Detroit fear spreads to Swedish auto-making town

Thu Jan 29, 2009 7:44am EST
 
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By Victoria Klesty

TROLLHATTAN, Sweden (Reuters) - People in Trollhattan, in the heart of Sweden's industrial southwest, have grown used to staying abreast of the news out of Detroit. What keeps them focused on the fate of U.S. autos is fear.

This municipality is the headquarters of Saab, a money-losing carmaker owned by General Motors, itself struggling for survival. Volvo Cars, based nearby in Gothenburg and also loss-making, is owned by Ford and faces similar uncertainty.

Many of Trollhattan's 54,300 residents either work for Saab directly or for one of its suppliers. So as General Motors has teetered, so has this entire community.

"If Saab failed, it would weigh heavily on the region. If both Volvo and Saab were to fail, it would be a big blow to the whole country," said Saab union representative Paul Akerlund.

The carmakers are important not just for the local communities but for all of Sweden, because they are so tightly enmeshed in the wider economy. The auto industry made up almost 15 percent of Sweden's exports in 2007.

Unemployment in the country of around 9 million currently runs at just over six percent. Western Sweden's chamber of commerce and industry estimates 62,000 workers in the region are directly employed by vehicle-makers and their suppliers.

But spokesman Stefan Gustavsson estimates each job supports two more. That translates to almost 190,000 jobs, or more than four percent of Sweden's workforce.

"If Saab fell, there would probably be no money for anything beyond the absolute necessities in this municipality," said Akerlund. "Many street lights would probably have to go dark."   Continued...

 
<p>Saab's Trollhattan headquarters are seen in this undated photo. People in Trollhattan, in the heart of Sweden's industrial southwest, have grown used to staying abreast of the news out of Detroit. What keeps them focused on the fate of U.S. autos is fear. To match feature FINANCIAL/SWEDEN-AUTOS REUTERS/Victoria Klesty (SWEDEN)</p>