In the 60s and 70s, massive amounts of taxpayer money were thrown away. The government invested billions of Belgian francs in sectors with little future prospects, such as the coal industry, shipbuilding or glass industry. If profits were made, they mainly went to private individuals. Albert Frère, for a long time the richest man in Belgium, sold the loss-making steel production to the state. He then turned to the profitable sale and commercialization of that same steel and amassed a fortune in the process.
Van Hool is of course not a coal mine. It makes buses and trailers, which will also be needed in the future. Van Hool therefore looks more like Barco, which was saved from bankruptcy in the early 1980s. There were no major buyers ready. The Flemish government then invested 600 million francs (15 million euros), after a tough restructuring plan with major job losses. Barco stopped making televisions and reoriented itself to niche markets such as projectors. That investment paid for itself in spades through the sale of shares in Barco. To this day, the company is an important Flemish technology company.
DAF Trucks en Alfacam
A company that resembles Van Hool even more is DAF Trucks. The Dutch truck manufacturer, with a large factory in Westerlo, went bankrupt in 1993. Not an unimportant detail for Van Hool: Flanders only entered the company after the bankruptcy, not before, and invested 25 million euros. DAF Trucks was sold to the American Paccar in 1996. Flanders received 75 million euros for the participation, three times as much as the investment. The factory in Westerlo is still there and has had several strong years.
In 2013, the Flemish government lost 8 million on a guarantee it had granted to the megalomaniac media company Alfacam, which caused a furore with expensive production vehicles. Coincidence or not, Alfacam had it made by Van Hool.
Father State also had to step in during the banking crisis. KBC received a large loan, Dexia Bank Belgium was nationalized into Belfius and Fortis Bank was sold to BNP Paribas. All government money (except in Dexia Group) was repaid and Belfius pays handsome dividends to the state. Due to the government’s cash injection, KBC and Belfius remained Belgian banks. Fortis Bank was sold, the government opted for ‘market forces’. Paris now clearly rules at BNP Paribas, to the detriment of the headquarters in Brussels. The federal government also did not lose any money with an emergency loan to Brussels Airlines.
Market potential
“Whether we should save a company or not depends mainly on the market potential,” says professor of economic history Erik Buyst (KU Leuven). “At the time, Barco had a niche product with projectors with a lot of value in the future, and there was someone in management who wanted to expand that.” Buyst doubts whether Van Hool also has such a product.
Yet that is the core of the rescue plan for Van Hool that crisis manager Marc Zwaaneveld proposed at the works council: cutting costs and focusing on the products on which it makes money, such as luxurious coaches, tram buses and high-quality trailers. That downsized company must then be profitable again. How profitable has not yet been said, although it is important for the Flemish government.
Suppose Flanders, for example, invests 100 million euros in the company, and Van Hool can make 6 million euros in net profit per year, then Flanders will achieve a return of 6 percent, which is much more than the interest rate at which it itself borrows (2.8 per cent). “But the government must still be given a guarantee that if something goes wrong, it can recover part of that money. I’m afraid Van Hool cannot provide that. The company intervened far too late,” Buyst concludes.
