Dear Mr Reinfeldt,
This week has been a disaster for Saab, the Swedish automotive industry and potentially it may prove to have been a disaster for you politically as well.
I should know. When I’m not writing about Saabs, I’m involved 9-to-5 in the risk management arena and right now, what you’re facing in western Sweden is a great big supersized American serving of “not good”. And none of it will be fixed by windfarms or any other green pipe dreams if this thing goes south.
If and when the 5-figure number of people potentially affected by a Saab closure hit the unemployment lines, there’s not a single policy in your armory that’ll help. Philosophy doesn’t put food on the table, Mr Reinfeldt.
But it’s not too late.
I read a story on Bloomberg this morning with some distress:
The Swedish government is not preparing to relax the rules of state rescue loans to provide funding for Saab Automobile AB, a government official said.
Saab, whose future may be decided by owner General Motors Co. next week, has asked the Swedish government to make as much as 5 billion kronor ($717 million) available in emergency loans, and to inform GM of this before a board meeting on Dec. 1. A government delegation will travel to the U.S. for talks with GM before the meeting.
Sweden is unlikely to relax its rules, Hans Pettersson, a deputy director at Sweden’s Enterprise Ministry who will be part of the group visiting GM, said in a telephone interview today.
Saab was one of several brands the U.S. carmaker planned to unload to focus on its restructuring after emerging from bankruptcy. GM may shut Saab after a sale to sports-car maker Koenigsegg Group AB failed. GM could also decide to keep Saab.
“It’s easy to propose things, but unfortunately it’s not so easy to carry them out,” Pettersson said. “We are not preparing right now for a new parliamentary decision. That the parliament would make a decision by Tuesday is not very likely.”
A decision by the Swedish legislature is necessary to relax rules which stipulate that loans must be repaid in six months — a condition Saab and others have criticized as unrealistic.
Personally, I’m hopeful that a deal can be struck where Saab doesn’t need support from your government in order to transfer to a new owner. I hope they get that support from GM, who could relax their self-imposed December 31 deadline a little in the interests of success. But if a strong owner is found and some help is needed, then my question is this – why wouldn’t you do what you can to help make that a reality?
The Koenigsegg Group recently had to withdraw from their deal to buy Saab and all available information suggests that they had a plan in motion that the various parties involved couldn’t meet. As all the risks were on Koenigsegg Group’s shoulders and others were dragging their feet, the plan became too risky and they made the difficult choice to withdraw rather then remain tied to an open-ended affair where they had little control but all responsibility.
If you were to go through and audit the various government departments involved in that deal, Mr Reinfeldt, would you come up with an outcome that suggests the government’s role in this affair was carried out efficiently? Could you confidently look the Swedish people in the eye and tell them that none of the timing issues the Koenigsegg Group were due to government delays or what was clearly an initial lack of confidence in the Koenigsegg Group as a buyer?
There are almost 4,000 jobs tied directly to Saab and maybe as many as another 10,000 jobs indirectly. Then there’s the various associations with Volvo through supply chains and co-operative research. There’s the various universities and design schools that have associations with both Saab and Volvo (you’re into education, right?).
There’s a heck of a lot at stake here.
Then there’s Saab itself, what they build and what they plan to do in the future. Saab’s business plan has been reviewed by some of your own people. It’s been reviewed by the EIB, by accounting firm KPMG and probably by a few other bodies we don’t know about. It’s been found to be not without risk, but quite viable.
Saab have a great core of engineers, great research into future technologies and one of the most efficient factories in the car-making world.
SAAB CAN DESIGN AND BUILD CARS THAT PEOPLE WANT.
Saab have exciting new models that are literally on the doorstep. In fact, Saab began production of the first of these on the very same day the Koenigsegg announcement was made. The new Saab 9-5 is here, with the wagon and the 9-4x to follow.
Mr Reinfeldt, what Saab are asking for is not unreasonable and falls a long way short of the extent other countries have gone to in order to protect their automotive industries.
What they seem to be asking for is simple – a relaxation of a deadline. You can keep your onerous security requirements that would make it hard for them to access finance elsewhere, but just relax the payback date a little.
And remember, this is only if it is required. All Saab are asking is for one of your delegates to sit in a room in Detroit next week and tell GM that help is available if absolutely necessary.
No child need go without a text book and no aged person without an aspirin. It’s just a little help to keep 15,000 or so people involved in the manufacturing of a car that your country not only earns income from, but can also be proud of.
It might just help you politically, as well, which I know is a big motivating factor for someone in your line of work.
Related: this piece from TTELA outlines the type of assistance that could be made available, is within EU rules, and it totally possible IF the Swedish government would choose to go down this path rather than maintain their extremely hardline stance.
Also, this piece isn’t meant to imply that the Swedish government are totally lax when it comes to Saab. They are sending a delegation to Detroit prior to Tuesday’s GM board meeting and they have been helpful in other ways.
As a Saab enthusiast, I’m grateful for this. But I also recognise that more could be done, that it could be done quicker and that the consequences if Saab fails will be bigger for Sweden than many realise.