Swedish government rejects Saab plan

The Swedish government has rejected US carmaker General Motors' reconstruction plan for its Saab subsidiary as "unsustainable".

Swedish government rejects Saab plan

An upbeat Saab CEO Jan Åke Jonsson presented a reconstruction plan designed to save the beleaguered Swedish car firm in Trollhättan on Friday afternoon, hours after a Swedish court had granted the firm protection from creditors.

“We hope that the 27 billion kronor ($3 billion) rescue package that the parliament has approved will be of use to the automotive industry and together with GM’s contribution we have the possibility of getting through this,” Jonsson said to news agency TT.

But Swedish Industry Minister Maud Olofsson argued that the reconstruction plan presented by GM is “unsustainable” and thereby ruled out the prospect of Saab taking advantage of the rescue package of loan guarantees.

“A sustainable business plan is required which offers the prospect of profit with a reasonable time frame,” Olofsson said on Friday afternoon.

Saab, which reported a loss of three billion kronor ($249 million) for 2008, received the green light for a reconstruction from Vänersborg district court on Friday.

According to the plan Saab would become independent, increase volumes and concentrate production to Trollhättan.

The reconstruction is aimed at saving the troubled firm from bankruptcy and creditors will be required to cut their demands. Staff cuts have not been ruled out.

Saab employs about 4,100 people in Sweden, 3,700 of whom work in Trollhättan. Reports indicate that a further 15,000 jobs at the firm’s suppliers could also be at risk.

A broad chorus of opinion in the Swedish media on Saturday considerered the reconstruction to be simply an ordered bankruptcy with little prospect of the new capital required to save the firm.

“The company can’t pay its debts. Saab is bankrupt, slut, finito, finished and kaput,” Svenska Dagbladet analyst Nils-Olof Ollevik wrote on Saturday.

The loss of Saab would be a significant blow to the pride of the Sweden but a distinct air of inevitability surrounds the firm’s future and recent polls indicate broad support for the government’s position.


Norwegian’s subsidiaries in Denmark and Sweden go bankrupt

The struggling low-cost airline Norwegian has reported its staffing subsidiaries in Denmark and Sweden have filed for bankruptcy, meaning roughly three quarters of its pilots and crew will lose their jobs.

Norwegian's subsidiaries in Denmark and Sweden go bankrupt
A Norwegian Air Shuttle plane: Photo: Norwegian

In a press release issued on Monday afternoon, the airline said that the financial support packages offered by the Swedish and Danish government had not been sufficiently generous to keep the subsidiaries which employ pilots and cabin crew in the two countries solvent. 

”The impact the Coronavirus has had on the airline industry is unprecedented. We have done everything we can to avoid making this last-resort decision and we have asked for access to government support in both Sweden and Denmark”, said Norwegian's chief executive Jacob Schram in the statement.  

“Our pilots and cabin crew are the core of our business and they have done a fantastic job for many years.”

“It is heart-breaking that our Swedish and Danish pilot and cabin crew subsidiaries now are forced to file for bankruptcy, and I’m truly sorry for the consequences this will have for our colleagues,”  Norwegian's chief executive Jacob Schram said in the statement.  

“We are working around the clock to get through this crisis and to return as a stronger Norwegian with the goal of bringing as many colleagues back in the air as possible.”

The company said it was also immediately ending staffing deals with the OSM Aviation, which supplies it with crew based in Spain, UK, Finland, Sweden and the US.

The company said that 1,571 pilots and 3,134 cabin crew would be affected by the move, with only the 700 pilots and 1,300 cabin crew based in Norway, France and Italy being kept on.

In the release, the company blamed the “the lack of significant financial support” from the Swedish and Danish governments, which it contrasted with that of Norway, which has agreed to pay “all salary related costs” while staff are furloughed. 

The companies declared bankrupt include: 
Norwegian Pilot Services Sweden AB
Norwegian Pilot Services Denmark ApS
Norwegian Cabin Services Denmark ApS
Norwegian Air Resources Denmark LH ApS