Bailout Watch 251: Volvo and Saab Now on Official Death Watch

Robert Farago
by Robert Farago
bailout watch 251 volvo and saab now on official death watch

In the run-up to this weeks bridging tournament, GM and Ford are indicating their [belated] willingness to axe ailing brands. Now you could look at their most recent sales stats and argue that this description applies to all 11 U.S. car brands under The Big Two’s umbrella, but we speak here of the Swedish contingent: Volvo and Saab. The former lost $458m in the last quarter alone. The latter, well, who knows? GM doesn’t break-out Saab’s red ink. (The brand hasn’t made a profit since The General bought it in 1989.) Anway, The Financial Times reports “Ford and GM will both tell the US Congress they have long-term plans to dispose of the brands this week when they present detailed business and financial plans to support their request for $25bn of emergency funding.” “Long-term” being the operative word; the automakers can no more cut the Swedish brands loose without C11 than you can eliminate credit card debt by scissoring your plastic. But don’t worry, the suits have a way to avoid the thorny issue of using U.S. bailout bucks to protect Swedish (German?) jobs: they’ll ask Sweden for money.

In fact, they already have. “Stephen Odell, Volvo’s chief executive, and Saab’s managing director Jan-Ake Jonsson have separately spoken to Maud Olofsson, Sweden’s industry minister, and other officials about securing funds, according to several people familiar with the discussions.” And here’s the weird part: Sweden seems up for it.

“Sweden’s government has considered devoting about SKr2bn ($248m) to Saab and Volvo in direct aid or loan guarantees, although ‘the discussion is open’, said Matts Carlsson, auto industry analyst at the Gothenburg Management Institute. ‘The car industry in Sweden is of importance for the country as a whole, and they are open to the idea,’ Mr Carlsson said. Spokespeople for Sweden’s industry ministry, Saab and Volvo could not be reached yesterday.”

Hang on; $248m? How do you say chicken feed in Swedish?

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2 of 24 comments
  • Stuki Stuki on Dec 01, 2008

    It would be a bit of a shame if both of those previously solid engineering and industrial cultures went by the wayside. With the kind of global overcapacity in autos, I wouldn't bet on them surviving intact, though.

  • Zack Sargent Zack Sargent on Dec 02, 2008
    "The fact is, that if Volvo is right now being a loss for Ford, you can’t blame Ford’s management of Volvo. The company, the cars, look better and offer more than they ever have. Under Ford, Volvo has grown from a two-model company (sedan or wagon, sir?) to a full-line near luxury/luxury make.” This is THE fallacy of the entire industry: That more is more. When the market expands, sure, everyone is interesting in the next newest, best thing. But these are not magazine subscriptions or music CD's. Serving a niche audience in the auto industry is crazy and expensive and works only if you are nimble and focused (and a bit lucky). What is wrong with two or three or four models of cars if they all work? Who needs a "full line"? If Volvo makes the safest coupe/sedan/wagon in black/forest green/or white on earth, bar none, doesn't that have a certain kitsch? People are interested in buying safe cars (last I checked, few went out of their way to buy an unsafe one). So, bottom line, Volvo has Americanized. By which I mean the usual: It's overweight, has diluted its original purpose, and may not care about either of those things if it can take a government-sponsored Zoloft.

  • Jkross22 Most cars would be better with a manual. Maybe not the large SUV/sedan classes of cars, but everything else would be better/more enjoyable. Everything smaller than a Camry would drive better with a manual.
  • Tassos this "tease" is not worth the paper it's printed on. As is the vast majority of such "teases" that do not reveal a single spec or decent photo of the vehicle.
  • Tassos Even when new, these were tiny, worthless, unsafe, unstable pieces of JUNKTO ask.. $7,200 (don't forget the $200) for this utterly worthless 38 year old rustbucket is a testament to what a total fool must one be to be buying any car today. My advise to all of you who are eager to buy anything today is W A I T. Wait two years. Keep what you have, it could not possibly be worse than this worthless piece of excrement.Oh, and BTW,, I DID drive this worthless thing, had to rent it on a 5 day vacation on an island in the Mediterranean. So don't tell me I don't know it.
  • Mcc65704141 Looks like another unwanted four door
  • 28-Cars-Later Nice Tundra silhouette.