Swedish Government Announces Financial Support Plan

Posted on 11. Dec, 2008 by in 2000-2009

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Photo Credit: Saab History

On November 18th, Saab Automobile asked the Swedish government for financial aid and since that time, there has been a lot of speculation as to what that aid would look like, and here it is:

Total financial support = 25 billion kronor (2.36 billion euros & $3.13 billion dollars USD)

Now, apparently Saab Automobile will need to apply for this funding that is now available to them with solid plans on how, and where exactly it will be used.

The funding will be available in credit guarantees as well as emergency loans and a full press meeting has taken place today at 11am GMT.

This news comes after the House of Representatives in the United States passed the auto industry act, but before the Senate cast their votes.

It looks like the Swedish government did not need to wait any longer for the United States government to complete their process in support of the auto manufacturers.

Here is a direct video clip of Sweden’s transportation minister, Maud Olofsson from SVT24 today at 5pm, 11am GMT:

Here are more details from Automotive News Europe below, but I would also suggest reading the local report as well.

Sweden Unveils Auto Aid; No State Buyout – Automotive News Europe

By John Revill December 11, 2008

Sweden’s automakers have reacted positively to their government’s plans to provide up to 25 billion kronor (2.36 billion euros) in credit guarantees
and emergency loans.

Volvo and Saab said they would decide in the next few days whether to apply for any of the funding that was announced Thursday. Eric Geers, spokesman for Saab, told Automotive News Europe: “We are extremely positive. We have to work out the details, but this is a good
step from the government with whom we have been having good discussions.” Geers said it was too early to say whether Saab would be applying for any
of the funding, although it is thought the General Motors-owned brand will apply for some money.

Volvo was also happy about the announcement, which it said would also help suppliers. “We will look into this announcement which we think is very positive,” Volvo spokeswoman Maria Bohlin told ANE. “It seems a good level of money. It will also help suppliers who have been having a difficult time,” Bohlin said. The Swedish parliament will vote on the proposals next week, but said the package meant there would be no state takeover of Saab or Volvo. Both companies are loss making and could be sold by their owners, General Motors and Ford. The Swedish government said: “The measures will be taken with the clear assumption that the state does not intend to acquire any of the existing automotive manufacturers.” The money will take the form of a 3 billion kronor investment in a state-owned research and development company. The government will also provide 20 billion kronor in credit guarantees to auto companies to borrow money from the European Investment Bank for use in developing green technology.The final part of the plan is to provide rescue loans of up to 5 billion kronor for auto companies facing collapse. The government said: “The measures are intended to create conditions for the continued success of the Swedish automotive industry in the future, to deal with the possibility of a deeper crisis in the automotive industry and to allow the quicker development of green technology.”

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3 Responses to “Swedish Government Announces Financial Support Plan”

  1. todd agostini

    11. Dec, 2008

    jkghv

    Reply to this comment
  2. Ted Y

    12. Dec, 2008

    Considering that the U.S. population is 33 times Sweden’s, the Swedish $3.13 billion would be equivalent to a $104 billion package in the U.S. Kind of makes the quibbling about a $15 billion package seem ridiculous.

    Reply to this comment
  3. Ryan

    12. Dec, 2008

    Ted,

    Good point, this is kind of a joke. Do you think any of that $15 will make it to Saab at all, I am suspecting not at all, especially since Saab was not part of GM’s “core 4 brands” as they stated.

    Reply to this comment

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