As General Motors mulls spinning off its European unit Saab, the CEO of Electrolux, Hans Straberg, told CNBC that failing businesses should be allowed to go bankrupt and not receive any more state aid.
“Let the businesses that are not fully functional, let the weaklings go in this, don’t prop them up,” Straberg told CNBC’s Simon Hobbs in an exclusive interview.
“I understand it’s difficult to distinguish some times between good or bad businesses, but make sure that those who are not surviving the winter don’t survive and instead focus on those who have the strength to grow bigger and stronger internationally,” he added.
Straberg stopped short of naming specific companies, but said there were a couple of firms in his industry that have been given or are asking for emergency government cash recently, which should be allowed to fail.
- Watch the Hans Straberg interview above.
“We see in our industry that there are some companies that have been loss-making for years, are now propped up during this with emergency loans,” Straberg said.
Government bailouts put jobs at risk for the entire industry, he added.
Saab’s owner GM hasn’t begun an official auction for the Swedish auto-brand, but it expects to have preliminary financials for Saab ready in a matter of weeks, people unauthorized to discuss the sale process told Reuters.
Meanwhile, the debate on rescuing GM's OPEL raged on, with German Interior Minister Wolfgang Schaeuble saying insolvency could be an option for the crisis-hit unit. However, German Chancellor Angela Merkel was notably absent from talks between GM Europe and the government.
- Slideshow: Saving GM; Inside the Crisis