Sweden Still Weighing Saab Investment Risk

Thor Johnsen
by Thor Johnsen

Excited about the new Saab 9-5? Saab has put up a count-down timer on their homepage, for those in need to see exactly how far away the official unveil will happen. Meanwhile, the deal is still, as I wrote earlier, uncertain to say the least.

With Christian von Koenigseggs’ clever statement to the press; expressing his thoughts around the missing money, suggesting a split between GM, Koenigsegg Group and the government, the entire negotiations have been moved to the media, which probably was CvKs intentions, hoping this would put extra pressure on the government. And sure enough, it has annoyed some ministers, causing the Swedish Prime Mininster, Fredrik Reinfeldt, to exclaim at a press meeting: “I am not prepared to pledge Sweden to take capitalist risks for its advantage.” When the Saab-question came up at the press meeting, he was clearly annoyed, stating:

I note that some are trying to change the order of how companies should be dealt with in Sweden. Firstly, the purchaser does not use enough of their own money. The venture capital and credit market, which is becoming better will not withstand. So all of a sudden, the largest venture capitalist become the state, as if welfare money is to go in and take risks that no one else wants to take.

Industry Minister Maud Olofsson (C) voices the same message. “Usually there are sufficiently enough money when a private company buys a private company. There are indeed some private capital available, and it is up to owners to get it,” she said to Swedish newsagency TT on Wednesday.

Social Democratic (the Swedish opposition party) economic policy spokesman Tomas Eneroth is critical of the governments reluctance, contrasting:

The government must make efforts to find a solution, otherwise jeopardizing both jobs and prosperity. The jobs of 4000 at Saab, the 8000 employees among suppliers and a few thousand in the service sector disappears. The government has opted for ideological reasons not to act. It is the ideological blinkers I criticize. In other countries the State is endeavoring to save jobs.

So the question remains: Are Saab worth saving? Should Sweden contribute a measly €300 million to save Saab, whereas the Germans are reportedly willing to inject €4.5 billion into the Opel-Magna deal? What about GM? How much are they willing to risk? Clearly, there’s a lot to be solved, and these negotiations have just started.

[UPDATE: The figures listed at the end of the article were incorrect and have been changed to the correct ones.]

Thor Johnsen
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  • ZekeToronto ZekeToronto on Aug 21, 2009

    The Swedish government needs to worry about Volvo's future (many more jobs at stake) not Saab's. Saab should have merged with Volvo years ago, when they had the opportunity and turned it down.

  • Thor Johnsen Thor Johnsen on Aug 21, 2009

    Ingvar, you're right - there's been shaved off 3 zeros on both Saab and Opels estimates at the end of the article. It's 300 million euros in Saabs case, and 4,5 billion to Opel. My bad!

  • Lorenzo Are there any naturally aspirated engines available?
  • Lorenzo Six percent here, ten percent there, and pretty soon you've got a dead brand.
  • ToolGuy Tungsten trim? I am holding out for the Depleted Uranium trim.
  • Proud2BUnion Mr. Allen Wrench needs tungsten to live!
  • Lorenzo All the efforts made over decades to reduce/eliminate NVH in ICE cars, and now they're putting noise and vibration into electric cars. It reminds me of efforts to make veggie burgers taste like meat. Vegetarians don't want the taste of meat, and meat eaters will want meat, not veggie burgers.