Sweden Refuses to Rescue Saab

Feb. 18, 2009
Enterprise and Energy Minister Maud Olofsson said that Saab had been loss-making for much of the past 20 years it has been under GM control.

The Swedish government insisted on Feb. 18 it would not step in to take over and rescue beleaguered automaker Saab despite a warning from owner General Motors that the unit would go under without official help.

"Voters picked me because they wanted nursery schools, police and nurses, and not to buy loss-making car factories," Enterprise and Energy Minister Maud Olofsson said. Her comment came after GM late on Feb. 17 presented a massive restructuring plan to the U.S. Treasury and said its troubled Saab unit could file for bankruptcy protection "as early as this month" without support from the Swedish government.

The company said last year it planned to try to find a buyer for the brand.

"They're basically saying they think the Swedish government should take over Saab, but if we do that we're talking about an incredible amount of money," Olofsson said. She contended that that Saab had been loss-making for much of the past 20 years it has been under GM control. "I'm disappointed in General Motors, because they're abandonning Saab and are pushing the responsibility over to Swedish tax payers, and I think that is irresponsible," she said.

While Sweden's government has refused to take over Saab it has nonetheless said it may act as a guarantor for a European Investment Bank (EIB) loan of five billion kronor (US$566 million) to help keep the car maker afloat.

The opposition meanwhile insists that that is not enough, calling for the government to pump state funds into Saab. "A heavy responsibility rests on the Swedish government," Tomas Eneroth, the economic policy spokesman for the main opposition Social Democrats, told the TT news agency.

Saab, which after years of dwindling sales went into full crisis mode with the global economic downturn, employs some 4,100 people in Sweden, 3,700 of whom work at its hub in the southwestern town of Trollhaettan. According to the unions, some 15,000 jobs in Sweden would be at risk if the unit were to disappear, since its suppliers would also be hard-hit. "We are worried, but GM has said it will continue to try to find a solution for Saab," IF Metall union representative Paul Aakerlund said.

Copyright Agence France-Presse, 2009

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