Dec. 11 (Bloomberg) -- Sweden’s government unveiled a 28 billion-krona ($3.5 billion) support package for Volvo Cars and Saab Automobile that aims to push development of fuel-efficient vehicles and ease the manufacturers’ access to funding.

The plan provides Sweden’s carmakers with a 5 billion-krona rescue loan, additional funding of as much as 3 billion kronor for research and development as well as credit guarantees of 20 billion kronor, Finance Minister Anders Borg and Industry Minister Maud Olofsson told a Stockholm press conference today.

“We will exercise significant influence in regards to how the money is spent,” Borg said at the meeting. “This is essentially a measure to secure jobs and production in Sweden.”

General Motors Corp. and Ford Motor Co., the owners of Saab and Volvo Cars, are seeking financial aid from the U.S. government to avert collapse. Ford is exploring the sale of Volvo, and GM is considering options for Saab. Volvo Cars employed 13,000 people in Gothenburg in southern Sweden last year and is cutting more than 2,700 employees in Sweden.

The U.S. House voted 237-170 last night to approve emergency loans for General Motors Corp. and Chrysler LLC, shifting the focus to the Senate, where Republican opposition threatens to delay or kill the legislation.

Preserving Knowledge

The legislation would let GM and Chrysler draw on $14 billion of loans to keep operating while they develop restructuring plans. Without the aid, the two companies would likely have to declare bankruptcy by the end of the year. Ford bought Volvo Cars from truckmaker Volvo AB in 1999, while GM bought Saab in two steps from the Wallenberg family.

“Ford and GM have not operated in the way we would have wanted and have invested too little” in Volvo Cars and Saab, Olofsson said. “If the U.S. pushes on to turn around its auto industry and Europe does the same thing, we can produce the vehicles that the environment and the customers demand.”

Sweden’s government has so far ruled out taking stakes or becoming temporary owners of Volvo Cars and Saab, dismissing calls from the opposition and other politicians for direct involvement. The state can support Volvo and Saab by providing resources to research and development, Olofsson said last week.

“We have to preserve the knowledge we have in the vehicle cluster,” Olofsson said at the meeting today. “This is an accumulation of strength with the companies, the unions and the employees to secure the jobs within Swedish vehicle industry.”

To contact the reporters on this story: Niklas Magnusson in Stockholm at nmagnusson1@bloomberg.netJohan Carlstrom in Stockholm at jcarlstrom@bloomberg.net.

Last Updated: December 11, 2008 06:31 EST