Flanders offers €119 million to save Volvo Ghent

Flanders is offering €119 million to keep Volvo's Ghent assembly plant alive. This is Belgium's last remaining car factory. The European Commission has already approved €267 million in Slovak state aid for a new Volvo plant in Košice that will take over two of Ghent's three electric models from 2027. Both subsidies go to the same ultimate owner: Geely, the Chinese group that controls Volvo Cars. Combined, that is €386 million in European public money flowing to one corporate group — one subsidy to build a replacement, another to keep the original from collapsing.

Thirty years of closures

Ghent sits at the end of a long industrial retreat. Belgium has already lost Renault Vilvoorde (1997), Opel Antwerp (2010), Ford Genk (2014), and Audi Brussels (2025). Each time, a multinational parent cited high labour costs, a government scrambled to intervene, and production moved anyway. National car output collapsed from over one million vehicles a year to roughly 300,000 today.

The Ghent plant employs 6,500 workers and runs at 212,000 vehicles against a 300,000 capacity, a 71% utilisation rate that weakens its bargaining position. The supply chain is already fracturing. Plasman, a bumper supplier with around 350 workers, half of them serving Volvo directly, announced it will close by October 2026. Workers struck on 2 June, forcing Volvo to send some 4,000 employees home on temporary unemployment.

How the money is packaged

The Flemish subsidy splits into €80 million for innovation and battery technology, €30 million for energy efficiency, and €9 million for worker retraining. Minister-president Diependaele called it "no blank cheque," though specific employment conditions remain unpublished.

The phrasing matters because EU state aid rules contain no mechanism for preventing a plant closure. Calling the money a "rescue" would trigger much stricter requirements. So the aid is dressed as green investment. Whether it actually changes Geely's plans, or pays for decisions already taken, is the question the Commission will face when Flanders formally notifies the subsidy.

Košice cleared Commission approval in April 2024 under regional aid rules for less-developed areas. Volvo is investing €1.2 billion of its own capital alongside the public money. The plant already has 600 robots installed and has produced over 100 test car bodies, with full production targeting 250,000 vehicles per year.

The shift comes down to wages and technology. Average annual pay in Belgium is around €59,600; in Slovakia, roughly €20,300. Košice will also use megacasting (a technique that casts large aluminium sections as single pieces instead of welding hundreds of parts), which Ghent's older production line cannot accommodate.

Who gains, who loses, what stays open

The Commission approved €267 million for Košice to create 3,300 jobs. Belgium must now ask that same Commission for €119 million to protect 6,500 jobs partly threatened by the Košice investment. Same regulator, same parent company, different legal frameworks applied to opposite sides of the same production shift.

Volvo Cars cannot fill both plants. The company posted operating profit of just SEK 0.3 billion in 2025, down 99% from the year before. Geely's chairman Li Shufu has declared the group will stop building new factories, citing "severe global overcapacity." European car plants overall run at roughly 55% of capacity.

Two of Ghent's three electric models, the EX40 and EC40 (around 42,000 vehicles in 2025), move to Košice regardless of the subsidy. What remains is the EX30, brought to Belgium mainly to avoid EU tariffs on Chinese-made electric cars. If those tariffs soften in trade negotiations, even that rationale weakens.

As ABVV-Metaal's Marc Staelens put it: "Every model has to get cheaper. If it doesn't work, they move production to low-wage countries." Flanders' €119 million does not close the wage gap, install the missing technology, or fill the empty assembly slots. It buys time. Geely's overcapacity problem will decide whether that time leads anywhere.