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Saab Stories

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Saab Automobile appears to be going down. The Swedish automaker was abandoned by its beleaguered parent company, General Motors, prompting the Swedish managers to petition the Swedish government for a bailout. In 2009, the Scandinavian government said “No.” GM then sold Saab to a Dutch manufacturer, which hit a cash crunch in this year’s first quarter. 

Lots of people with fond memories of the pre-​GM Saab thought that the Dutch outfit had a great idea: Revive Saab by reintroducing a 1940s look, the famous Saab 92.

But the financing fell through, sending Saab begging, again, to the Swedish government, with promises of radical restructuring.

A western Swedish district court again ruled, “No.”

This is not good for the people of Trollhattan, where Saab’s main plants reside. They will be hard hit, as in any disaster.

What is interesting is that, though many folks of Trollhattan have repeated the old social democrat line about how they are “people” who somehow deserve their incomes and such, the government refused to go along with the old bailout model.

One could argue that the oft-​idolized Swedish nationalization/​capitalization/​marketing solution was the model for America’s 2008 and 2009 bailouts. The method looks less popular, these days, in its home country.

We’re living in tough times, getting tougher. Still, at some point we’ve got to bite the bullet and resist trying to “fix” failed businesses by government. 

Governments fail often enough, themselves, without moonlighting this extra job.

This is Common Sense. I’m Paul Jacob.

3 replies on “Saab Stories”

If a company does not have a viable operating model that allows it to compete and thrive in the community, then having the government collect tax dollars and give it to maintain the non-​viable model just takes away assets from the community that would otherwise be going to a business that COULD compete.

We didn’t keep the buggy whip makers in business, or the oil lantern manufacturers, even if they were too big to fail at one point. We let go Studebaker, and Duesenburg, and Stutz, deciding that they were big enough to fail. Supporting a failing, uncompetitive business does the community and the taxpayers no service.

We bite the bullet every day with businesses that are uneffective and are being fixed by our own non-​competitive government. All of this fixing protects the uncompetitive large businesses at the expense of the smaller business that would be expanding and growing (while providing 70 – 80% of America’s jobs).

We are already biting the bullet. Time to stop biting our tongue as well and tell our government to “bite me” when they come up with still another “stimulus” crony-​bailout bill.

The negative aspect of this is that Saab, like Volvo will be looking to the Communist Chinese for financing- which will lead to further problems down the road. Not a good idea to have foreigners own your country.

The American government could make trillions of private investment dollars instantly available at no cost to the government. But they won’t do it because it doesn’t fit the big-​government model.

American companies have trillions of dollars overseas, which could be repatriated to kick-​start the economy. But they can’t afford to bring the money home because it would be taxed at an exorbitant rate.

The government needs only to declare a temporary tax holiday [say, for five years] for any repatriated dollars that are invested in new products, new production facilities, etc.

The government would not lose a nickel in tax money; the dollars will still be kept overseas and not brought home as long as the cost of bringing it home is too high.

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