Swedish unions meet with government over Saab closure

Enterprise Minister Maud Olofsson vowed that the government would allocate an extra 542 million kronor (£46.5m) for labour market initiatives in south-western Sweden where Saab, which was bought by US transnational GM in 2000, now employs around 3,200 people.

Ms Olofsson said that the labour market initiatives would be directed at education, job training and boosting "entrepreneurship" and innovation in south-western Sweden.

The measures were announced after a meeting between the minister and representatives from Saab management, trade unions and local authorities from Trollhattan, where Saab's main plant is located.

GM officials did not participate in the meeting.

GM bought a 50 per cent stake and management control of Saab for $600m (£374m) in 1989 and gained full ownership in 2000 for $125m (£78m) more.

The closure of the Saab plant in Trollhattan will result in 7,000 jobs disappearing in the region, including positions at car-parts suppliers.

Svenaake Berglie, who leads FKG, a group representing 300 automotive suppliers, warned that the closure puts Sweden's entire vehicle-manufacturing industry at risk.

"This means that the vehicle cluster in Sweden will get weaker and smaller, and at some point during this journey you reach a critical mass that could mean the whole sector is lost in the long term," Mr Berglie said, adding: "It'll be a tough time."