A report in the Swedish business press has disclosed that Sweden’s government is prepared to give a series of loans and loan guarantees worth billions of kronor to slumping Swedish carmakers Saab and Volvo. Both of the Swedish-based carmakers are national icons, but are currently owned by American carmakers.
US-based General Motors and Ford, who are both fighting their own battle for survival at home, have stated emphatically that they wish to sell their stakes in Saab Automobile and Volvo Cars, respectively. Talks have been held between the two US auto giants and the Swedish government in an attempt to reach a deal that benefits all involved.
“It is not a question of subsidies or of the government going in as an owner, but of loans and loan guarantees on good terms,” an unidentified source told the Dagens Industri (DI) newspaper. Both Volvo and Saab are important to the wider Swedish economy because they provide thousands of jobs for workers at the plants as well as in the local companies that supply the equipment and materials to build the cars.
The Local newspaper believes the Swedish government will eventually buy out, or at least bail out, both of the carmakers. They have also reported that the government is talking to both carmakers about establishing a new jointly owned company that would promote research and development for environmentally friendly vehicles.
“They have also reported that the government is talking to both carmakers about establishing a new jointly owned company that would promote research and development for environmentally friendly vehicles.”
–> I agree. Certain vehicles these days such as hybrids, plug-ins, electric and hydrogen are friendly vehicles. They are the best greener options we as the car-buying public should take. Hoping everything will be on the right track for the both carmakers. ;)
Oystein, Norway (Dec 13, 2008). I agree with you 100%. The Swedes are clever people (as indeed are the admirable Norwegians) But as the Moslems say, “None is perfect but God Himself.” In my view, Sweden should have acted by this time on the matter of SAAB and Volvo. Absolutely!! Because from the close vantage point of Canada, I watch the situation in America changing day to day, and not always logically. If a Chapter 7 or Chapter II bankruptcy had been imposed on the Detroit, ‘Big’ Three auto manufacturers which was an actual possibility, Sweden would have had its options pretty much closed off. So, not to act now, is a gamble. It would be a great pity and a mistake if, as I read somewhere, political ideology is, in Sweden, having a role in this matter. So the question is; What does Sweden have to lose by acting now to repatriate SAAB and Volvo? Financing is not a problem because this can be handled in many ways, one of which is, for example, issuing convertible bonds. However, not being a Swede, in this matter I am just an interested spectator. But I’m curious to know what the opinion of ordinary Swedish people is about this matter?
> C. Alexander Brown. You should not be to concerned – the swedes are clever people and I really think they know what this handle about.
The government of Sweden is being unrealistic in its response to the American — and indeed international — automobile industry crisis. Throwing some millions of Kroners at SAAB and Volvo is money wasted if these companies are not repatriated to Sweden, or at least, to Scandanavia. So my question is; are the Swedish politicians and their officials making the decisions on this problem, aware of all the dimensions, ramifications gravity and complications of the situation? Or are they aware only of the overall ‘umbrella’ problem? Do they, for example, understand that the southern US Republican Senators Richard Shelby and Bob Corker who scuttled at the last minute, Washington’s plan to rescue the US auto industry are using foreign care manufacturers based in their states, including Volvo, as pawns in a devious and complicated political and regional economic game? I am sure the answer is no. The Swedish government should put its ideology aside and together with Swedish investors, outright buy back Volvo and SAAB, because I understand that in fact talks are underway with American executives in Detroit about selling both companies, SAAB and Volvo to Chinese industralists. Should this indeed happen, Sweden can, as the saying goes. “kiss them goodbye” vas Swedish assets.
C. Alexander Brown is a former Canadian Government official. He now specialized in international Technology Transfer.
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