Sweden won't take over Saab or Volvo: official

Volvo's S60 concept vehicle is displayed at the North American International Auto Show in Detroit January 11, 2009.

DETROIT (Reuters) - The Swedish government will not take stakes in either Saab or Volvo from General Motors Corp GM.N or Ford Motor Co (F.N) nor does it plan more aid for either Swedish automaker, a senior official said on Monday.

"I made it clear to General Motors and Ford that under no circumstances will there be a way that the Swedish government, the Swedish state, will become an owner of either Volvo or Saab," Joran Hagglund, state secretary of the Swedish Industry Ministry, told reporters at the Detroit auto show.

"They (GM and Ford) have to take the full responsibility for the actions that have to be taken to secure good futures for the brands of Saab and Volvo," Hagglund said.

He stressed that aid for both Swedish car makers would be contingent on the money being spent in Sweden and would be based on ensuring their future viability and profitability.

In December, the center-right Swedish government said it would provide up to 25 billion crowns ($3.1 billion) in credit guarantees and emergency loans to its ailing auto industry.

Both Volvo and Saab have been losing money. GM vice chairman Bob Lutz said on Sunday that Saab had not been profitable in the nearly two decades GM has owned the company.

"Frankly they've been on GM life support," Lutz said.

When the aid program was unveiled in December, the Swedish government said it had no plans to buy stakes in Volvo -- owned by Ford -- or Saab -- owned by GM.

Hagglund said there were "no discussions" on any further aid for the Swedish car makers.

The state secretary was in Detroit to talk GM and Ford about the Swedish government's aid program for Saab and Volvo find out more about the U.S. automakers' plans for the units.

'NO POLITICAL, IDEOLOGICAL' AGENDA

Hagglund said he was "aware of the different discussions" GM and Ford were holding to sell Volvo and Saab, but said the government had no political agenda concerning the new owners.

"We don't have any political or ideological point of view of who will be the new owners," Hagglund said. "We are certainly interested in whether the owners have a knowledge of the industrial sector, manufacturing, do they have a long-term commitment to these brands, questions like that."

"It will be rather stupid of the Swedish government to start all these processes by stating that under no circumstances can we accept that buyer or that buyer," he added.

Ford Chief Executive Alan Mulally said on Sunday the No. 2 U.S. automaker had been approached by several potential bidders for Volvo, while GM's European head, Carl-Peter Foster, said the automaker had been approached two or three months ago by an investor looking to acquire Saab.

U.S. auto sales dropped by 18 percent in 2008, pushing both GM and Chrysler -- owned by private equity firm Cerberus Capital Management LP CBS.UL -- to the brink of collapse. Both have received aid from the U.S. government through a $17.4 billion bailout in the form of emergency loans. Ford has not sought federal loans, but is asking for a $9 billion credit line it could tap if conditions worsen.

Hagglund said one condition of the Swedish aid to GM is that it 'carve out' the Saab unit as a separate entity for a possible sale to a new owner.

"I believe that General Motors (has) to in one way or another carve out Saab as a stand-alone entity that will be salable," Hagglund said. "That's the first step."

Hagglund also said his government's main interest was that Saab and Volvo projects receiving aid "will be run in Sweden.

"We have discussions together with them (Volvo and Saab) where they have presented us proposals for different projects, also up to different limits of money, but it's too early for me to stand here and say what that will be," Hagglund said.

One of the conditions for received aid is that Saab and Volvo must also become profitable.

Ford bought Volvo in 1999 for $6.45 billion. Volvo lost $484 million, before taxes, in the third quarter of 2008, according to a regulatory filing.

GM shared ownership of Saab with the Swedish holding company Investor AB since 1990, bought the 48 percent it did not already own in 2000 for an undisclosed sum.

$1 = 8.05 Swedish crowns

(Editing by Matthew Lewis, Leslie Gevirtz)