Sweden’s government has ruled out taking over Volvo Cars if Ford decides to sell it but the opposition and unions want politicians to step in and save the country’s auto industry.
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“It’s not in our industrial policy to own carmakers and we will not jeopardise taxpayers’ money,” enterprise and energy minister Maud Olofsson told the Dagens Nyheter daily paper on Tuesday, according to Reuters.
The centre-right government has instead pursued a policy of selling state assets since it came to power in 2006, the report added.
“We need to look at what the government can do without jeopardising taxpayers’ money,” Olofsson said.
Ford said on Monday it was considering selling Volvo ahead of a ‘Detroit Three’ bid for government-backed low-cost loans.
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By GlobalDataToday the automaker said it was asking Congress for access to up to $9bn in bridge financing, but reiterated that it hopes to complete restructuring without drawing on any loan the government makes available.
Volvo Cars, which Volvo Group sold to Ford in 1999, has been hit hard by declining sales, as interest for its big, costly models dwindles, Reuters noted.
While a final decision on a sale is not expected for several months, there is already fevered speculation about possible buyers, with BMW and Renault suggested, the report said.
“Selling car companies in the midst of this financial crisis is hard,” Olofsson said.
The car industry accounts for 15% of Sweden’s exports and, with some 700 companies and suppliers, employs about 140,000 people, Reuters said.
General Motors is expected soon to announce a possible sale of Saab, which it has fully-owned since 2000, and Sweden’s opposition has called on the government to reconsider its position.
“I think the crisis is too serious and the risks are too big to not intervene,” Mona Sahlin, the head of the Social Democratic party that has dominated local politics in the post-war period, told Swedish news agency TT. She said the state should consider stepping in as a temporary owner, a move supported by a majority in a weekend poll.
She noted that France would soon announce plans to support its automotive industry.
Olofsson said: “These two companies are running at a loss of about SKR11bn (EUR1.05bn or $US1.3bn) a year. We would have to get the companies to break even and then invest to produce new cars that would have to be marketed and sold. Who can say that that kind of ownership is temporary?”
Metal workers’ union officials were angry at the government’s position, the report added.
Volvo announced earlier this year it would axe 6,000 jobs, including 3,900 in Sweden, of 24,400 employees worldwide.
