One view rapidly gaining ground in Sweden is the government could have done more – a lot more – to come to the rescue of bankrupt Saab.
At the end of the day argue the critics, Sweden has lost an icon that is instantly recognisable around the world, with a resulting flight of manufacturing competence out of the country that will be increasingly hard to replace.
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But in an auto environment increasingly suffering from chronic over-capacity, does artificially or otherwise trying to keep a failing brand afloat make any sense?
I’ve been in Sweden this week taking the auto temperature, talking to suppliers and politicians, as well as visiting Saab’s windswept and empty plant in Trollhattan. The very firm view expressed to me was that it most definitely did make sense to have done more to save Saab.
The automaker may yet escape final liquidation of course if the Chinese for example, can overcome the seemingly myriad hurdles to refloat, but in any case the issue has stirred up a hornets nest of controversy about the rights and wrongs of stepping in to help an ailing business.
Here in the UK, former deputy Prime Minister Michael Heseltine once famously declared he would intervene ‘morning, noon and night’ to aid British industry, but the centre-right Swedish government appears to have adopted a distinctly hands-off approach when it comes to bailing out suffering Saab, if you believe opposition politicians.
“The [Swedish] government could have done a lot more then they have,” Trollhattan mayor Paul Akerlund told me in his office. “When the crisis started in 2008, there was a crisis everywhere in the whole world. Every government tried to find a solution to help their car industries, but our government does not do that.
“They have a very, very strange position. For example [German Chancellor Angela] Merkel is not a social democrat and neither is [French President Nicolas] Sarkozy, [while] the US – the biggest capitalist country in the world helps its car industries.”
Akerlund is clearly no fan of the current Swedish administration – politically he seems diametrically opposed to its policies – but in fairness he is on the front line in a town of around 50,000 that is facing potentially huge numbers of unemployed among its ranks.
Indeed, Swedish unions tell me of a jobless rate approaching 25%, while workers in Trollhattan related just how hard hard the town has been by Saab’s collapse. Take this from one restaurant-goer in the centre who, when I asked him if he knew people who had been made redundant, he replied: “Just go outside and pick anyone.”
Or this from a worker in a café: “People think about their children first and buy food for them,” she says to me between clearing up after the – few – customers. “When Saab was open, people came with their children but now, no.”
There is obviously substantial fall-out from any bankruptcy but in town the size of Trollhattan and in a country the size of Sweden – population wise – 10,000 newly-redundant workers is an enormous figure.
The Swedish government argues it underwrote a huge Saab loan made by the European Investment Bank of EUR400m (US$527m), but this is met by short shrift by Scandinavian supplier body FKG, whose managing director, Fredrik Sidahl, I met in his Gothenburg offices this week.
“The [loan] guarantee – what is the risk?” he told me, adding pithily: “The [Swedish] government did not understand the value of Saab beyond Saab as a company. They [government] are restricted by rules, but they could have interpreted the European rules in a more positive way.”
Intervention is a highly-emotive word – especially when taxpayers’ money is involved. But could the Swedish government have done more, should they have done more to help stricken Saab?
There is a rising tide of opinion they absolutely should have done a lot more.
