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Saab to axe 20% of jobs

Loss-making Swedish carmaker Saab is to axe 1300 jobs as part of the implementation of an “efficiency plan” next year aimed at putting the company back into the black.

The company, which lost more than £84m in the first six months of 2002, today announced major production changes next year at the Trollhattan plant – including a move to a single production line for the 9-5 and 9-3.

That change, combined with a move to a single shift production system for the 9-5, will require 800 fewer jobs. And, with a move to more resource-sharing with its GM parent, the Saab's engineering organisation will be significantly scaled down – with the loss of another 450 jobs.

The total of 1300 jobs lost represents nearly 20% of the 6600 Trollhatten workforce. The makeover includes the departure of Saab's vice president of sales and marketing Mikael Eliasson whose function will be taken over by Jan-Ake Jonsson, currently an executive director at GM Europe's Commercial Vehicles Division. President and CEO Peter Augustsson stays in overall charge – but with greater focus on sales, marketing, and growth issues.

Saab's current cash crisis is a combination of development costs of the 9-3 and subsequent below-forecast sales, together with development problems with the diesel 9-5. Saab had hoped for 140,000 9-3 sales for 2002 – but is only likely to achieve 126,000.

But parent GM's impatience with the Swedish carmaker stems from its long-term under-performance problem. Saab hasn't made a profit since GM took it over in the late 80s.

GM Europe President Michael J. Burns says: “With its product offensive, Saab has been laying the foundation for becoming a much stronger player in the market. In view of the aggressive action plan to improve Saab's efficiency and to increase its volume and revenue base, we are confident that the company is now on the right track.”

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