Sweden Isn't Helping Saab, But It Wasn't Always That Way

Times sure have changed, for the Swedish government to withhold its financial support from Saab.

"Swedish government support is not expected in the near term," parent company GM said in an April 2 filing with the Securities and Exchange Commission. Government support might be possible if GM can find a "suitable investor" to take all or part of Saab off its hands, GM said.

Saab filed for reorganization in a Swedish court in February, in a process that resembles a U.S. bankruptcy reorganization. Under Swedish law, the company has three months from Feb. 20 to file a reorganization plan. GM says discussions with "several investor candidates" are underway. Saab is to become independent â€" or potentially go out of business -- by Jan. 1, 2010. Either way, GM is withdrawing its support.

Years ago, it would have been unthinkable for the Swedish government to let Saab sink so low. It's hard for me personally to realize it's been 20 years, but 20 years ago, I visited a brand-new Saab factory that neatly illustrated the good and the bad sides of Swedish socialism, which would soon be swept out of office.

On the good side, the Saab factory was a showcase, in a converted shipbuilding plant in Malmo, Sweden. It had lots of natural light and creature comforts for the assembly line workers. It was unbelievably quiet, for an auto plant. It was so clean, you could eat off the floor. It had a glass roof and extremely high ceilings. After all, the building's outer shell was originally built to hold ships under construction.

Everybody called the plant manager by his first name. He said Saab wanted to make it as pleasant as possible to work there, so they could retain trained workers. He also said it was difficult to persuade young people to work in the auto industry. Extended backpacking vacations in Australia were all the rage among Swedish teens and 20-somethings.

I looked around and thought, "If I ever had to work on an assembly line, I would want it to be this one." In fact, there were a few young American expats working there.

On the down side, at least from the company's point of view, absenteeism was chronic. I seem to recall up to 25 percent of the work force could be missing on any given day, especially on Fridays and Mondays, with just about no way to force people to show up for work. Employees could take a very generous number of consecutive sick days without a doctor's note. New mothers could take paid leave for months, and be guaranteed a job when they got back. Even new fathers could take several weeks with pay. And of course everybody got most of the summer off.

To top it all, Saab needed a new plant like a hole in the head. The company could already build more cars than it could sell, and yet it was adding another factory. The answer I got was that government tax breaks were so generous for creating new jobs, that it didn't matter that the new plant was completely superfluous.

GM would shortly take over Saab. The salad days at the Malmo plant quickly ended, and it was closed within a couple of years. It probably didn't help that according to one story, Bob Eaton, then president of GM Europe, once came to Malmo on the high-speed ferry from nearby Copenhagen, Denmark. Not only did the Malmo plant fail to roll out the red carpet for him, nobody even met him at the dock when he got off the ferry. In Detroit, heads would have rolled over that, but in easy-going Malmo, they must have figured he could call his own taxi.

Working there must have been nice while it lasted, but it's also easy to see why it didn't last long.