Flanders’ €119 million Volvo Ghent rescue

Flanders is putting €119 million on the table for Volvo’s Ghent assembly plant, Belgium’s last car factory. The awkward part is where the rest of the story leads. The European Commission has already approved €267 million in Slovak state aid for a new Volvo plant in Košice, which will take over two of Ghent’s three electric models from 2027. Both cheques ultimately benefit the same owner: Geely, the Chinese group that controls Volvo Cars. In all, €386 million in European public money is being directed towards one corporate group, first to build the replacement and then to stop the original from falling over.

Thirty years of closures

Ghent is the last stop in a long Belgian retreat from car manufacturing. Renault Vilvoorde closed in 1997, Opel Antwerp in 2010, Ford Genk in 2014 and Audi Brussels in 2025. The pattern has been painfully consistent: a multinational parent points to high labour costs, government rushes to intervene, and production moves anyway. Belgium once made more than one million vehicles a year. Today the figure is roughly 300,000.

The Ghent plant employs 6,500 workers and produces 212,000 vehicles against capacity of 300,000, giving it a utilisation rate of 71%. That matters because car factories are bargaining instruments as much as industrial sites: the emptier the line, the easier it is for headquarters to argue that work should go elsewhere. The supply chain is already showing the strain. Plasman, a bumper supplier with around 350 workers, half of them serving Volvo directly, says it will close by October 2026. Its workers struck on 2 June, forcing Volvo to send some 4,000 employees home on temporary unemployment.

How the money is packaged

The Flemish package is split into €80 million for innovation and battery technology, €30 million for energy efficiency, and €9 million for worker retraining. Minister-president Diependaele has called it "no blank cheque", though the precise employment conditions have not been published.

That language is doing real work. EU state aid rules contain no mechanism for preventing a plant closure. If Flanders called the money a rescue, the test would be far tougher. Instead, it is presented as green investment. The question for the Commission, once Flanders formally notifies the subsidy, is whether the money changes Geely’s plans or merely pays for decisions the company had already made.

Košice was cleared by the Commission in April 2024 under regional aid rules for less-developed areas. Volvo is putting in €1.2 billion of its own capital alongside the public money. The Slovak plant already has 600 robots installed and has produced more than 100 test car bodies, with full production aimed at 250,000 vehicles a year.

The commercial logic is not mysterious. Average annual pay in Belgium is around €59,600. In Slovakia it is roughly €20,300. Košice will also use megacasting, a technique that casts large aluminium sections as single pieces rather than welding hundreds of parts together. Ghent’s older production line cannot accommodate it.

Who gains, who loses, what stays open

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

Volvo Cars does not have enough demand to keep both plants full. The company posted operating profit of just SEK 0.3 billion in 2025, down 99% on the previous year. Geely chairman Li Shufu has said the group will stop building new factories, citing "severe global overcapacity". Across Europe, car plants are running at roughly 55% of capacity.

Two of Ghent’s three electric models, the EX40 and EC40, representing around 42,000 vehicles in 2025, are moving to Košice regardless of the Flemish subsidy. What remains is the EX30, which was brought to Belgium mainly to avoid EU tariffs on Chinese-made electric cars. If those tariffs are softened in trade negotiations, that reason weakens too.

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. Whether that time leads anywhere will be decided by Geely’s overcapacity problem.