Flanders Puts €119 million Behind Volvo Ghent

Flanders is putting €119 million on the table to keep Volvo's Ghent assembly plant open. Ghent 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, which will take over two of Ghent's three electric models from 2027.

Both packages benefit the same ultimate owner: Geely, the Chinese group that controls Volvo Cars. In total, €386 million in European public money is being channelled towards one corporate group. One subsidy helps build the replacement plant; the other tries to stop the original plant from falling over.

Thirty years of closures

Ghent is the latest point in a long Belgian industrial retreat. Renault Vilvoorde closed in 1997, Opel Antwerp in 2010, Ford Genk in 2014, and Audi Brussels in 2025. The pattern is familiar: a multinational parent points to high labour costs, government rushes in, and production still shifts elsewhere. Belgium's annual car output has fallen from more than one million vehicles to roughly 300,000 today.

The Ghent plant employs 6,500 workers and produces 212,000 vehicles against capacity of 300,000. That 71% utilisation rate weakens its hand. A factory with empty space on the line is easier for a parent company to question.

The supply chain is already cracking. Plasman, a bumper supplier with around 350 workers, half of them serving Volvo directly, has said it will close by October 2026. Workers went on strike 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 described it as "no blank cheque", although the specific employment conditions have not been published.

The wording is doing political and legal work. EU state aid rules contain no mechanism for preventing a plant closure. If Flanders called this a rescue, the subsidy would face much stricter conditions. So the money is presented as green investment. The Commission will have to decide, once Flanders formally notifies the aid, whether the package changes Geely's plans or simply pays for decisions already made.

Košice received Commission approval 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 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 move is about wages and production technology. Average annual pay in Belgium is around €59,600. In Slovakia it is roughly €20,300. Košice will also use megacasting, a process that casts large aluminium sections as single pieces instead of 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 for €119 million to protect 6,500 jobs that are partly threatened by the Košice investment. Same regulator, same parent company, different legal frameworks on 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 previous year. Geely chairman Li Shufu has said the group will stop building new factories, citing "severe global overcapacity". European car plants as a whole run at roughly 55% of capacity.

Two of Ghent's three electric models, the EX40 and EC40, around 42,000 vehicles in 2025, are moving to Košice regardless of the Flemish subsidy. Ghent is left with 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 argument also weakens.

ABVV-Metaal's Marc Staelens put the workers' fear plainly: "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 has any value depends on Geely's overcapacity problem, not on Flemish political intent.