Swedish government confirms talks over Saab, Volvo sale or bailout
12/01/2008, 9:04 AM
By Andrew Ganz
Sweden’s government confirmed that it is in talks with Ford and General Motors – the owners of Volvo and Saab, respectively. Though the government wasn’t willing to divulge details of the talks, a report today indicates that Ford and GM talked with the Swedish government about the prospect of government-backed aid to bolster the Swedish brands’ finances before the Detroit automakers sell off the subsidiaries.
Financial Times reports today that executives from both Ford and GM had spoken with Swedish interior minister Maud Olofsson about securing funds for the two Swedish automakers.
Should Ford and GM receive the federal aid from the United States that they’re requesting, it’s unlikely that they would be able to spend a substantial amount of it on international activities. Yet the European Union’s competition regulations would essentially prohibit the Swedish government from supporting its own auto industry, a sort of catch-22 that could leave the two brands in limbo.
Frank Nilsson, a spokesman for Sweden’s interior minister, confirmed that “It is no secret that we are speaking to Volvo and Saab, but nothing has come out of these talks.”
He also said that it is important for the Swedish government that the two automakers remain based in Sweden. It appears that the government would be willing to provide loan guarantees to help out its automakers, though
“We have had a lot of discussions with the government, about different scenarios, about what happens if this economic crisis doesn’t turn around soon. And, yes, guarantees,” Saab spokesman Eric Geers told Reuters.
According to the Financial Times, the government is considering up to 2 billion Swedish crowns – about $252 million – in direct aid or loan guarantees for Saab and Volvo, though this figure has not been confirmed by the government or the automakers.
12/01, 1:00 PM
posted by:
t-ak-box
I’m glad that the Swedish Government is willing to save one or both of these Automakers. It would be sad to lose these distinctive auto brands.
12/01, 8:09 PM
posted by:
Get Real
Just let them die.
12/02, 3:36 AM
posted by:
inline6
I don’t know how the Swedes will run two companies that compete directly with each other, but I would nonetheless like to see both survive. They’re both worth saving.
GM and Ford turned out to be bad partners for Saab and Volvo because they were so huge that there was little way either (relatively small) firm would get much attention and therefore priority.
Tata might need a volume seller to help its Jaguar/LR arm with economies of scale. Porsche (had it not gone off and tried to buy VW, which has now been put on the back burner) would have been an ideal match for Saab in particular. If Proton had any money, it could probably use a semi-upscale manufacturer to lend its own line of cars some more engineering expertise, while the Saab or Volvo line got breathed on by Proton’s Lotus subsidiary.
Maybe Magna would be a good fit for one of them (Magna-Steyr already build the 9-3 convertible).
But Fiat Auto SpA would not be a good fit. They have THREE upscale brands as it is (Lancia, Alfa, and Maserati), and all three of them are keeping a recently resurgent Fiat’s hands full.
PSA might be a good fit for Volvo, but Renault-Nissan wouldn’t be. They’re trying to establish their Infiniti brand around the world, and Volvo and/or Saab would just distract from that. PSA has Peugeot and Citroen, both of which offer mainstream vehicles, although Citroen does offer the poor-selling C6 in Volvo/Saab’s price range. But they’d be a much better fit for either firm.
Beyond that, any of the major Chinese firms might be interested, if only to gain either company’s engineering (and particularly their vehicle safety) expertise.
All that to say, there are a few options. And I sincerely hope that both Saab and Volvo enjoy a rich future with a better partner than either of them have now.