°Ivo merger taw
Page 5
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CF fight
ails through
to stop US bid
HE VOLVO/SCANIA ierger is off. This weekend, he Volvo board decided to iscontinue negotiations after Lnding that "at present, the onditions necessary to cornme Volvo and Saab-Scania o not exist."
The merger proposal was rst made on May 6 and was )1lowed by discussions with ?presentatives of the mployees.
All Volvo's unions, as well as le. Metalworkers Union, and le Graduate Engineers Union f Saab-Scania, approved the roposal on June 30.
So, as far as Volvo was conerned, the board was preared to make a decision nmediately after this date.
But two months later, there as still no decision from the ,aab-Scania side.
Consequently, the Gothenurg company has decided to roceed, alone, with its own evelopment programme as it can no longer await the result f the internal deliberations of aab-Scania." Volvo has, herefore, decided to disconnue negotiations on a merger f the two companies.
The reason given for consiering a merger in the first lace was one of rationalisaLon of joint production, to educe costs in order to be -lore competitive in the inter ational market.
But rather like the British .eyland situation, the position ; somewhat clouded because oth the Swedish companies ave car divisions with Saabcania producing around 100,000 cars annually compared with Volvo's 400,000.
At the time of the suggested merging the profitable truck were running at a loss, hut, by mergine the profitable truck and bus divisions, the resultant combine would have been one of the largest manufacturers in the world.
The official Volvo statement regrets that it has not been possible to conclude the merger as it was "important to the Swedish automotive industry and the future national economy."
As CM went to press no word had been received from Scania: the board was still sitting to decide on tbe wording of its official statement.