Just Auto Article On The Swedish Government

March 24, 2012 in Editorial, News

For a long time now we have all heard or thought to ourselves that the Swedish Government should have or could have done more to help save Saab. Being in North America and watching what the North American manufacturer’s went through with bailouts and how committed the Government’s in Canada and the USA were to ensuring the continued manufacturing and support of jobs, it’s always puzzled me how the Swedish government seemed to not even recognize what the impact of lost jobs could have. Now one of the editor’s at Just Auto, Simon Warburton has done a good job of covering this with key people involved. Below is some of the highlights of their article.

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.

I would even add to the above that it would be more than increasingly hard to be replaced, for Sweden, I would say it would be impossible to replace.

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.

Remember that this is not one of us at SaabsUnited saying that it makes sense to have done more to save Saab, this is an independent view of ours and for me it is nice to see a source other then myself seeing it this way.

“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.”

Just how big of a problem is all this? Mr. Warburton digs deeper into the jobless rate and impact on the area when speaking to the Swedish unions. To think that the number of qualified worker’s in the auto sector that are unemployed is just unbelievable.

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.”

That one line there “just go outside and pick anyone”, that hits pretty hard. I don’t think many of us can imagine or even comprehend what that would be like or feel like. If you look at your home town and think that it’s main industry shuts down and just how badly it hurts everything around it. I personally can’t imagine because where I am we don’t rely so heavily on any one industry. From what I understand of the area, you have shop owners who are struggling to keep their business because people aren’t buying and it goes so much deeper to even daycare providers who have no kids to care for because the families they were caring for are now out of work.

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.

10,000 newly-redundant workers? In a town the size of Trollhattan, with a population last recorded in 2010 of 55,027 people, everyone knows someone affected. That’s almost 20% of the entire city being out of work. Look up population records for small towns around you and you will be surprised at how a 20% unemployment rate could cripple such a town.

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.

I think he sums things up quite well and I fully agree that they should have done a lot more and it’s never to late to do something. I tire of governments trying to make it look like they are only doing what they can or are doing everything in their powers when to me it appears they are doing nothing.

The full article from can be found here at Just Auto, it is a subscription site so you may need to register to read it all.

11 responses to Just Auto Article On The Swedish Government

  1. governments !! who would have them ?…..check this out….UK send over £1 billion to India in overseas aid every year, what are India doing ?….building the worlds largest aircraft carrier, work that one out…… Swedish government, get your finger out

  2. URGENT INFO

    SAAB DOCUMENTARY IN SWEDISH CHANNEL 9 IN THE TOP GEAR PROGRAM
    SAT. MARCH 24 AT 14.50
    SUN MARCH 25 AT 23.55

    Orig. program was aired on March 20 and will be repeated on above timings.

    It’s a historical documentary in order to honor the memory of Saab.
    The persons behind this documentary are the UK motor enthusiasts
    Jeremy Clarkson and James May.

    Maybe it would be great if the Saab Museum in Trollhättan could get hold of a copy with swedish translation of this documentary if you do not already have it, and obtain
    permission from the TV Channel or the owners/people behind this documentary to show it to visitors few times per day on set timings during museum opening hours, or just having it rolling on a screen whenever you have got visitors inside the museum.

  3. In this case I have no trust in the SweGov. They must have known about the upcoming unemployment and they accepted it. What a shame. The will to destroy the previous Saab must have been the more important factor. Let´s see what will happen, it is not too late for a little help …

    • They must have calculated that the good people in Trollhättan were never going to vote for them anyway, so the loss to the voting force could be minimal. Or something to that effect.
      They claim to be the new “workers party”, stealing the slogan from the social democrats. But who are the workers they claim to represent?? Bank managers?

      I myself Will Not Vote For This Government. Never!
      Not after this. >:-(

  4. Frankly I cannot understand how come they haven’t been able to put together a Swedish/Scandinavia consortium to buy the whole of Saab? I see no reason why the brand couldn’t become competitive ones they’d start producing the famous Saab-Saabs on a new flexible platform. Since even the GM-era Saabs have been able to compete with German manufacturers to this date.
    It’s not the 80′s anymore when Saab production couldn’t compete with the robots in Japan…

    And what kind of country lets a company like this fade away when EU desperately needs manufacturing industry to keep the standard of living we’re so accustomed to.
    How many start-up businesses can generate a turnover worth billions of SEK in the first year the minute the factory starts running? SAAB should be finally treated as one by the Swe Govt. I sure hope Ministry of Enterprise has the eye on the ball with this one.

    It’s the export profits that makes a nation wealthy. Just look at China (and Sweden) if you don’t believe me.

  5. Very hard lesson to learn.

    We have been saying for quite sometime what a disaster this would be for Sweden and Scandinavia. We have seen it in the US for quite sometime.

    In the globalization model, in an attempt to cut costs, the global corporation cuts jobs and in doing so, cuts out some of its best customers, since often employees are the most loyal customers. Well paid employees are necessary to have a good customer base, a loyal base, and promoters of good will. Their wages (or their lost wages) ripple through the economic base of a locale.

    Globalization really eats at the fabric of a local society; it causes the loss of good workers, competent workers, and the loss of a technical knowledge base.

    Governments have to fight globalization or their people suffer tremendously. Workers can’t do it by themselves. Why politicians don’t get this, I will never understand.

    • One way to see things. Another, entirely different approach would be to find fair and balanced currency exchange rates. As long as e.g. a tomato does not cost equivalent amounts everywhere in the world (which could for example mean that an average worker had to work for 5 minutes to buy one), there is no fair exchange. After this, of course, goods from China would be much more expensive, and products from Europe would be cheaper.

      Looking at history, the currencies helped the industrialized states to ge cheap raw materials for a long time, and later on, cheap simple products. Only in the last 10 to 15 years, this has changed. However, it is now no longer in the interest of developing countries to modify the exchange rates (and would also be unfair).

  6. Obviously the Swedish Government thought Trollhättan was a fictional place, not a town of real people many of whom were depending on their government to be proactive in their cause.

  7. Jason:
    As a fellow north American I can’t agree more with your point. Did the Swedish govt. really think that they could replace the all the jobs lost with Saab’s demise? Have they been able too? How many people are still out of work? Did all of them recieve jobs at the same wage level? I could not believe the Swedish govt didn’t do anything in the last year. For social democrats they came off as neo-classic economists, a point of view completely discredited by Keynes, and which no one follows today in actual practice, besides the Swedish govt. It is just hard to believe!

    • Some of the workers got new job in Norway ..I heard, not confermed.

      “”For the Swedish Government, it was so unlikely that something like this would happen SAAB ……that in never really have happen. If it was to happen,……it’ so small chanses …. that it probably did not happen anyway.”"

      It costs Swedish government significantly more in the end that Saab gone bankrupt than if they bought the whole factory and secured the jobs of our employees and subcontractors who are also affected. If there are 30 people at SAAB, which may go, it’s probably all cases 1-2 with a subcontractor who become unemployed.

      knowledge comes when reality comes true, and math has not been on the strong side for them.

      “WISE AFTER THE EVENT”

    • “For social democrats”. Mh, not sure what you mean. The Swedish government is not social democratic. That is probably, why they have to stick so fast to the liberal principles of capitalism, just for a change from the previous government.

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