Sunday, November 30, 2008

"Sweden would need to design any guarantees or loans carefully to avoid breaching European Union rules on state aid."

Are they going to ask me for money? From the FT:

"
Volvo and Saab ask Sweden for aid

By John Reed in London

Published: November 30 2008 23:37 | Last updated: December 1 2008 00:24

General Motors and Ford Motor have approached Sweden’s government about financial aid for their lossmaking Saab and Volvo brands.

GM and Ford want to bolster the two marques’ finances in anticipation of selling them as the Detroit carmakers grapple with a cash crunch that threatens their survival."

I'm reeling from the size of this tin cup:

"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.

In Germany, Angela Merkel’s government is considering giving GM’s Opel unit a €1bn ($1.3bn) credit guarantee.

Analysts have long argued that GM has too many brands. It is reportedly also considering selling Saturn and Pontiac.

Mr Jonsson “has been talking to government about loan guarantees, and maybe even taking an equity stake in Saab”, said one person briefed on the discussions. GM has also raised the possibility with Stockholm of bringing more of Saab’s overseas production back to Sweden.

However, Sweden would need to design any guarantees or loans carefully to avoid breaching European Union rules on state aid."

I'd like to know how they do this. It looks suspiciously like state aid.

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