Mon, 07 Mar 2005

From: AFP

Cautious optimism after GM decision

Agence France-Presse, Stockholm

Swedes expressed disappointment but also cautious optimism following an announcement on Friday from U.S. car maker General Motors that it would move production of mid-size Saab cars from Sweden to Germany.

GM, the world's largest auto manufacturer, has for nearly six months been mulling whether to continue European mid-size car production at its German unit Opel in Ruesselsheim or at its Swedish subsidiary Saab's plant in the small southwestern Swedish town of Trollhaettan.

Following weeks of media speculation that Russelsheim would win the prize, GM's decision came as no surprise, but residents of the small Swedish town, about one fifth of whom work directly or indirectly for Saab, had been hoping for a miracle.

"Saab has for so long been the largest and most important industry (here). My husband worked for Saab for many years and our son still works there, so we are keeping all our fingers and toes crossed," Trollhaettan resident Margita Gustafsson told Swedish public radio before the decision was announced.

Although hopes of continued mid-size car production were crushed, many people here appeared pleasantly surprised that GM is not shutting down the Trollhaettan plant but has instead committed to building its Cadillac BLS, unveiled at this week's Geneva Motor Show, and selected Saab vehicles at the plant through 2010.

"I think there is reason to feel optimism in Trollhaettan because so very many people have been worried that this was going to be about shutting down Trollhaettan (and) it turns out there will be development of production here," Swedish Minister for Industry and Trade Thomas Oestros told Swedish public radio.

"There will still be production in Trollhaettan. Prestige brands will be produced in Trollhaettan," he said, adding that he was sure GM decided on Ruesselsheim "because there is already a plant in Ruesslsheim that can produce 300,000 cars. In Trollhaettan we would have had to build a new factory".

The Swedish metalworkers union Metall, which has put up a fierce fight to keep Saab production in Sweden, also sounded surprisingly positive to GM's decision.

"Both the factory in Trollhaettan and in Ruesselsheim will remain. That's why we think that both the Swedish and the German metalworkers are winners," deputy head of Metall Chresten Nielsen said in a statement after the announcement.

Another reason for the upbeat comments could be that Saab chief executive Peter Augustsson told reporters the restructuring would not immediately lead to further staff reductions beyond the 540 layoffs the company announced last October.

Many however appear worried by GM's 2010 cut-off date.

"Beyond 2010, today I can't tell you what happens ... If the plant does its job we will continue to look at it as a production source going forward," GM Europe chairman Fritz Henderson said at the Trollhaettan press conference.

Of Trollhaettan's 53,000 inhabitants, about 10,000 people work for Saab or one of its suppliers.

"Now we'll have to take things one day at a time and do the best we can," Rajen Khunti, who works in Saab quality control, told Swedish news agency TT.