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Reinfeldt fobs off Koenigsegg Saab plea

Peter Vinthagen Simpson · 20 Aug 2009, 15:50

Published: 20 Aug 2009 15:50 GMT+02:00

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"I am not prepared to put Sweden in hock and act as a venture capitalist for the well-heeled," Reinfeldt said in a press conference on Wednesday.

Reinfeldt was backed up by the enterprise minister, Maud Olofsson, in rejecting Koenigsegg Group's call for a bridging loan to make up the reported 3 billion kronor ($419 million) gap in their financing to complete the deal.

The Local reported on Tuesday that ailing US car firm General Motors had confirmed the signing of a stock purchase agreement with the Koenigsegg Group regarding the sale of Saab Automobile to the Swedish-led consortium.

With reports emerging that there remained significant financial obstacles to be overcome before completing the deal, Christian von Koenigsegg called on the Swedish state to provide the loans.

"We see this as a deal between three parties; General Motors, Koenigsegg Group and the Swedish state," he said to the Svenska Dagbladet (SvD) newspaper.

Reinfeldt reacted angrily when the subject came up at a press conference on Wednesday.

"There are those trying to change the way companies should be run in Sweden. Firstly, the buyer stumps up insufficient funds. Then the venture capital and credit markets...decline to join in. And then the state is left there as the largest venture capitalist of them all, who with welfare money should go in and assume the risk that no one else wants to take," Reinfeldt said.

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The opposition Social Democrats have by way of a response accused the government of inaction.

"The government has, for ideological reasons, decided not to act. In other countries the state exerts itself to save jobs," party spokesperson Tomas Eneroth said, who claimed that 12,000 jobs were on the line.

Peter Vinthagen Simpson (news@thelocal.se)

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Your comments about this article

09:45 August 21, 2009 by ooh456
Reinfeldt is making the right decision here. Saab is not a viable company in today's world economy and the company would just take the money from the government and go out of business in a year or so ( like GM did ). If Sweden wants to invest its money... I can think of lot's of other safer bets to secure Swedish jobs. In 10 years, no matter how large the investment, the jobs and company are doomed.
12:27 August 21, 2009 by gobstopper
I love my Saab and really look forward to trading it in for the first new model rolling out of Sweden.

But I agree with Reinfeldt: Sweden should not pour state money into the deal.

GM is asking too much. Let the open market decide what Saab is really worth.

Incidentally, it is of value only if production continues in Sweden. If production moves to Germany - what's the point? - switch to BMW or Merc. The Swedish national identity is essential to the brand. If it was built anywhere else I wouldn't buy one, any more than I'd buy Scottish vodka.
14:39 August 21, 2009 by murraybaum
II'm of the opinion corporate business decisions and government entities don't generally culturally align well. It's unreasonable to expect Reinfelt's government to act as their personal financial safety net when the going gets a little tough. If you set the precedence, then every company or iconic brand in sweden could request financial assistance from the government authorities. There is absolutely a moral issue that requires debate and assurances that 12000 jobs will be protected. The government has a role to play in protecting these employees and potentially could look at financial incentives to off set the situation. GM are focused on what is right for GM and I would question the value isn't there and and the market should determine the price.
23:41 August 21, 2009 by Coalbanks
Good point. Here in Canada we bailed out GM hoping to prevent job losses in one of the major industries in Canada but I doubt we will ever be repaid or that there won't be job losses. GM has over-priced SAAB - let the market decide it's value. If that means SAAB becomes a German or Indian or Chinese product you might help a Swedish buyer to prevent job losses but where's your payback?
04:51 August 25, 2009 by falcon
I support government funding for the right group - Koenigsegg isn't the right group. Saab needs a purchaser well educated in turnarounds, finance, and manufacturing - this makes the risk more palatable. I don't blame the government for insisting the inexperienced group put in far more of their own money. The longer this takes, the more SAAB suffers. A shame.

Move on to a better buyer.
09:28 August 28, 2009 by ameribrit
@ gobstopper, "Scottish vodka? one of the best analogy's I've heard. ROFL. Thanks for that.

And Oh yea! Reinfeldt has got it right this time.
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