Business News
Volvo Cars and Swedish government freeze talks on state guarantee
May 7, 2009, 9:44 GMT
Stockholm - Volvo Cars, the Swedish subsidiary of US automotive giant Ford, and the Swedish government have halted talks on a state guarantee for a loan from the European Investment Bank, Volvo said Thursday.
The decision was reached 'jointly,' Volvo said, adding that the move was 'principally in consideration of Ford's Strategic Review which could lead to a sale of Volvo Cars.'
In March, the European Investment Bank (EIB) approved loans of 200 million euros (266 million dollars) for Volvo Cars for 2009, subject to a Swedish state guarantee.
Volvo said the loans had been planned to provide financing to environmental technology projects at the car maker that has its main base in the Swedish west coast city Gothenburg.
'We are disappointed that we have not been able to come to an agreement,' Volvo Cars chief executive Stephen Odell said in a statement.
Odell noted that rival car makers 'have been able to utilize similar EIB loans which clearly give them competitive advantage during these difficult times.'
Volvo Cars said it would look into other governmental initiatives to support its business.
Volvo Cars had some 24,000 employees worldwide in 2008 of which some 17,000 were in Sweden.
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