About 650 of the affected workers are tied to production, while the remaining 100 jobs are administrative positions, Saab spokeswoman Gunilla Gustavs said by telephone from Gothenburg today. Saab has about 4,100 workers, most of them in Trollhaettan, where Saab makes the 9-3 and 9-5 models.
Saab’s job cuts add to more than 4,000 positions axed at Swedish rival Volvo Cars since October, as both companies struggle to entice consumers with their large station wagons. Saab and Volvo have both been put up for sale by their U.S. owners, after a plan to build a European luxury segment failed. The Swedish state has ruled out ownership of either carmaker.
“In a tough market, a product with no unique identity or selling proposition will not sell,” said Stephen Pope, chief global strategist at Cantor Fitzgerald in London. “Saab is a pale shadow of the beast it was right up to the end of the 1980s. Now it’s just a re-skinned Opel or Vauxhall, that won’t catch a Beemer or Mercedes buyer.”
Volvo Cars, owned by Ford Motor Co., plans to eliminate bonus payments for all workers this year and next, and lower pay for its 40 top managers by 5 percent, the Gothenburg-based company said today. The company will also curtail production at factories in Belgium and Sweden as demand dwindles. The measures aim to cut 500 million kronor in costs ($57 million), Volvo said.
Suppliers’ Woes
In December, Volvo said it will cut 2,721 employees in Sweden, including 2,367 blue-collar workers, and fire 680 outside the country. The carmaker also terminated the positions of 1,215 contract workers. The measures announced today aim to avoid additional firings, the carmaker said.
The decline of the Swedish auto industry has also weighed on suppliers. Plastal Holding AB, a Swedish supplier of plastic components for carmakers, filed for protection from creditors on March 5, after saying the markets in which it operates declined “dramatically.” Autoliv Inc., the world’s largest maker of air bags for cars, said Feb. 24 its operating margin in the first quarter may contract more than it had previously estimated.
Saab Chief Executive Officer Jan-Aake Jonsson said March 4 that the carmaker has drawn interest from rivals as well as investment companies as it seeks a new owner. Parent General Motors Corp. said last month it wants to cut ties with Saab by the beginning of 2010 at the latest after years of losses.
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Saab sold fewer than 100,000 cars last year, and the company relies on two models. A convertible version is manufactured by a subcontractor in Austria. GM said costs to cut ties with Saab may total more than $1 billion in the first quarter. Saab hasn’t had a profit in almost two decades and will be unprofitable in 2009.
“We’re hopeful that when we find a new investor and can introduce the new models, which are waiting and are almost ready, demand will increase and we can then hopefully increase production again and hire people again,” Gustavs said.
Among potential buyers is a group of undisclosed Swedish investors, Gustavs said today. In total, as many as eight investors have shown an interest in the company, she said.
