Identifier
Created
Classification
Origin
09STOCKHOLM216
2009-03-27 15:40:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Stockholm
Cable title:  

SWEDISH AUTO INDUSTRY ENTERS CRITICAL PHASE

Tags:  ECON EIND ETRD ELTN PGOV SW 
pdf how-to read a cable
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DE RUEHSM #0216 0861540
ZNR UUUUU ZZH
O 271540Z MAR 09
FM AMEMBASSY STOCKHOLM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4262
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RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
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UNCLAS STOCKHOLM 000216 

SENSITIVE
SIPDIS

TREASURY FOR RON BLOOM

E.O. 12958: N/A
TAGS: ECON EIND ETRD ELTN PGOV SW
SUBJECT: SWEDISH AUTO INDUSTRY ENTERS CRITICAL PHASE

REF: A. STOCKHOLM 207

B. STOCKHOLM 076

UNCLAS STOCKHOLM 000216

SENSITIVE
SIPDIS

TREASURY FOR RON BLOOM

E.O. 12958: N/A
TAGS: ECON EIND ETRD ELTN PGOV SW
SUBJECT: SWEDISH AUTO INDUSTRY ENTERS CRITICAL PHASE

REF: A. STOCKHOLM 207

B. STOCKHOLM 076


1. (SBU) Summary: Swedish State Secretary for Enterprise
Joran Hagglund told CDA on March 27 that the ailing Swedish
auto companies Saab and Volvo Cars are entering a critical
phase; Saab is in formal restructuring. The Swedish
government will not step in and take over the Swedish auto
companies, though it has issued state guarantees for EIB
loans totaling $2.4 billion. GM and Ford, which own Saab and
Volvo respectively, should continue to support their Swedish
subsidiaries until they can be sold, Hagglund stressed. End
Summary.


2. (SBU) The Swedish government will not step in and take
over the Swedish auto companies, although it issued a rescue
package in late December 2008 valued at $3.4 billion to boost
the auto industry. The program is divided into credit
guarantees ($2.4 billion in guarantees for loans from the
European Investment Bank),emergency loans ($606 million) and
research funds ($363.5 million).


3. (SBU) Swedish State Secretary for Enterprise Joran
Hagglund told CDA on March 27 that the ailing Swedish auto
industry is entering a critical phase. Hagglund stressed
that GM and Ford should continue to support Saab and Volvo
until they can be sold. Sweden is pleased with the direct
communications it has had with GM headquarters in Detroit,
per Hagglund, which he called "open and clear despite having
different positions." He was less happy with the fact that
GM has tasked the Saab management team with trying to sell
Saab instead of allowing them to focus on running Saab.
"Ford is going about this correctly," Hagglund opined. Ford
management is working to sell Volvo and allowing the Volvo
management team to run the company, he continued.


4. (SBU) Comment: The Swedish government's tough stance on
this issue has been popular in Sweden. Deputy Prime Minister
Maud Olofsson has stated that "the Swedish government is not
in the business of manufacturing automobiles." Olofsson will
be in Washington this weekend and has a meeting with
Treasury's senior advisor Ron Bloom at 11.00 on March 31.
SILVERMAN