Tuesday, March 24, 2009

SAAB Sinking/Sweden Rejects American Socialism!

The New York Times has reported that SAAB is suffering huge losses, on the order of $350 million last year. That's about $3500 per car sold worldwide. Moreover, GM, which once owned fifty percent of SAAB, is shedding its interest in the company, leaving Sweden to "hold the bag" so to speak.

Still, the Swedish government is not taking the bait, having rejected SAAB's request for a taxpayer-funded bailout. The Swedish Minister of Enterprise, Maud Olofsson (pictured on THE RIGHT) summed up her government's position as follows:

"We are very disappointed in GM; but we are not prepared to risk taxpayers' money. This is not a game of monopoly." The Times also quotes Minister Olofsson as saying: "The Swedish state is not prepared to own car factories."

Will President Obama (pictured on the LEFT, above) summon the courage to resist further taxpayer subsidies of GM, for instance ? Or will he find himself out-couraged by Maud Olofsson? In reading the Times article, I was surprised to learn that SAAB only sold 93,000 cars worldwide last year, and about 21,000 in the United States. That compares to more than two million for Chrysler, for instance, and over 10 million for GM and Toyota. GM had high hopes for SAAB, having set a goal back in 1996 for over 150,000 in worldwide sales.

Let me end by saying that, subsidy or not, I wish SAAB every success. I sat in a couple of SAABs last week at the Richmond Auto Show, including a 9-3 Sport-Combi. The car had great headroom and was, to put it bluntly, pretty spiffy. Here's a link to the Edmunds.com test drive of the car: