Sweden eyes guarantees to struggling carmakers
STOCKHOLM (Reuters) - Sweden said on Monday its talks with struggling carmakers Saab and Volvo included loan guarantees, but said no specific sum had been discussed.
Financial Times reported on Monday that U.S. carmakers GM (GM.N), which owns Saab Automobile AB, and Ford (F.N), owner of Volvo Car Corporation, had approached the Nordic country's government about financial aid to the Sweden-based subsidiaries "in anticipation of selling them."
The heads of both companies had spoken to Swedish Industry Minister Maud Olofsson about securing funds, the FT said, citing people familiar with the discussions.
Sweden denied it had outlined any details concerning loan guarantees. FT said the Swedish government has considered devoting about 2 billion Swedish crowns ($252 million) to Saab and Volvo in direct aid or loan guarantees.
"We are discussing all possibilities. But what they write, that specific amount of money in loan guarantees, that is haphazard information taken out of context and I don't understand where they've gotten it from," said Frank Nilsson, spokesman for the industry minister.
Both Saab and Volvo have suffered sharp sales declines in recent months as the global financial crisis has weighed on prospective car buyers across the world.
"It is no secret that we are speaking to Volvo and Saab, but nothing has come out of these talks," Nilsson said.
The Swedish government believed it was important that Volvo and Saab remain based in Sweden, Nilsson said, noting the government was considering many different options.
He said the government was considering two sets of measures to help the country's struggling auto industry.
One was ensuring Volvo's and Saab's long-term sustainability by facilitating efforts to build fuel-efficient cars with an environmental profile that are likely to be in demand in the coming years.
Sweden was also eyeing measures to boost the country's car market, which data from industry body Bil Sweden earlier on Monday showed slid 36 percent last month, the sharpest monthly fall since 1993.
Measures might include incentives to scrap old cars and replace them with new vehicles, Nilsson said.
Last week, Olofsson said Sweden wanted clarity about the plans of Volvo's and Saab's U.S. parent companies before any financial support was considered.
Volvo Cars said it was in talks with the Swedish government. "We are in dialogue with the government on some issues, and they listen to us and understand our situation," Volvo Cars spokeswoman Maria Bohlin said, declining to comment further.
Saab also said it was in talks with the Swedish government, also about guarantees.
"We have had a lot of discussions with the government, about different scenarios, about what happens if this economic crisis doesn't turn around soon. And, yes, guarantees," Saab spokesman Eric Geers said.
"We have definitely not mentioned any sum of money."
Geers said he had not heard anything from GM that implied a sale of Saab Automobile.
"We know that we have full support from GM in terms of Saab as a brand ... (but) it is a question for the owners. We are working as usual and prepare for next year's launch," he said.
(Reporting by Victoria Klesty and Johan Sennero; Editing by Andrew Macdonald)
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