Swedish government cannot bail out Saab and Volvo

The Swedish government confirmed today it is in talks with General Motors Corp. and Ford Motor Co. after a report that the U.S. automakers are seeking support for their struggling Swedish brands Saab and Volvo Cars.

"We are obviously in talks with Saab, Volvo, GM and Ford all the time, considering the difficult situation," government spokeswoman Lisa Warn said.

Warn declined to give details on the talks, but said the European Union's tough competition regulations restrain the options for the Swedish government should it wish to support the Swedish-based car industry.

Officials at GM-owned Saab and Ford-owned Volvo weren't immediately available for comments.

Ford, General Motors and Chrysler LLC have been lobbying the U.S. Congress for financial assistance as the companies are being squeezed by falling sales amid the world economic crisis. However, the Swedes doubt U.S. lawmakers would be willing to support the companies' international operations.

"If GM gets money from the American government, then we're convinced that it will be earmarked for American interests," said Paul Akerlund, a union representative at Saab. Detroit Free Press