The European Commission is next week expected to announce an investigation into the UK Government's planned £152m aid package for BMW's Rover Birmingham plant.
A BMW spokesman said recent press reports 'confirming' that an inquiry would take place were “speculation”, adding, however: “We anticipate that the EC will probably make an announcement on December 22, before the Christmas break.”
Trade and Industry Secretary Stephen Byers told the Commons last week that he had spoken with EC competition commissioner Mario Monti, stressing the need for a speedy decision to any investigation.
“Provided we get a decision before May or June of next year, there is no reason why the aid should be threatened because this is the sort of timescale that BMW are working to as well,” he said.
BMW has committed £1.5bn investment to the plant but is reported as saying: “If the commission came to an unexpected decision to refuse the state aid, we would be forced to reconsider the investment.”
But a two-day strategy meeting of BMW and Rover senior managers last week ended with a renewed assurance from chief executive Joachim Milberg that BMW would fulfil its commitment to Rover.
The BMW spokesman was “hopeful” that the EC would make an “early and positive decision”.