The future of Sweden's Saab Automobile looked more uncertain than ever Wednesday after it was abandoned by US carmaker General Motors and the Swedish government refused to come to its rescue, despite impending bankruptcy.
“Prospects are really bad for them,” Mikael Wickelgren, a car industry expert and a professor at the University of Skoevde in southern Sweden, told AFP.
Sweden's centre-right government reiterated Wednesday that it had no intention of taking over the beleaguered Saab automaker despite a warning from owner GM that the unit could file for bankruptcy protection “as early as this month” unless it received Swedish help.
“The Swedish state is not prepared to own car factories,” Enterprise and Energy Minister Maud Olofsson told reporters in Stockholm.
“We are not prepared to risk the taxpayers' money … This is not a game of Monopoly,” she said, pointing out that GM had barely made a profit from Saab in the two decades it had controlled the unit.
It was unreasonable to expect the Swedish government to succeed where the world's biggest car maker had failed, especially in light of the current global economic situation, she insisted.
“Voters elected me because they wanted nursery schools, police and nurses, and not to buy loss-making car factories,” Olofsson told Swedish public radio earlier.
Her comments came a day after GM, which bought 50 percent of Saab in 1990 and acquired the rest 10 years later, issued its ultimatum to the Swedish government as part of a massive restructuring plan for the entire group presented to the US Treasury.
The US company, which announced late last year that it was looking for a buyer for Saab, said it wanted the Swedish car maker to become “an independent business entity effective of January 1, 2010.”
The head of the main opposition Social Democrats, Mona Sahlin, has called for the government to rescue the unit, but Prime Minister Fredrik Reinfeldt told the TT news agency he felt “she is falling for the trap set by the US auto industry chiefs.”
Olofsson agreed. “If you feel no responsibility for taxpayer money I guess you would be prepared to do something like that,” she said of the opposition proposal.
Due to Saab's chronic losses over the past 20 years, the only option for the company is to find a rescuer prepared to step in and take over, Wickelgren said.
“They have to create a Saab Automobile that is suitable for sale,” he said, adding however that the prospects did not look good.
“A brand and a factory” is all Saab has to sell, “and in fact very few companies are in the market for more factories. Then the brand remains,” he said, pointing out however that “there are also very few companies with good prospects” as buyers.
If no buyer is found and the Swedish government continues to refuse to take over Saab, “they don't really have any option,” he said.
While Sweden's government flatly rejects the option of taking over the iconic brand, it has said it might be willing to act as a guarantor for a European Investment Bank (EIB) loan of five billion kronor (450 million euros, 566 million dollars) to help keep it afloat.
Saab employs about 4,100 people in Sweden, 3,700 of whom work at its hub in the southwestern town of Trollhaettan.
According to the unions, some 15,000 jobs in Sweden would be at risk if the unit were to disappear, since its suppliers would also be hard-hit.
“We are worried, but GM has said it will continue to try to find a solution for Saab,” IF Metall union representative Paul Aakerlund told AFP, rejoicing that the factories won't be shut down immediately as many had feared.
Saab's brand, once renowned for its cutting-edge technology and futuristic designs, has in recent years suffered from an ageing product line and plunging sales. In the fourth quarter last year, the company's sales nosedived 38 percent to just 17,900 cars.
For all of 2008, the Swedish automaker sold only 93,300 vehicles down from 120,000 just three years earlier.
