Saab Trollhättan plant

General Motors To Build Mid-Size Cars In Germany, Not Sweden

The car industry in Sweden has been dealt a huge blow after Saab’s Trollhättan plant lost out on the contract to build General Motors midsize cars in Europe.

In an announcement on Friday lunchtime, GM Europe, which owns Saab, said it had been a tough decision to choose between Trollhättan and the Opel Ruesselsheim plant in Germany.

The automaker had said that only one of its European plants would produce the next generation of midsize Opels and Saabs.

”Both plants presented compelling business cases but, in the end, the scale for this particular allocation tipped in favour of Ruesselsheim,” GM Europe Chairman Fritz Henderson said.

GM has said it has to reduce costs at its money-losing European operations - Opel, Saab and Vauxhall - to cope with sluggish consumer demand and increased competition from Japanese and other carmakers.

GM said it was still committed to production at Trollhättan. In addition to a new mid-sized Cadillac built for the European market, the company also plans to keep producing other Saab models at the plant at least through 2010 and would expand the Saab line to include an unspecified new crossover vehicle.

” Furthermore, we will make every attempt to allocate additional future products to this facility,” said Carl-Peter Forster, president of GM Europe.

Of Trollhaettan’s 53,000 residents, nearly 6,000 work for Saab.

”This is a dramatic day. This will affect the whole area and spread like ripples on the water to the smallest hot dog salesman,” said Vincent Andersson, 60, a taxi driver in Trollhättan who has lived there for 20 years.

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