News is just hitting the wires that Sweden will provide guarantees for Saab and Volvo.
Here’s the report, by AFP and picked up on some Aussie news networks (great work, DamoG!!)
SWEDEN will come to the rescue of its US-owned carmakers crippled by the financial crisis, Saab and Volvo, to secure the future of an automobile industry which accounts for 15 percent of exports, officials say.
“Of course the Swedish government is committed to supporting the carmakers.
“We can guarantee that we will have car manufacturing in Sweden because it is an important part of our economy,” Frank Nilsson, a spokesman for the enterprise and energy ministry, told AFP.
Volvo is owned by US company Ford, which overnight said it is considering selling Volvo because of the challenged facing the US auto industry.
US auto company General Motors, which has said it will run out of cash by the end of the year unless the US government provides financial support, owns Saab.
Sweden is committed to supporting Volvo and Saab and their hundreds of suppliers, which are “big employers” in Sweden with “lots of know-how,”said Mr Nilsson.
Seven in ten Swedes want the state to take over Volvo Cars temporarily, according to a weekend poll.
Volvo Cars has been hit hard by declining sales, as interest for its big, costly models dwindles.
In the third quarter, the company posted a net loss of $US458 million, nearly three times its full-year 2007 loss of $US164 million.
Meanwhile, Saab has tried to avoid layoffs at its plant by reducing two shifts to one.
I don’t know if this is just an extension of prior reports that Saab and Volvo had been talking to the government, or if this is a fresh story with guarantees that are iron clad. The story was only 19 minutes old when I clipped it and there was no other story with the same headline elsewhere, so it looks like a fresh one.
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The next big question to ask is what form of guarantees are they talking about here?
I’m pretty sure it’s not going to be a matter of handing over a wad of cash and then leaving the room. I would guess that it’ll be some sort of commitment to R&D funding or just a general undertaking that the industry won’t go under if and when the parent companies start looking for buyers.
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Another question is whether or not this guarantee has been prompted by Ford’s admission that Volvo is now on the block to be sold?
….and of course, what now for Saab?
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i guess we will have to wait to see how GM uses these funds, and what their inner intentions are.
It is likely that Ford’s bluff has worked (as they usually do, they’re experts at getting handouts) but clearly they are not putting a dollar figure on things just yet.
Great news regardless.
news from cleveland ohio 12/1/08 10:10 pm
GM to get rid of saturn saab hummer and pontiac.
keep chevy buick cadilac
hope only part of that is true
This had to happen as the Germans have come out and went as far as stating that even if GM cloesed down their government will provide a lifeline to Opel to continue as a going concern. So, this should also happen in Sweden with both makers too. It will be simply too much of a baggage to carry and politically suicidal if they don’t.
I hope the Swedish government makes sure it’s assistance strictly only goes to Saab and Volvo and not to GM and Ford in general.
I’m not sure what difference this will make to GM’s bid to Congress. Probably none.
It just probably lightens GM’s conscience a bit if it decides to let Saab go.
Not that it has any sort of conscience….
Tom, where did you get that?
See, I told you.
Good to see some logic at work.
Ahh PT’s business acumen continues to set the trend with his predictions !!!
the story was from a local broadcast channel 4 news in cleveland ohio
it might be premature
but it was broadcast TV