The role of the Swedish government and trade unions in managing the Volvo cars crisis in 2008-2010 and its impact on the Swedish system

Sweden has a small internal market and, thus, bases its wealth on the exports. Following the so-called Rhen-Meidner model this objective is also achieved thought the solidarity wage: wages are parametrized on a lead-ing sector (generally the major export industry) and because each firm faces the same labour cost they are obliged to base their competitiveness on higher productivity levels (reached through new investments and rationalization of the production process). Restructuring is, thus, accepted as a normal and fundamental principle and enterprises that are not able to face the standards should be shut down and their employees moved (thanks to labour market polic-es financed by the State) to more competitive companies. No direct public support is then generally provided to pri-vate companies.
This model was put under pressure during the economic crisis of 2010, which, especially in the automo-tive sector, suddenly caused a number of redundancies impossible to reabsorb in the short time. The social parties and the Government started a relevant debate concerning how to solve the emergency. While the latter stuck to the classical method, refusing direct support to the companies, part of the former looked for new solutions. After an uneasy confrontation it was signed a new temporary framework agreement (only applicable to blue collars), that allowed employers to layoff workers and, until a certain cap, to do not compensate the layoff period. However no public money was involved in this scheme.
The positive results achieved led in the following years to some important modifications of the Swedish model of handling enterprises’ crisis, with the implementation of two new systems, one bipartite and one requiring the intervention of some administrative bodies and public money.