Sweden to Saab: Merge to Wind Power or Shut Down

Swedish car company Saab received a tough message from the Swedish Minister of Trade: change your business and start producing wind power towers and turbines.

Swedish car company Saab, a subsidiary of the American company General Motors, could change its business and go into producing wind power towers and turbines. That is the message from Swedish trade minister Maud Olofsson, after refusing a financial support package to the Swedish car manufacturer, now on the brink of shutdown.

The message from the Swedish government should be considered in light of the country's ambition to make Sweden a greentech export success story, even as its car industry falters. For example, Swedish power company Vattenfall, owned by the Swedish government, is already Europe's largest power supplier from wind power sources since it acquired the Dutch firm Nuon last week.

Greentech exports now represent only 2 percent Sweden's total export business, a low number that the government is trying to increase. The idea that Saab, which also manufacturers airplanes, could transfer its operations into wind power system is not at all unreasonable, claims Swedish industrial economics professor Staffan Laestadius, talking to the Swedish magazine Miljöaktuellt.

"Producing wind power is more realistic for Saab than ever being a profitable car manufacturer again. It is also substantially more desirable for Sweden," he said.

How about Volvo, a subsidiary of America's Ford Motor Company, the other Swedish car company in trouble? The Swedish government's interest in saving the car companies also reflects a desire to avoid layoffs and keep as many jobs as possible in Sweden. Denying Saab a support package or ownership deal, Maud Olofsson, however, opens up the possibility of helping Volvo keep the company alive. Many subco ntractors and jobs are on the line if the company were forced to shut down. But the owner's attitude also counts.

"Volvo's owners, Ford, told us that they will continue to support us and are ready to take full ownership responsibilites. That separates Ford from GM, who is now just leaving Saab behind," Maud Olofsson said to Swedish business weekly Veckans affärer.

Volvo has already started wind-power system investments in Sweden's west coast region. This allows Volvo to avoid car-factory layoffs in the region by switching employees into a wind-power service. The investments are being undertaken through an investor network called Power West, reported Swedish daily Göteborgsposten.

Ford could just be giving the Swedish government guarantees, which raises the question: How important is it for Ford to save Swedish factory jobs in the face of the American car industry's tailspin? Switching to wind power may seem like a good way to prepare for the future.

Comments [3]

  • Gerrett S 03/4/09 8:24 AM

    I would think EV development would be a better use of automotive engineering talent.

    Reply
  • Ryan Servatius 03/5/09 2:26 PM

    Saab (Svenska Aeroplan Aktiebolaget) was an aircraft maker that dabbled in cars.  For years, they were one and the same.  Then Saab started dabbling in computers and created Datasaab.  Datasaab was proficient at building aircraft computers and in the early 60’s, the company reorganized under the name Saab AB.  In the late 60’s, it merged with Scania and from 1968-1995 was known as Saab-Scania, and they built everything - cars, trucks, buses, and aircraft.  Basically, almost anything that could get you from point “A” to point “B”.

    In 1990, GM bought 51% of Saab Automotive; in 1995, the corporation was split up into multiple independent entities.  The car division was called Saab Automobiles AB, the truck & bus division was Scania AB, and the flyboys became Saab AB.  GM eventually acquired the rest of the automotive division in 2000.

    So, Saab Automotive may cease to exist and this will have no impact on Saab AB. 

    As to how the Swedish Trade Ministry doesn’t know this history, well, I’m as   as you are.  But, to be honest Saab Automotive never had a chance.  The company sells less than 100,000 cars a year worldwide.  Seriously, that’s not good at all for what is essentially a mainstream automobile.  You can get away with low production numbers like that if you are building 6-figure luxury vehicles.  But when a Saab 9-3 has to compete with an Acura TL for the same buyer, and Acura has the power of Honda behind it (along with a vastly superior dealer network), well, you kind of have to have a screw loose in order to want the Saab.  Which explains me perfectly, since I did own one, once.  Right after my Peugeot.  Told you I was nuts!

    The only way Saab survives as a carmaker is through a merger with someone like Fiat, or if the Swedish government nationalizes the company like France did with Renault.  Otherwise, maybe Electrolux buys them and they use the plants to make ovens and vaccuum cleaners.  I guess its easier to convert an automotive plant to make wind turbines, and they can play on the Saab aircraft heritage again because most of the world is ignorant of Saab’s history, and they do think 9-3’s are assembled next to Viggen fighter jets. 

    Reply
  • Ryan Servatius 03/5/09 2:26 PM

    Saab (Svenska Aeroplan Aktiebolaget) was an aircraft maker that dabbled in cars.  For years, they were one and the same.  Then Saab started dabbling in computers and created Datasaab.  Datasaab was proficient at building aircraft computers and in the early 60’s, the company reorganized under the name Saab AB.  In the late 60’s, it merged with Scania and from 1968-1995 was known as Saab-Scania, and they built everything - cars, trucks, buses, and aircraft.  Basically, almost anything that could get you from point “A” to point “B”.

    In 1990, GM bought 51% of Saab Automotive; in 1995, the corporation was split up into multiple independent entities.  The car division was called Saab Automobiles AB, the truck & bus division was Scania AB, and the flyboys became Saab AB.  GM eventually acquired the rest of the automotive division in 2000.

    So, Saab Automotive may cease to exist and this will have no impact on Saab AB. 

    As to how the Swedish Trade Ministry doesn’t know this history, well, I’m as   as you are.  But, to be honest Saab Automotive never had a chance.  The company sells less than 100,000 cars a year worldwide.  Seriously, that’s not good at all for what is essentially a mainstream automobile.  You can get away with low production numbers like that if you are building 6-figure luxury vehicles.  But when a Saab 9-3 has to compete with an Acura TL for the same buyer, and Acura has the power of Honda behind it (along with a vastly superior dealer network), well, you kind of have to have a screw loose in order to want the Saab.  Which explains me perfectly, since I did own one, once.  Right after my Peugeot.  Told you I was nuts!

    The only way Saab survives as a carmaker is through a merger with someone like Fiat, or if the Swedish government nationalizes the company like France did with Renault.  Otherwise, maybe Electrolux buys them and they use the plants to make ovens and vaccuum cleaners.  I guess its easier to convert an automotive plant to make wind turbines, and they can play on the Saab aircraft heritage again because most of the world is ignorant of Saab’s history, and they do think 9-3’s are assembled next to Viggen fighter jets. 

    Reply
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