GM Pledges to Keep Building Cars at Saab Plant
STOCKHOLM, Sweden March 4, 2005; Matt Moore writing for the AP reported thast General Motors Corp.'s guarantee Friday that Saab's plant in Trollhaettan will make cars through 2010 brought some optimism to the city, which feared major layoffs after the company focused its mid-sized production in Germany.
But the decision also gave the company, and Sweden, a five-year deadline in which to improve its production capacity in order to make a stronger case for keeping the plant up and running beyond then.
"Very few of us know where the automotive industry goes beyond five years," said Fritz Henderson, board chairman for GM Europe. "While not a particularly comfortable situation to be in, it's not an uncommon situation to be in."
The Trollhaettan plant employs more than 6,000 workers and produces more than 100,000 cars annually. More than 500 jobs, including 250 on the manufacturing line and another 250 in research and development, are to be cut through 2005.
Henderson said GM did not have any plans for further job cuts at the plant.
"This is a very, very important day for Saab," Saab Chief Executive Peter Augustsson said. "GM stands behind Saab, and will keep investing in us, and that feels very good."
He added that GM's decision "is not about Germany or Sweden, it's about Western Europe or Asia."
Goeran Johnsson, head of the Metal Workers union, said it was "a victory for both countries."
Prime Minister Goeran Persson, whose government agreed to make nearly euro227.2 million (US$300 million) in improvements to road and rail access to the Trollhaettan plant, and provide as money for research and development, welcomed the news.
"The most important announcement made today, from a Swedish point of view, is that the plant in Trollhaettan lives on and will continue producing cars of a high quality," he said. "It gives hope for the future. I'm not going to deny that we've been worried that the plant would be shut down completely."
Saab was founded in 1937 and originally built military aircraft. By the end of World War II, the company branched out into automobiles, using its aerospace expertise to build sleek, safety-conscious cars.
Since then, the company has been lauded for its combination of groundbreaking safety features, including being the first carmaker to make seatbelts a standard feature. GM acquired a stake in Saab Automobile AB in 1990 and bought Saab outright in 2000.
Earlier this week, GM said it will build a new Cadillac at its Swedish plant. The Cadillac BLS sedan is designed to compete with BMW's 3 series and Mercedes-Benz's C-Class line. Saab spokesman Christer Nilsson said production would start in January 2006 with an estimated 10,000 cars produced annually.