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.
