Sweden’s government will try to help Saab Automobile AB’s last plant in the country win a fierce contest with an Opel plant in Germany to produce midsize cars in the future for General Motors, government officials told the Associated Press (AP).

While both the Swedish and German governments are prohibited by EU regulations from offering up subsidies, Sweden can invest more money in infrastructure, product research and development in order to convince GM to keep production in Trollhaettan, Sven-Erik Soeder, state secretary for the Ministry of Industry, Employment and Communications, told the news agency.

However, Soeder reportedly declined to say how much money the government would spend helping Saab and emphasised that it’s up to the plant to ensure its own survival.

“For this to work out for Saab, the deciding factor will be that Saab themselves can present a good offer,” Soeder said. “What we can do is improve it in the margins.”

The Associated Press noted that GM decided last month that the production of mid-sized cars in Europe, currently divided between a Saab plant in Trollhaettan and an Opel factory in Ruesselsheim, Germany, should all be handled by the same plant.

The decision has sparked a fierce fight for survival between both plants, as they have until next year to convince GM it should be picked for the job. The losing plant risks massive layoffs, or perhaps even a complete shutdown.

“This is globalisation in real life,” Soeder reportedly said. “It’s no longer just companies competing with each other, but countries, and in this case even two towns.”

Prime Minister Goeran Persson, who has also said his government will try to help, plans to meet with GM Europe’s executives in Switzerland on Oct. 29 to discuss the situation, his office told AP.

The report said that, last week, GM announced plans to cut 12,000 jobs on the continent by the end of 2006, mostly in Germany but also more than 500 jobs at the Trollhaettan plant. The decision caused thousands of German workers to go on a six-day strike that ended on Wednesday.

According to AP, in Trollhaettan, the union staged two hour-long information meetings on Tuesday to hold up production in protest. According to the union’s bargaining agreement, it has the right to hold four such information meetings a year.

Goeran Johnsson, head of Sweden’s Metall industrial union, told the Associated Press on Wednesday the measure could send a message to GM that Swedish workers are more likely to resolve issues without resorting to strikes.

“That was the Swedish way to handle it,” he reportedly said.