Nope: Sweden Rejects Saab Aid

The sad turn of events for the Saab brand continues. From the original bankruptcy post by James, we've  been reporting on the news coming from the automaker, like the embarassing production stoppage. Now comes what looks like could be the final nail in the company's coffin.

Nope! That's the answer on a Saab bailout from Sweden's enterprise minister Maud Olofsson. "The Swedish government is not prepared to own car factories". In one way, we probably saw it coming, given their resistance to it from the very get-go and extreme ambivalence towards GM.

But on the other hand it's remarkably out of character for the "social democracy" style of Swedish government and indeed most other European governments as well. There is a large safety net, with comprehensive employment benefits, universal health care, free education all the way to college, etc.

But, in 2006 a more right-leaning government was elected that prefers market forces (imagine that!) over state intervention in the economy. The Social Democrats had been in power previously, and as you can imagine, are opposing non-intervention

Normally, I'm in total agreement with letting market forces work. Government has proven time and time agiain it's not as competent of a manager as profit-driven entrepenuers. I think these are extraordinary times though that call for some different measures, espessially with these large companies at stake.

It's amazing to me how the U.S, a traditional bastion of capitalism, is bailing out it's car companies but Sweden is not. Anyway, I don't think these companies should be supported indefinitely if they aren't viable, but I believe that if they are important elements to national security, they should be given a helping hand to succeed during this difficult time.

"Voters picked me because they wanted nursery schools, police and nurses, and not to buy loss-making car factories," Enterprise Minister Maud Olofsson told Swedish public radio. Losses have racked up to about $3300-3500 per car last year.

At least let them fail during good economic times right? Apparently Sweden's government doesn't think so. Maybe Saab will find a private buyer, but I highly doubt that will be the case. For now it looks like Saab is on it's own.