The Local have published a report stating that three out Sweden’s four main automotive manufacturers are about to get loans from the European Investment Bank.
Those three are Volvo Cars, Volvo Trucks and Scania.
Volvo Trucks and Scania will receive €400 million each on Thursday and Volvo Cars will get 200 million euros, Sveriges Radio reported on Wednesay.
“If all the paperwork is ready and all the conditions are met, we will make the payments,” Mats Gunnarsson, an EIB advisor who is processing the loans, told the radio station.
…..Gunnarsson said the EIB would not demand any guarantees for the loans to Volvo Trucks and Scania.
“These are two companies with very good credit-worthiness,” he stressed.
However, for Ford-owned Volvo Cars the EIB would demand guarantees from the Swedish state.
“For Volvo Cars we have been told that the government is ready to issue a state guarantee, even though the details aren’t wound up yet. In this case, it is a prerequisite for an EIB payment,” he said.
So what about Saab, who have also lodged a loan application with the EIB?
Gunnarsson said no decision had been made about a loan to Sweden’s other beleaguered car maker, General Motors-owned Saab Automobiles, which has launched a legal restructuring process in order to avoid bankruptcy after GM effectively abandoned the company to focus its own financial woes.
“There is still a great amount of uncertainty about whether (Saab) will receive state guarantees. We’re waiting for that uncertainty to be clarified,” he said.
The situation is that the EIB are waiting on guarantees from the Swedish government, who are waiting for Saab to find an investor.
I’m sorry if I’m going to sound like a broken record here, but this situation can be laid wholly at the feet of General Motors.
The reason why Volvo can get this loan, despite being a fatter and relatively inefficient organisation that’s yet to downscale it’s operations to meet the market, is because they have backing from Ford.
In Saab’s case, not only did GM provide relatively little investment over the years, they announced that they were going to cut Saab off. Their lack of commitment to seeing Saab sold off successfully was a knee-jerk reaction that’s now placed not only Saab, but GM themselves in danger.
Ford organised finance several years ago, which is why they’re not going hat-in-hand to governments everywhere at the moment. They’re also producing a more desireable range of cars, which doesn’t hurt. This relative strength means that they can hold on to Volvo until the right buyer comes along.
GM have consistently lost money and are in panic mode. They tried to dump Saab, to wash their hands of it and now we’re seeing the consequences.
Ford’s organisation with Volvo gets the job done. GM’s lack of care with Saab sees them struggle.
As frustrating as it may be to have to deal with and listen to Maud Olofsson, the root cause of this problem is the lack of ownership interest GM’s had in Saab for the last 19 years.
The sooner it ends, the better.
I hope those investors that Saab are talking to are serious and that one of them is willing to step in soon. Via WooDz, Autocar are apparently reporting that the pool of loan funds available from the EIB is no bottomless pit.
I hope Saab gets their house sufficiently in order soon.