Ford (NYSE:F) May Cut Investment in Spain with New Law

With the government of Spain implementing a new law which would throw costs on auto companies operating in the country - like Ford Motor (NYSE:F) - if they aren't able to sell cars, the automaker and others are threatening to reduce investments in Spain if it remains in effect.

ANFAC, an auto makers association, which includes Ford, Volkswagen (VOWG_p.DE) and Peugeot (PEUP.PA), said, "This new situation obliges us to reconsider some of our already agreed investment plans."

The new law would allow car distributors to get a complete refund from manufacturers if the cars don't sell, and in a number of instances the workers and sales team would get paid for expenses as well.

Unsurprisingly, the Industry Ministry called an emergency meeting with auto manufacturers, unions and regional governments to address the issue.

This is why it's best for governments to quit interfering in markets.