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Sweden seeks clarity on carmakers

2008-11-25 07:07

Stockholm - The Swedish government on Monday ruled out any financial support for the Nordic country's crisis-hit automakers Volvo Car Corp and Saab Automobiles until the intentions of their US parent companies became clear.

Ford-owned Volvo Car Corporation and Saab, owned by General Motors , have seen sales plummet in recent months while their struggling parent companies have sought a bailout from the US government to stave off bankruptcy.

Enterprise Minister Maud Olofsson said the government sought to gain a clearer picture of the situation facing the two carmakers before any economic assistance was considered.

"What will Ford and GM do? Will Ford and GM move forward with Saab and Volvo? Will they develop new car models?" Olofsson told journalists.

"We could be a party to research and development. That is what several other governments are discussing," she said, adding that other forms of direct aid were likely to run counter to EU competition legislation.

The comments came amid growing calls for the government to take action in support of the carmakers, seen as pillars of the Nordic country's engineering industry and vital for the survival of a broad swath of suppliers.

The plight of the US "Big Three" automakers - Ford, General Motors and Chrysler - has led to scattered calls in Sweden for the government to consider taking over the carmakers that for decades have been standard-bearers of the country's export-oriented industrial sector.

In Monday's issue of business daily Dagens Industri, Rolf Wolff, principle of the school of business at Gothenburg University, called on the government to nationalise Volvo to safeguard the pool of knowledge on which the industry is based. Volvo Cars is headquartered in Gothenburg, an important hub for the country's industry on Sweden's west coast.

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