Swedish Government Wants No State Aid To Go To Detroit

Posted on 17. Feb, 2009 by in 2000-2009, Sweden

Photo Credit: Saab History / 2003 (Stockholm)

I have been wondering why the Swedish Government has recently changed their position on providing financial support since late last year with Saab Automobile.

The Swedish Government’s reason, as recently discovered through some anonymous discussions I have had with some Saab History insiders as well as a brief mention on Reuters has clarified this reason for me.

The Swedish Government does not want to offer any financial support this early in the game that would be earmarked for Saab because they believe it would probably end up in GM’s hands and be squandered in Detroit.

I can understand and respect this position for the Swedish Government, but the problem with this game of chicken for the Swedish Government & General Motors, is that Saab Automobile needs funding support and fast, with three products almost ready to be launched and business operations needing to be continued as well.

Conversely, it almost now seems clear that when GM said it only wants to focus on its four core brands back on December 3nd, of 2008 and put Saab up for review. GM fully intends on doing so by not wanting to spend money in Sweden either. Case in point, we still do not yet know if they even applied for that European Investment Bank loan as they were supposed to.

I am hopeful that GM as part of their Business Plan that will be presented in 1 and a half hours from now, will show that they are willing to provide Saab to the Swedish Government for relatively little cash, and GM can basically be cut ties from Saab over a period of time as Saab Automobile vies for full independence.

If the Swedish Government is waiting for GM to “carve out” Saab to be fully independent “before” the Swedish Government provides cash, I am afraid that will not work, because a number of Saab Automobile’s products currently depend on GM factories combined with parts, patents, etc.

I understood that the section that focuses on Saab Automobile’s viability within the GM Business plan would show how Saab Automobile would become independent from GM, and how it is making strides to be financially, environmentally sustainable and fully Swedish in order to satisfy both the Swedish Government’s and the European Investment Bank’s loands.

I certainly hope that the Swedish Government is not expecting Saab to be able to get there prior to getting the financial support because that would kind of defeat the purpose at this point because that road to independence and sustainability will certainly take some time, not 1-2 months, that’s for sure. Furthermore the road to these objectives requires funding and needs to take place first, so this will be an interesting game of chicken once the plan is submitted is submitted.

Whatever happens, I still hope that Saab Automobile AB also has a business continuity plan if General Motors goes bankrupt, because that still may be a possibility here as I understand.

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