The board of car company Saab is reportedly meeting right now to go over the details of reorganizing. This move is short of bankruptcy but would grant Saab protection from creditors. Saab, as you know, is owned by GM, and GM was hoping the Swedish government would step in and rescue Saab from its perilous situation. The Swedes are saying no way, Rick.
GM CEO Rick Wagoner wanted $570 million in aid but Sweden said it's already offered credit guarantees, emergency loans and research money for its auto industry. Enough is enough. Oh, and the Swedes realize that the US government might bail out GM some more, so what incentive do they have to inject their own money?
Philippe Houchois, a UBS auto analyst in London, said Sweden's response was not surprising.
"They (GM) haven't done much to use their European arms to support their U.S. business."
Sweden's Industry Minister Maud Olofsson had this to say:
I'm deeply disappointed in General Motors. They have in practice removed their hand from Saab. Instead they are handing over responsibility to Swedish taxpayers.
The Swedish state and taxpayers in Sweden will not own car factories. Sometimes you get the feeling that [GM] is a small, small company, but it is the world's biggest automaker, so we have a right to make demands.
GM realizes that every country is facing trouble when so many jobs are being threatened. Then it's easy for them to hand over responsibility to different governments.
I like this woman. She's doing what the US government has been unwilling to do so far : tell GM it's time for bankruptcy. If the US taxpayers are going to sink money into the domestic auto industry, then it should be in the most efficient way possible. The way it's working now is a sloppy mess. We need $30 billion. Okay, here's $13 billion. Now, we need $17 billion. Okay, here's...
I'd rather see the government backstop a bankruptcy than keep pouring money into a sieve. Bankruptcy does not mean the end of GM. It will force the company to change the way it does business. I think we've had enough of the "turnaround plans."
Here's a more thorough argument for why bankruptcy might be the best option for GM and for the country.
No one wants to see GM employees suffer or Michigan suffer. But it's starting to feel like we're just dumping money into a slot machine, and we know how that usually turns out. The Swedes have shown us what to do -- set a limit and stick to it.