Swedish govt vetos Volvo sale

Stockholm - The Swedish government has ruled out a takeover of the country's beleaguered automaker Volvo Cars if its owner, US group Ford, decides to sell it, daily Dagens Nyheter reported on Tuesday.

"It's not in our industrial policy to own carmakers and we will not jeopardise taxpayers' money," Enterprise and Energy Minister Maud Olofsson told Sweden's newspaper of reference on the sidelines of a meeting in Brussels.

The centre-right government has on the contrary pursued a policy of selling state assets since it came to power in 2006.

"We need to look at what the government can do without jeopardising taxpayers' money," she added.

Among possible buyers seen for Volvo are Germany's BMW and France's Renault.

"But selling car companies in the midst of this financial crisis is hard," Olofsson acknowledged.

Prime Minister Fredrik Reinfeldt recalled that Volvo and Sweden's other carmaker Saab, owned by General Motors, have appealed to the government for various forms of state aid.

"We are not an emergency bank where companies can get money when things take a turn for the worse. That would just be a misappropriation of taxpayers' money," he told Dagens Nyheter.

Cash-strapped Ford announced on Monday it was considering selling Volvo Cars, its last foreign premium marque, just a day before the three big US carmakers were to ask US lawmakers for a bailout of $25bn in government-backed low-cost loans.

A final decision on Volvo Cars is not expected for several months.

Volvo Cars has been hit hard by declining sales, as interest for its big, costly models dwindles.

In the third quarter, the company posted a net loss of $458m, nearly three times its full-year 2007 loss of $164m.

Volvo Cars, which was sold to Ford in 1999, has announced it will slash 6 000 jobs, including 3 900 in Sweden, out of 24 400 employees worldwide.

- AFP