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Swedish government considers car industry loans

 

Embattled carmakers Saab and Volvo may be offered loans to help fight for survival in global downturn.

Sweden’s parliament will vote next week on a government plan to set aside $US3.1 billion in credit guarantees and emergency loans to Swedish automotive companies hit by the global downturn.

The plan would pay $US376 million into a state-owned research and development company, earmark $US2.5 billion for automotive corporation credit guarantees and make $US627 million available in loans to auto industry companies.

The package includes a guarantee of no state takeover of the car industry.

Swedish carmakers Saab and Volvo have been in talks with the government and though wanting to examine the details before making a decision, have said the plan is positive and a good step.

They say it will also help motor industry suppliers who have been hit by the global car sales downturn. Both Saab and Volvo are owned by American car companies.

General Motors has indicated to the US congress in submissions seeking a $US15 billion loan for it and Chrysler, that Saab is one of two brands it would sell or close in a restructuring and cost-cutting plan. The other is the North American market-only Saturn brand which operates semi-independently of GM.

GM has said too that it will drastically cut the Pontiac model line-up.

Ford says it’s currently reviewing the future of Volvo and among the options is selling the Swedish outfit. Ford has already sold Jaguar and Aston Martin and reduced its holding in Mazda.


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