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Sweden reacts with dismay to Saab closure

TT/The Local · 18 Dec 2009, 16:12

Published: 18 Dec 2009 16:12 GMT+01:00

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Industry Minister Maud Olofsson described the news as "very bleak", while Left Party leader Lars Ohly, whose party is a junior member of the opposition Red-Green coalition, called for the government to be proactive.

"The important thing now is that the state pursues more proactive policies to stimulate investment, and that it is prepared to get involved in various projects itself in the next few years. State welfare projects have a strategic importance in this regard. The state has a very big responsibility for Trollhättan," he said.

Car industry expert Martin Sköld at the Stockholm School of Economics said the news was "depressing and tragic".

"But right from the start I had very little hope that it would be possible to find a buyer," he said.

"It is also a big loss for the country, when you think about all the knowledge and competence that has been built up over a long period."

Sköld said that the recession and the crisis in the car industry had turned out to be the final nail in Saab's coffin.

"We've been talking about either an established carmaker with financial muscles taking over a bleeding Saab, or a company like Koenigsegg or most recently Spyker with little financial muscle," Sköld said.

"International car sales have fallen steeply and in Saab's case they have been in free fall. It would have required huge amounts to get Saab on its feet again, and the brand has been seriously damaged as the company's crisis has worsened," he added.

Story continues below…

An iconic brand: Saab's history in pictures

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Your comments about this article

17:44 December 18, 2009 by krigeren

Dismay at a socialist system where the worker has little incentive to produce and only slight fears about being fired?

A society that accepts responsibility collectively but where the individual hides from responsibility?

There is a slight minority of industrious, hardworking, driven people who support the vast majority of laggards and hangers-on in this country.

Then we have the structure and design of the nation in terms of streamlining itself towards competitive advantage........only problem is its pointed against the wind.
19:21 December 18, 2009 by d_s
Another sermon from the disciples of the most holy Ayn Rand? :)

You are most constructive. Sir.
20:44 December 18, 2009 by krigeren
@d_s there is nothing ideological about it. Ideology is a series of lies and half truths packaged into something that is palatable for the common man. Its what gets John in America to enlist in the Marine Corps, its what gets Jonas in Sweden to strive for a Volvo, Villa, and Vov-vov.

Working in Sweden. Working with Swedes. Learning the system. Feeling the malaise overall thats where my opinion in the previous post comes from.

My opinion is pragmatic and in the context of the "developing world" lets just call them the world...well they have caught up and even surpassed in many respects the abilities of the Western world.

The sad thing is I know a good deal of hard working and talented Swedes who are rarely recognized and even their optimism can be diminished in a society which does not promote such optimism.
22:37 December 18, 2009 by Dr. Dillner
Well said, "Krigeren". I will not sob about Saab, it died for the exact reasons you state and, perhaps, a dwindling market share due to stodgy designs.
22:51 December 18, 2009 by GLO
Well said again..GM is in same condition, only we dropped good money down the toilet... Now Sweden can begin to look for the future, if you want to compete you need to set new conditions for for the World Market. Sorry thats what the real deal is.. Good Luck Friends.....
23:23 December 18, 2009 by wxman
Stuff happens in a socialist world. Another example of killing the goose that lays the golden egg.
23:48 December 18, 2009 by Stefan1
Saab is probably going to be sold to a chinese company and at the same time a chinese vendor is geting orders to supply a new 4G/LTE network in Sweden..



Well done Swedish government!

Why is noone protesting? Are the people here in hybernation like the bears in winter? I just wonder...
23:57 December 18, 2009 by anpasa
If I correctly assume that the above posts referring to "socialism" come from the perception that capitalism somehow offers a preferable alternative, I'll simply observe that the capitalist world has given us many examples of its inability to solve problems like poverty, universal health care & disease eradication, clean drinking water, demilitarization, etc. etc. etc. If we also consider that it may be more accurate to say that Sweden is only less capitalist that the US (my home) and not a bastion of socialist idealism, then the criticism--overt & implied--comes across as misplaced. (I mean, after all, if the Swedish government hasn't taken over Saab, just how socialist is it?)

Why not ask if it was GM's long history of incompetence, greed, and scorn for its employees killed Saab?

Of course, all of this ignores the very real impact the decision will have on Saab employees. If socialism means caring for ordinary men & women, people who work for a living and whose labor supports every economy in the world, then call me a socialist.
02:20 December 19, 2009 by BroX
@ 23:57 December 18, 2009 by anpasa

If socialism means caring for ordinary men & women, people who work for a living and whose labor supports every economy in the world, then call me a socialist.

07:25 December 19, 2009 by krigeren
@anpasa @brox

I think its important to avoid terminology such as capitalism or socialism. These key words mean different things to different people. The only way to really reach an understanding is to roll up our sleeves and get down to the gritty details of a given society and analyze it from there.

Its important to point out that their are other ways of developing economies with several social safety nets that offer more incentives to people as well.

Take a very close look at Sweden and Denmark. Denmark currently has a unemployment rate of 4.2 percent, less than half that of Sweden.

Denmark, while far from perfect, gives incentives to both employers and employees for working that are not afforded to Swedish workers and employers. (you can hire and fire people at will in Denmark unless its a mass firing...you cannot do that in Sweden)

Also important to point out Denmark in some circles views their unemployment rate as a mini crisis...they like a target of 3 percent. (Just 16 months ago unemployment there was in the 1 to 2 percent range).
08:24 December 19, 2009 by wenddiver
@krigeren- Having seen both countries, as an outsider if I had to invest money, I would have to say I would invest in Denmark, so I guess I agree with you.

Tonight a lot of Swedes are mad at GM, I myself don't like GM, but for different reasons.

But maybe we should consider this- when GM ran into trouble they went on hands and knees to begging to the US government and pretty much lost control of their company. The Obama administration took the company over in a bail out, if you were a private citizen invested in GM stock you lost everything. The stock is not even listed on the New York stock exchange. On the good side the company was saved, the workers homes and jobs still exist, their Union still exists. For this to continue they will have to sell cars. If they don't, they too will be gone.

GM went to the Canadian government and asked for concessions and assistance to keep their factorys going. Canada initually, balked, but realized it would be cheaper than paying the social benefits of their unemployed workers, those factorys, jobs and Unions were again saved.

The third country was Sweden, it's record was bought losing money and continued losing money, but GM took a loss for 20 years. Lookig at the first two cases, some loan guaratees, not actual money spent would have seemed very easy to obtain. The social benefits to the unemployed workers will definetly cost more long term. But one country and one country only became hard core Capitalists suddenly. A country famous for going around the world givig away money despite a small economy. Look at this newspapers headlines- Sweden pledges billions for climate change- YES, BUT NOTHING FOR HER OWN PEOPLE/SAAB WORKERS.
10:37 December 19, 2009 by krigeren

Good points about GM.

Its all short sighted. Bailing GM out is putting a band aid on a bullet wound.......

Their is no underpinning competitive advantage GM has in the world that says it will be a leader after the bailout.

My instincts tell me that we in the west are fat, lazy, and peaked out a few decades ago and that the up and comers of the world will take over and lead not with our permission but by their own will to.

I want to beleive my kids, all our kids, will have some inherent traits that will allow them to be competitive over the chinese and indians by the time they grow up...I am not sure what those inherent things are in 20 years and that whatever they may be the barriers to china, etc. duplicating them is quite low. i..e, our kids are all Mercedes Benz's that guzzle fuel and resources compared to their Indian counterparts who are.....increasingly...getting to the same destination but on a motorcyle....

We have some serious soul searching to do in the west and a lot of hard work ahead of us if we are to get our edge back and keep it sharp.
11:58 December 19, 2009 by bjinger
the closure of Saab and the sale of Volvo can only be interpretated that the management machanism and system within the companies have its own limits on the car industry in this competitive world.
15:42 December 19, 2009 by Markus D
Blaming either capitalism or socialism for the demise of Saab is not really intelligent.

Sweden´s authorities will work hard to help those Saab workers find new jobs and give stimulus to Trollhättan.

The all-mighty trade unions have crippled Saab´s profitablility for years.
00:43 December 20, 2009 by sean o d
What a sad day for Sweden,and its national prestige,at least

here in Western Europe.Saab was synonymous with forward looking innovation and the aspirations of a greener planet.You

have lost the opportunity of being at the forefront in the future of this endeavour.I will continue to drive my 2008 diesel 95,and dream of what could have been but wasnt.
08:39 December 20, 2009 by stevelewis
Has it not occured to anyone that GM may have ensured SAAB made a loss. It seems logical that GM would want to make a loss in Sweden in order to make a profit where the tax was cheaper. This if course does not mean it was making a loss across the board but does noy necessarily mean making a loss at SAAB. SAAB was purchased with the plan that GM would

1. standardise chassis and technology across their range, thus reducing R and D and production costs.

2. Produce more vehicles thus benefitting considerably from units of scale acquired in item 1.

They do not appear to have produced any more vehicles than they did in 1990, approx 100,000. (not considerably more at any rate) Yet have continued "to make a loss" despite massive improvements (and non improvements quality wise) in costs of component purchase and design (ALL SAABS since 1998 have had Vauxhall/Opel chassis, suspension and brake technology).

Does that not sound strange? Do you not ask how much SAAB Sweden has been paying for this 2nd rate technology from alternative GM plants where taxation may be lower. Why make a profit in a country where taxation may be higher or a country you have little interest in.

Why would Sweden bail out a company who may have given very little. I hope that a phoenix can arise from the ashes.
16:05 December 20, 2009 by gavas
Stevelewis, GM's other operations (mainly Chevrolet, Buick, GMC and Opel) have essentially been subsidizing Saab for the last 20 years. I love Saab (my 9-3 SportCombi is great!!), but the simple fact is that they are too expensive for what they are. While GM was making tons of money during the SUV craze era, it was no big deal to eat Saab's loss, while trying (wishing) to turn around the business. That's no longer acceptable. GM cut its much bigger Pontiac and Saturn divisions, why would it spare Saab? Sadly, when a product costs more to make than you can sell it for, then there is a big problem.
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