Detroit Says Goodbye to the Swedes

In an effort to make concessions that will reassure those on Capitol Hill and boost support for the bailout, GM has announced that it has placed Saab in “strategic review,” which loosely translated means it’s up for sale.

GM has held shares of the Swedish automaker since 1990 has been the sole share holder since 2000. While Saab may be struggling like every other automaker these days, the resources to revitalize its lineup have not been made available from GM as its parent. From the archaic 9-5 which needed a redesign several years ago, to the 9-7X which was little more than a thinly disguised Chevy Trailblazer, there’s been plenty of need for improvement. More recently, the updated 9-3 sports sedan adds more power and XWD all-wheel drive, but it is simply not enough to boost sales amid an entire lineup that needs attention.

Meanwhile, Sweden’s other preeminent auto brand, Volvo, has also found its way into a similar position. Owned by Ford since 1999, the Volvo brand holds plenty of value as it’s identified around the world as a safety innovator.

Despite fresh product offerings such as the fuel efficient C30 or the upcoming XC60 crossover, Volvo sales continue to plummet and Ford looks to sell the company as it strives to regain profitability. Luckily for Volvo, its parent company has afforded it more resources compared with Saab which should make it far more valuable to potential buyers.

The fate of these two automakers is uncertain. The Swedish government has expressed interest in providing support to the brands, but has rejected the notion of buying either. Whatever the fate of Volvo and Saab, they will likely be intertwined with their Detroit-based parents at least in the short-term. But with a dire need for cash, and now government pressure to turn a profit, expect at least one of these premium European brands to go to the highest bidder soon.