galician government is pressing for the establishment of other aid mechanisms for the automotive sector, apart from the Electric and Connected Vehicle Perte, but also charged to the Next Generation funds, which in global figures could leave in Spain up to 140,000 million. After taking office, the president of the Xunta, Alfonso Rueda, sent a letter to Pedro Sánchez, in which, among other issues, he conveyed his concern about the future of the automotive industry in Galicia.
The Economic Vice Presidency of the Xunta also requests that “the level of aid intensity” be improved. Currently, on average, they will finance around 25% of the planned investments. The department headed by Conde recalls that other European aid easily reached up to 40%.
