May 25, 2009

Flemish gov’t backs Volvo loan guarantees

The Flemish regional government says it will financially support the Belgian operations of the Swedish automaker Volvo.

Volvo Cars CEO Stephen Odell met Kris Peeters, the prime minister of the Flemish regional government, on Monday, and Peeters announced the government would be willing to provide bank loan guarantees, the Swedish news agency TT reported.

It is important that the factory in Gent (Ghent) has a future, Peeters said. The jobs there are very important. Under certain conditions we are prepared to provide guarantees of $280 million to $420 million for the European Investment Bank loans.

Peeters told TT Flanders' move was triggered in part by the Swedish government's decision to freeze its own discussions with Volvo, citing the company's uncertain future ownership structure.

We have discussed it, he said. But we have decided not to freeze discussions. This is the difference between the Swedish government and us.