Brussels, 2nd July 2008
State aid: Commission endorses €1.6 million training aid for DHL in Leipzig-Halle and rejects €6.1 million operating aid
The European Commission has endorsed €1.6 million of training aid at DHL's new site in Leipzig-Halle, Germany but rejected a further €6.1 of aid which would have acted as an illegal operating aid. The Commission's decision follows an in-depth investigation under EC Treaty state aid rules launched in June 2007 (see IP/07/895). The Commission concluded that the €1.6 million would genuinely lead to additional training which goes beyond legal requirements and operational needs, and therefore complied with the EU state aid rules on training aid. However, the Commission rejected as incompatible a further €6.1 million of funding that would have served to finance training activities that DHL would have carried out anyway, even without aid, and concluded that the aid would be used finance ordinary operating costs of DHL. Such operating aid would have given DHL an unfair advantage over its competitors, who don't receive such aid, and so seriously distorted competition.
EU Competition Commissioner Neelie Kroes said: “Training aid can stimulate economic growth and job creation. I am therefore happy to endorse some training aid to DHL. However, the Commission has the duty to ensure that such aid leads to additional training activities and is not used to cover normal operating costs of big companies. In this specific case, the bulk of the aid would not have been used for additional training and would have seriously distorted competition.”
Germany notified its intention to grant subsidies of €7.7 million to DHL for a training project concerning certain jobs such as ground handling of airfreight, security agents, pre-flight and ramp mechanics. Following its relocation to Leipzig-Halle, DHL, with the support of regional aid approved by the Commission in April 2004 (see IP/04/502), built a new delivery and airfreight centre, where it employs around 1500 new staff, of which 480 are concerned by the training project.
The Commission's investigation revealed that parts of the proposed aid are not compatible with the EU rules on training aid. In particular, the Commission found that DHL would have provided the training to its employees even in the absence of the requested aid as it was employing new workers to start operating its new delivery and airfreight centre. These workers need sophisticated training which is to a large extent required by law and necessary to properly operate the hub. The Commission thus concluded that the part of the aid earmarked for training of new workers would not lead DHL to increase training activities and is therefore not compatible with EC Treaty state aid rules. Consequently, €6.1 million of the proposed aid cannot be authorised.
The rest of the measures notified by the German authorities, namely €1.57 million of aid are compatible with the Single Market because they are necessary for the company to provide additional training which exceeds the legal requirements and operational needs.
The Commission is in favour of supporting training activities, because they benefit the European economy by broadening the pool of skilled workers. However, it is necessary to ensure that such aid actually motivates companies to carry out additional training activities and is not simply used to subsidise the cost of training that the company would in any case have to undertake. This is particularly necessary in a globalised economy, where companies decide to relocate to new sites and where unjustified aid can give rise to considerable distortions of competition.
The non-confidential version of the decision will be made available under the case number C 18/2007 in the State aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State aid Weekly e-News.