Ford and GM seek Swedish aid: report

Ford and GM seek Swedish aid: report
Ford and General Motors (GM) have asked the Swedish government for financial assistance in an attempt to improve the finances of Volvo and Saab ahead of the anticipated sale of the two brands.

The Financial Times (FT) newspaper reported on Monday that Stephen Odell, the head of Ford-owned Volvo Cars, and Jan-Åke Jonsson , managing director of GM-owned Saab Automobile, have both approached Sweden’s enterprise minister Maud Olofsson to discuss the matter.

The Swedish government is mulling a support package totaling around 2 billion kronor ($248m) in loans and aid for the two car makers, the newspaper reports.

“The car industry in Sweden is of importance for the country as a whole, and they are open to the idea,” Matts Carlsson, an auto industry analyst with the Gothenburg Management Institute, told the FT.

Reached on Monday by the TT news agency, Jöran Hägglund, a state secretary in Sweden’s enterprise ministry, said he was unaware of plans for Volvo and Saab to be sold, but confirmed that the government is holding ongoing discussions with both Ford and GM.

According to Hägglund, no decision will be taken regarding possible state aid for Saab and Volvo before the details of the European Commission’s €200 billion ($253 billion) stimulus package have been finalized.

Part of the package, roughly €5 billion, is expected to go support the European auto industry.

Moreover, Hägglund believes that the futures of Ford and GM depend largely on a decision expected later this week by the US Congress regarding a request for $25 billion to help bailout the US auto industry.

“We have no reason to race ahead of the pack,” said Hägglund.

According to the FT, both Ford and GM are expected inform the US Congress of plans to offload the overseas brands to assuage concerns that any US aid might be used to support the companies’ overseas operations.