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UPDATE 1-Sweden says state should not own car firms

Published 12/03/2008, 07:42 AM
Updated 12/03/2008, 07:46 AM

* Minister says may take months to know fate of Saab, Volvo

* Has contacted Germany to hear its views

STOCKHOLM, Dec 3 (Reuters) - Sweden's industry minister said on Wednesday it was not the state's business to own car companies as speculation swirled over the fate of U.S.-owned Volvo Cars and Saab Automobile.

Struggling auto makers Ford, which owns Volvo, and General Motors, owner of Saab, are looking to sell the units. Both parents have held talks with the Swedish state.

"What we are doing is discussing with the companies about what solutions we can find and that includes also seeing if there are potential owners that could be interested in buying," Olofsson told a news conference.

She played down the possibility that the Swedish government might step in temporarily as owner of the struggling automakers.

"I think the taxpayers must be completely clear on the fact that it is a risky project to use their money to buy either Volvo or Saab in this situation where the losses are as big as they are."

Olofsson said now that the U.S. companies' intent was clear, she hoped to be able to come back with more specific information about Volvo and Saab shortly.

"We may not know the answer for Saab and Volvo for a number of months. There is a global financial crisis which means there isn't a line of buyers that want to invest in either the auto industry or in other industries," she said.

GERMANY'S VIEW

Sweden has been in touch with German authorities given Saab and Germany's Opel are both owned by GM.

"I have talked to my counterpart in Germany who is working on these issues. These (talks) revolve around the fact that Saab and Opel are very closely linked and we of course want to know how Germany is thinking about this," Olofsson said.

"We want to know how they see their relationship with Opel and we will intend to try to present how we see Saab's situation. But in the current situation, these (talks) have had more of an exploratory nature."

Olofsson, both in the news conference and in a Reuters interview on Tuesday, emphasised that the state is not a suitable owner of a car maker.

She said the government's role was to provide resource for research and development.

"I believe both Volvo and Saab need a knowledgeable, industrial, powerful owner that can afford to develop new car models, that can afford to market these car models, that can afford to make sure we get more customers for these cars." (Reporting by Niklas Pollard, Anna Ringstrom and Victoria Klesty; Editing by David Cowell)

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