Sweden said on Thursday it would provide up to SEK 25 billion ($3.10 billion) in credit guarantees and emergency loans to its ailing auto industry but had no plans to buy stakes in Volvo or Saab.
Both companies have been lined up for sale by their US parents, respectively Ford Motor Co and General Motors Corp, which are facing a fight for survival on the front line of a devastating market downturn.
The center-right government said in a statement it would provide up to SEK 20 billion in collateral-backed credit guarantees, directed towards the manufacture of more emissions-friendly vehicles, as well as “rescue” loans of up to SEK 5 billion. “The measures will be taken with the clear assumption that the state does not intend to acquire any of the existing automotive manufacturers,” the government said.
The aid package came after the US House of Representatives late on Wednesday approved legislation to lend up to $14 billion to GM, Ford and Chrysler LLC, though the bill’s prospects in the Senate looked uncertain. Ford and GM had both held talks with the Swedish government over possible support for their struggling local units.
Sweden also pledged to spend SEK 3 billion on automotive research and development through a new state-owned firm. “We have with these three measures found a structure which allows us, with great responsibility for public finances, to lay the groundwork for solving the real problems of the automotive industry,” Finance Minister Anders Borg told a news conference. The US bailout proposal would extend taxpayer-funded loans or lines of credit to the three US carmakers and create a federal government post of “car czar” to oversee the industry. (Reuters)