‘GM must outline plans for Saab’: Sweden

'GM must outline plans for Saab': Sweden
A Swedish government official has said the country will not pay out state credit guarantees from General Motors until Saab's US owner can present a more credible business plan for its Swedish subsidiary.

“We have asked for … a more credible business plan that outlines the development over the next few years based on a scenario where sales continue to decrease and the measures needed to combat that,” Jöran Hägglund, state secretary in the ministry of enterprise, told Swedish public radio.

“That’s a prerequisite for moving forward in the talks about credit guarantees,” he said.

Hägglund said talks were ongoing with both GM and Saab.

The Swedish centre-right government in December presented a 28 billion kronor ($3.5 billion dollar) package to help the country’s beleaguered automotive sector, including carmakers Saab and Volvo which is owned by US automaker Ford.

Of that sum, 20 billion kronor are earmarked for state credit guarantees “for raising loans (from) the European Investment Bank for conversion to green technology.”

Hägglund said GM had two weeks to present a new plan.

“A decision on whether or not the state is prepared to provide guarantees is about two or three weeks away,” he said.

The Swedish government said in mid-January it expected to European Investment Bank to make its decision in early March.

Both Saab and Volvo are in dire economic straits, but Saab is seen as being the one with the most serious woes, with an ageing product range and soaring costs.

Its owner GM is also the hardest hit of the three US carmakers by the global economic crisis.

Hägglund met with the heads of Ford and GM in Detroit on January 12 and said afterward the two were committed to cooperating with the Swedish state.

He made no comments about Volvo’s situation in Tuesday’s radio interview.

Both Ford and GM announced in early December that they planned to sell Volvo and Saab.