Thursday 2nd October 2014

Chaos at the Nurburgring again

EU declares 1.2bn euros of state aid illegal and the Capricorn finance deal may have collapsed

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The Nurburgring has once again been making headlines today all over Germany and the rest of the world. There are two separate, but related headlines bouncing around right now.

Firstly, respected German business journal Wirtschafts Woche (Business Week) is reporting the collapse of Capricorn's finance deal with Deutsche Bank. The liquidators have officially refuted the story, but sceptics and opponents of Capricorn all insist there's no smoke without fire. While Deutsche Bank and Capricorn are sticking with the "no comment" angle, would-be buyers of the 'Ring HIG and Nexovation both confirmed that their offers still stands.

Which leads us to the EU headline. Brussels today declared that the €1.2 billion of state aid given to the Nürburgring was actually illegal. That means the three companies who received the payments must pay back the remaining balance (around €700 million according to the press release). Of course, those three companies are now insolvent, so, correct us if we're wrong, but it would appear to be a useless order. The money is gone.

What's not useless is that in the same hearing the EU commission decided that the sale process of the 'Ring to Capricorn was fair, transparent and at market value. Therefore Capricorn, or any other buyer, will definitely not be liable for any of the illegal state aid spent over the years. Bad news for taxpayers wanting their money back, but good news for fans of the Nurburgring.

[Sources: Rhein-Zeitung, SWR, Europa]

 

[errek72]

I can only say that I love how Europe manages to make itself unpopular even with the Germans that run it. Way to go arsemaggots.

[Mudgey]

Surely the Ring brings in money from outside the Germany economy so can't they just give it some tax breaks to make it viable? Also, correct me if I am wrong, but the money that was given to them was spent within Germany on wages, Taxes and business rates (if they have to pay them) so effectively the money has not just vanished?

[TheOtherMonkey]

State aid issues are more about the competitive advantage the company gets. So it gets free/cheap money from the German government to improve facilities, pay wages, advertise etc when its competitors (other circuits, other business parks, other festivals) do not.

A lot of car companies end up falling foul of these rules - the company gets cheap loans from the state in order to prop itself up and save jobs. But a rival firm (who might be very profitable and not about to go pop/make people redundant) wouldn't get the same cheap money and therefore loses out.

[smilo996]

Good to see the actual manner in which German business is run being highlighted once again.

The TT course would be a much better place to test road cars.

A fantasy but imagine it being widened, run off areas added etc. Would be the best track in the world.

[epom]

Still can't understand how some of these Arab billionaire guys haven't bought it !!

[fatboy69]

epom said:

Still can't understand how some of these Arab billionaire guys haven't bought it !!

Probably a good job that they haven't - the Ring would end up being painted red, covered in Ferrari logos & it would become another crap Ferrari World as in Abu Dhabi...

God forbid that ever happens!!!

[MGZRod]

epom said:

Still can't understand how some of these Arab billionaire guys haven't bought it !!

Because it's not in the middle of a busy city and is far too fast a road

[Martin 480 Turbo]

As of today the deal with Capricorn is still intact as is Capricorns
finance with "Deutsche Bank".

http://www.rhein-zeitung.de/region/regionale-wirts...

But it seems to be a close call. I hope for the guy that he will be able to carry this through.

[UltimaCH]

Looks like the saga continues...

[anonymous-user]

TBH, i never understood why the 'ring needed a theme park? It's a bit like building another themepark at Alton Towers or whatever? Surely the track is the ride??

[Roundm]

fatboy69 said:

epom said:

Still can't understand how some of these Arab billionaire guys haven't bought it !!

Probably a good job that they haven't - the Ring would end up being painted red, covered in Ferrari logos & it would become another crap Ferrari World as in Abu Dhabi...

God forbid that ever happens!!!

its safe from being turned into another Ferrariworld - Ferrari wont release a test time for one of their cars round the place so no interrest from that sector of the market

😄

[Roundm]

fatboy69 said:

epom said:

Still can't understand how some of these Arab billionaire guys haven't bought it !!

Probably a good job that they haven't - the Ring would end up being painted red, covered in Ferrari logos & it would become another crap Ferrari World as in Abu Dhabi...

God forbid that ever happens!!!

its safe from being turned into another Ferrariworld - Ferrari wont release a test time for one of their cars round the place so no interrest from that sector of the market

😄

[Pip1968]

Mudgey said:

Surely the Ring brings in money from outside the Germany economy so can't they just give it some tax breaks to make it viable? Also, correct me if I am wrong, but the money that was given to them was spent within Germany on wages, Taxes and business rates (if they have to pay them) so effectively the money has not just vanished?

You are forgetting all the greedy buggers that made a quick buck out of the contracts. Reasonable wages for the workers fair enough but it is the fees for the fat cats that is most annoying and for what - ? A theme park, some empty shops and some hotels.

smilo996 said:

A fantasy but imagine it being widened, run off areas added etc. Would be the best track in the world.

I am not sure if you have ever been there but if it was widened you would lose some of the 72 bends it has and of course some of its attraction.

Max_Torque said:

TBH, I never understood why the 'ring needed a theme park? It's a bit like building another themepark at Alton Towers or whatever? Surely the track is the ride??

That is just the point. The mistake made all those years ago just before the financial crisis.

Pip

[ILoveMondeo]

errek72 said:

I can only say that I love how Europe manages to make itself unpopular even with the Germans that run it. Way to go arsemaggots.

Ha, very true.

Also, why's the state aid illegal? because it's anti competitive and giving an unfair advantage to the ring? taking business away from all the other 28km public toll road/race tracks competing to be a test bed for manufacturers, race venue and a massive tourist draw?

If Spain, Italy, France and the UK have something similar I could see their point....

[Randy Winkman]

ILoveMondeo said:

errek72 said:

I can only say that I love how Europe manages to make itself unpopular even with the Germans that run it. Way to go arsemaggots.

Ha, very true.

Also, why's the state aid illegal? because it's anti competitive and giving an unfair advantage to the ring? taking business away from all the other 28km public toll road/race tracks competing to be a test bed for manufacturers, race venue and a massive tourist draw?

If Spain, Italy, France and the UK have something similar I could see their point....

Perhaps they could if their governments paid for it.

[ayseven]

Just follow the money. There is someone who makes more this way, than he would have another way. Somebody is always lining his pocket in ALL these arrangements, and the taxpayer usually foots the bill.

[SteveSteveson]

ILoveMondeo said:

Ha, very true.

Also, why's the state aid illegal? because it's anti competitive and giving an unfair advantage to the ring? taking business away from all the other 28km public toll road/race tracks competing to be a test bed for manufacturers, race venue and a massive tourist draw?

If Spain, Italy, France and the UK have something similar I could see their point....

Yes, because it gives an unfair advantage over competitors. Competitors like test facilities at MIRA and millbrook, tracks that have track days, even theam parks and hotels.

[CamMoreRon]

ayseven said:

Just follow the money. There is someone who makes more this way, than he would have another way. Somebody is always lining his pocket in ALL these arrangements, and the taxpayer usually foots the bill.

This!

And this is NOT how the Nurburgring should be run! I completely lost track of the Save The Ring saga, if I'm honest.. I just hope whoever is heading the Capricorn buy has their motives in the right place.

I want to keep driving it.. I don't want to keep having to pay more each year to pay off some closed shops and a rollercoaster that never ran. Sod all that crap off and make it pure again.

[suffolk009]

Roundm said:

its safe from being turned into another Ferrariworld - Ferrari wont release a test time for one of their cars round the place so no interrest from that sector of the market

AudiWorld.

(could be VWGroupWorld, but that doesn't really roll off the tongue)

[thatdude]

suffolk009 said:

Roundm said:

its safe from being turned into another Ferrariworld - Ferrari wont release a test time for one of their cars round the place so no interrest from that sector of the market

AudiWorld.

(could be VWGroupWorld, but that doesn't really roll off the tongue)

VAGworld


I wonder if it would make sense for car manufacturers to get together and fund it, given so many rely on it for testing duties