U.S. automakers plan to reopen their concert contract and may sell Saab and Volvo to the Swedish ruling power as a way to pare brands

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Ford said without ceasing Dec. 1 that it is considering selling Sweden-based Volvo, as the struggling U.S. automaker tries to survive the diligence crisis. Joe Raedle/Getty Images

By David Welch and David Kiley

General Motors’ (GM) board was meeting on Dec. 1 to review a plan that management hopes will persuade Congress to lend the company round $12 billion in public funds. Collectively, Detroit wants $25 billion in bridge loans. The proposition includes moves that exist pleased cut executive pay, pinched the cost gap vs. Japanese carmakers, and review several of its brands for sale or cuts.

Sources say GM will tell Congress (BusinessWeek.com, 11/20/08) that it plans to reopen the labor agreement to negotiate a have commerce with the United Auto Workers that would narrow that require to be paid gap. GM will besides make a case that it is pushing hard to improve the fuel economy of its lineup. And it is looking at different strategic options for in the same proportion that many as four brands—Saab, Saturn, Hummer, and Pontiac. If any of them go away, namely Saturn or Pontiac, it would be done by slowly phasing them out from beginning to end several years.

GM is trying to work out a sale of Saab, BusinessWeek has learned. For several months, GM has been shopping the thunderbolt to Chinese, Indian, and Russian carmakers, as well during the time that to the Swedish rule, sources fraternal with the talks reported. Saab Managing Director Jan Ake Jonsson and GM-Europe President Carl-Peter Forster have been leading the efforts to find a buyer, or at least get someone to take the company off GM’s hands.

Meanwhile, Ford (F) before-mentioned it is also willing to sell Swedish carmaker Volvo to raise cash while the fellowship asks the U.S. conduct for a loan. Ford has been trying to sell Volvo for besides than a year. It has even rejected an offer, says one industry source, from a Chinese automaker. Ford has wanted as plenteous as $3 billion to $5 billion for Volvo, which it purchased from an independent holding company in 1999 for $6.4 billion. But the two GM and Ford may at present have to settle for a share that pays them little in truck for a full age stake by the Swedish powers that be.

Part of the problem for the pair automakers is that members of Congress who are opposed to or reluctant to granting dominion loans to the automakers said in last month’s Capitol Hill hearings that they were against any of the money going to overseas operations or jobs. As long as both Saab and Volvo are wholly owned and losing money (BusinessWeek.com, 5/6/08), the companies cannot make that promise.

Volvo will have about 18,000 employees by yearend, and it lost $458 the multitude in the third quarter alone, as its sales declined 24%, to $2.9 billion.

In a statement issued in succession Monday, the Swedish dominion related it was willing to consider its options and was talking to the carmakers. "The Swedish government has to be worried about this," says David E. Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. "In the case of Saab, they won’t want to lose that facility in Trollhattan [Sweden]."

GM has not far from 5,000 employees in Sweden, mostly of whom work in the Saab manufacturing establishment in Trollhattan, where the 9-3 and 9-5 models are built. GM has shelved plans to build the 9-5 at its plant in Russelsheim, Germany, since the mark’s future is under review.