Swedish Government Seeks Clarity On Research & Development Aid With Saab & Volvo

Posted on 24. Nov, 2008 by in 2000-2009, Sweden, Trollhättan, Sweden

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Photo Credit: Saab Automobile AB Sweden / Saab Technical Center

Reuters reports that the Swedish Government is seeking clarity on Swedish companies, Saab & Volvo’s role in research and development aid.

Here is the story:

STOCKHOLM, Nov 24 (Reuters) – The Swedish government on Monday ruled out any financial support for the Nordic country’s crisis-hit automakers Volvo Car Corp and Saab Automobiles until the intentions of their U.S. parent companies became clear.

Ford-owned (F.N: Quote, Profile, Research, Stock Buzz) Volvo Car Corp and Saab, owned by General Motors (GM.N: Quote, Profile, Research, Stock Buzz), have seen sales plummet in recent months while their struggling parent companies have sought a bailout from the U.S. government to stave off bankruptcy.

Enterprise Minister Maud Olofsson said the government sought to gain a clearer picture of the situation facing the two carmakers before any economic assistance was considered.

“What will Ford and GM do? Will Ford and GM move forward with Saab and Volvo? Will they develop new car models?” Olofsson told journalists.

“We could be a party to research and development. That is what several other governments are discussing,” she said, adding that other forms of direct aid were likely to run counter to EU competition legislation.

The comments came amid growing calls for the government to take action in support of the carmakers, seen as pillars of the Nordic country’s engineering industry and vital for the survival of a broad swath of suppliers.

The plight of the U.S. “Big Three” automakers — Ford, General Motors and Chrysler — has led to scattered calls in Sweden for the government to consider taking over the carmakers that for decades have been standard-bearers of the country’s export-oriented industrial sector.

In Monday’s issue of business daily Dagens Industri, Rolf Wolff, principle of the school of business at Gothenburg University, called on the government to nationalise Volvo to safeguard the pool of knowledge on which the industry is based. Volvo Cars is headquartered in Gothenburg, an important hub for the country’s industry on Sweden’s west coast. (Reporting by Johan Sennero; Writing by Niklas Pollard; Editing by Victoria Bryan)

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