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?