Sweden to Rescue U.S. Automakers?

Ford Motor Co (F) began exploring strategic options for Volvo, the last luxury European brand in its stable, a day before it makes a stronger case for financial assistance before US lawmakers. While appeals to the domestic government may fail, the company has now opened up its case for support from Sweden.

Both Ford and General Motors (GM), which operates the profitless Saab car brand, are large employers in the Scandinavian country. Volvo has said it will cut 6,000 jobs worldwide, more than half of which are in Sweden. The Swedish government may be forced to provide aid to the struggling US auto industry in order to avoid rising unemployment in its own economy.

Ford said review of options for Volvo, which lost $458m before taxes in the third quarter, is expected to take several months. The second-largest US carmaker once boasted of European brands like Aston Martin, Jaguar and Land Rover. Both Ford and GM shares gained Monday morning, after news of talks with the Swedish government was confirmed.

Comments

[geewow:]

Why are GM and Ford reaching over to Sweden for help? Neither really appear to have any real commitment to changing their brands or the types of cars they will need in the future. Both Saab and Volvo are maintenance intensive vehicles. It appears that both companies are seeing a decrease in sales; and, will likely continue. Where are the hybrids? Where are the affordable electric cars? Why are not these two teaming up with Tetra, and Th!nk Ox? These are the future. The dinosaurs running the two companies should be told to leave.

2008 Dec 02 07:47 PM

[Anthony Alfidi:]

The U.S. could learn something from our Scandinavian friends: How to force a failed company into receivership and wipe out its shareholders.

2008 Dec 02 09:46 PM

[Fliujniligui:]

I buy Honda Civic and then I buy HMC shares and to the rest i say f this.

2008 Dec 02 10:02 PM

[hardball22:]

Not to be difficult, but rather to champion responsible journalism:
is this Seeking Alpha article an excerpt from a larger Zacks Research piece?
"...the company has now opened up its case for support from Sweden." That's presented as a fact, but where's the supporting evidence, a quote, etc?
Honestly, the extrapolated scenario discussed herein (i.e. Sweden bailing out the American auto trifecta for the welfare of its own vested interest) is an interesting notion--albeit improbable. Nevertheless, I judge this article just that: hypothetical musing, not factual reporting.

2008 Dec 02 10:38 PM

[Mac from Va...:]

I don't know why the big 3 don't follow the lead of every other US manufacturer faced with low priced, foreign, unfair-trading competition. If the products can't be marketed at a competitive price if they are made in the US, close the US factories and move production overseas. Nike doesn't make shoes in the US, either does Levi make jeans. They learned their lesson ages ago. There are hundreds of other examples. I'm frankly surprised the big 3 haven't done this already.

What most Americans don't seem to understand is, if this trend continues, eventually all consumer goods will be imported and also just as inevitably, there will be no consumers left with the income to purchase these goods. It is an winding down of the whole consumer goods-based economy and will result in economic disaster.

2008 Dec 03 03:49 AM

[john s. gordon:]

vancouver - you've got that right.

u.s economy consists of:

retail sales of goods made in other countries.

repair of goods made in other countries.

landfill of stuff that is unrepairable.
> jack

2008 Dec 03 08:48 AM

[woodsey:]

Very interesting, Zacks. I for one am encouraged, but it appears that many do not grasp the importance of the mere possibility.

2008 Dec 03 12:10 PM