(Source: WorldChanging & Times of India)

Proposal brings worldwide carbon tax for airline passengers closer

(Source: Wall Street Journal, T4America@twitter)

Sec. LaHood proposes 18-month extension for SAFEAT-LU  and shortly thereafter Rep. Oberstar says delay is unacceptable (via T4America@Twitter & WSJ)

Image Courtesy: Apture - Transportation Secretary Ray LaHood

USDOT published a news release this afternoon offering Sec. Ray LaHood’s proposed extension:

“This morning, I went to Capitol Hill to brief members of Congress on the situation with the Highway Trust Fund. I am proposing an immediate 18-month highway reauthorization that will replenish the Highway Trust Fund. If this step is not taken the trust fund will run out of money as soon as late August and states will be in danger of losing the vital transportation funding they need and expect.

“As part of this, I am proposing that we enact critical reforms to help us make better investment decisions with cost-benefit analysis, focus on more investments in metropolitan areas and promote the concept of livability to more closely link home and work. The Administration opposes a gas tax increase during this challenging, recessionary period, which has hit consumers and businesses hard across our country.

“I recognize that there will be concerns raised about this approach. However, with the reality of our fiscal environment and the critical demand to address our infrastructure investments in a smarter, more focused approach, we should not rush legislation. We should work together on a full reauthorization that best meets the demands of the country. The first step is making sure that the Highway Trust Fund is solvent. The next step is addressing our transportation priorities over the long term.”

Shortwhile ago, WSJ published an article covering today’s development, which featured Secrtary’s proposal to delay the reauthorization.  This aricle also captured an interesting response from Rep. Oberstar, delivered his press conference Wednesday.  It notes that Rep. Oberstar was adamant that Congress must pass a new law before the current one expires.

“Extension of current law is unacceptable,” Mr. Oberstar said. “Now is the time to move.”

Bill in the Works at Congress (via WSJ)

House Democrats are busy crafting a transportation spending bill that would cost roughly $450 billion over six years, but no consensus has emerged on how to fund it, reports WSJ citing familiar sources.

The bill for the first time would establish standards — like reducing oil consumption and spurring economic growth — that would influence which highway and transit projects get federal funding. It would also consolidate to six or fewer the number of Transportation Department programs used to channel money to states, giving local officials more flexibility to combat their transportation challenges.

Image Courtesy: Apture

The legislation is being drafted by House Transportation and Infrastructure Committee Chairman James Oberstar (D., Minn.), who plans to release a blueprint of his bill tomorrow at a press conference starting at 11:00AM.  Since this is the internet age, there will be a live webcast of the news conference (an invitation-only press conference). Transportation for America informs that Chairman Oberstar is releasing a 12-page paper and a 100-page outline of the bill and it’s likely that at least one of those — probably the shorter white paper — will be released the first press conference.

The current system relies heavily on taxes from gasoline and vehicle purchases. Revenue from these sources is dropping as Americans drive less and opt for more fuel-efficient cars and trucks. Meanwhile, states are encountering similar funding problems due to declines in tax revenue. The result is a growing gap between the nation’s infrastructure needs and what is being spent to maintain and upgrade it.

The Obama administration has opposed any gas-tax increase. The White House also opposes any quick transition to a new system, which has been tested in Oregon, where drivers are taxed based on the miles they drive rather than the number of gallons they pump into their gas tanks.

People familiar with the matter say Mr. Oberstar hasn’t come up with a funding solution, and the task of writing the bill’s funding component will fall to the Ways and Means Committee. Things may proceed even slower in the Senate. That makes it unlikely Congress will pass a new bill by the time the old one expires at the end of September.

Meanwhile, states may be forced to further curb their transportation spending if Congress doesn’t come up with more money soon. Last year, Congress opted to transfer $8 billion from the Treasury’s general fund into the Highway Trust Fund to prevent last-minute cutbacks.   Click here to read the entire article.

Grading the Transportation Bill (via T4America)

To help us all judge whether the bill delivers the promised transformation, Transportation for America has developed this scorecard (see below) laying out the changes that must be included to clear the bar. When the bill is released, we can begin using this as our measuring stick. Click here to download the PDF version of this awesome scorecard.

(Source: Streetsblog)

The federal DOT has just released its guidance for states seeking a share of its $8 billion in high-speed rail funding — and tucked in the rules are standards that could prove crucial to the project’s success.

The definition of high-speed rail can vary depending on the source. The original White House outline cited a top speed of 150 mph, while European and Asian networks can go as high as 200 mph.  Today’s DOT guidance uses the same standard that was outlined in last year’s Amtrak reauthorization bill: high-speed trains are those “reasonably expected to reach speeds of at least 110 mph.”

That standard appears flexible enough to include most regional rail plans. California’s high-speed authority believes the state’s service can reach a top speed of 220pm. The states working on a midwestern rail network with Chicago at the center, however, envision their trains achieving an average of 67 mph for local service and 78 mph for express rides.

Secretary LaHood observed the following on his blog:

“And now, the time has finally come for the United States to get serious about building a national network of high-speed rail corridors we can all be proud of.  A robust 21st Century economy requires efficient transportation of people from urban center to urban center. And, the guidance we publish today will evaluate proposals for their ability to:

• Make trips quicker and more convenient;
• Reduce congestion on highways and at airports; and
• Meet other environmental, energy and safety goals.

So, today the guidance; in mid-September we’ll be back with the first round of grant awards. I am proud to say the DOT is meeting its ARRA commitments and meeting them responsibly.

High-speed rail can reduce traffic congestion on the roads and in the skies, and it links conveniently with light rail, subways and buses for competitive door-to-door travel times. It will encourage economic growth and create new domestic jobs even as it makes our communities more livable.

The guidelines require rigorous financial and environmental planning to make sure projects are worthy of investment and likely to be successful. Both planning and construction are eligible, so states can apply for funds no matter what stage of development their project is in. ”

Click here to read the entire Streetsblog post.

(Source: RAND & Progressive Railroading.com)

The U.S. freight transportation system’s long-term efficiency and effectiveness is “threatened” by capacity bottlenecks, inefficient use of some components of the freight infrastructure, interference with passenger transport, the system’s vulnerability to disruption, and the need to address important emission and energy constraints, according to a study recently released by RAND Corp.

Despite the global financial crisis, experts continue to estimate that there will be increased demand for freight transportation in the future, even as the capacity of the nation’s highways, port and railroads are nearing their limits in key urban areas and transportation corridors.  The annual average road delay in the United States for rush hour travelers increased from 14 hours per year in 1982 to 38 hours per year in 2005. And the Association of American Railroads predicts that by 2035, more than half of the national rail network will be operating near or above capacity, resulting in significant travel delays and limiting the ability to maintain tracks and equipment. This would limit the opportunity to increase rail’s share of freight, which could help tackle environmental concerns and road congestion.

Titled “Fast Forward: Key Issues in Modernizing the U.S. Freight Transportation System for Future Economic Growth,” the study was supported by the Dow Chemical Co., U.S. Chamber of Commerce, Port Authority of New York and New Jersey, ports of Los Angeles and Long Beach, and Union Pacific Railroad.  The authors provide a broad overview of U.S. freight transportation, discuss its role in the supply chains of various types of businesses, and provide data about its capacity in relation to demand for goods movement. They conclude with a discussion of the need to modernize the freight-transportation system and the overarching issues this involves: increasing capacity through operational improvements and infrastructure enhancement, making the system more adaptable and less vulnerable to disruption, addressing the energy and environmental concerns associated with freight transportation, and building support for public and private investment in the system.

The report description on RAND’s website offers the following: Efficient movement of freight within the United States and across its borders is a critical enabler of future U.S. economic growth and competitiveness.

Freight transportation system delays and “uncertainty in the performance of the system” have meant higher prices for consumers and reduced productivity, according to the study.

RAND researchers determined there are four freight transportation and infrastructure issues that need to be addressed:

• increasing national and international freight system capacity through a combination of operational improvements and selected infrastructure enhancements;

• creation of an adaptable, less-vulnerable and more-resilient freight transportation system;

• critical energy and environmental issues associated with freight transportation; and

• the pursuit of public and private investments in supply-chain infrastructure, and sustainable funding priorities.

The study also recommends that “responsible” agencies conduct system-level modeling of the freight transportation system to determine where bottlenecks occur and to understand vulnerabilities, and shippers be encouraged to use alternative ports to reduce strain on the system.

Increasing the nation’s freight transportation capacity can be done by using a variety of strategies, not just through a massive program of adding new roads or rail lines. Suggested strategies include regulations, pricing, technology, improved operating practices and selective infrastructure investments. Examples of these improvements include adopting congestion pricing to promote more highway transportation during non-peak hours, encouraging more goods to be shipped by rail instead of truck and expanding some port operations to run 24 hours a day, seven days a week.

To make the system more flexible and less vulnerable to disruption, the report recommends that responsible agencies conduct system-level modeling of the freight transportation system to determine where bottlenecks occur and to understand its vulnerabilities. Encourage shippers to use alternative ports, instead of relying on just the largest, also would reduce strain on the system.

Transportation accounts for 25 percent of the nation’s hydrocarbon fuel use; of that amount, about 25 percent is freight transportation. So while passenger vehicles are the primary energy users and emitters of pollution, the freight transportation industry also must consider environmental effects as it develops expansion plans. Methods to reduce pollution include increasing the operational efficiency of freight transportation (which also increases capacity) and such direct mitigation measures as cleaner fuel, better engines and more-aerodynamic vehicles.

Finally, the report suggests that a greater effort needs to be focused on developing sustainable priorities for public investment in the freight transportation system.

Click here to access the PDF version of the Full Report or the Executive Summary.

(Source: Autoblog & Consumer Reports)

With Congress on the verge of passing some kind of ‘cash-for-clunkers’ legislation, it’s time to take a look at what cars are worth trading in for the scrappage credit and what models would be better to sell by other means. To help the average Joe Sixpack on the street, Consumer Reports has compiled a list that outlines the Make, model EPA combined mpg rating, etc.  The used cars listed are the newest vehicles likely to be available for less than $3,500, the minimum voucher value. For this to be worthwhile to the consumer, the vehicle’s trade-in value would need to be less than the voucher. Older versions of these vehicles are likely to be worth less, making the vouchers even more appealing. Many of the models have mechanical twins sold by another brand that may qualify, but we have not listed them here. The CR staff has examined the prices and concluded that pre-1993-94 Cadillac DeVilles, Eldorados and Sevilles are all solid candidates.

Click here to read the entire article. In a related news, US Senator Robert P. Casey Jr. (D-PA) has introduced legislation into the Senate that would add motorcycles to the controversial Cash for Clunkers program that was recently passed by both the US House and Senate, though with significantly reduced funding of $1 billion. If passed, the new amended bill would offer a $2,500 rebate for the purchase of a new motorcycle when an older trade-in is scrapped. FYI, Pennsylvania is the home for Harley Davidson, the renowned American motorcycle maker.

(Source: AP via Google,  Fox Toledo, CSM & Toledo On the Move)

Image Courtesy: Auto Insane - Mayor Carty Finkbeiner

Often we have come across stories that involve strange politicians and sometimes even the stupidest one who make dumb decisions that will make you wonder what on earth was he/she thinking to do something like this.   We have one such pol from Ohio that beats everyone of them dumb politicians out there.

Some residents of Toledo, Ohio, are complaining that they received $25 tickets for parking their vehicles in their own driveways. Residents along North Holland-Sylvania Road were ticketed for parking in the gravel part of their driveways.   Toledo, Ohio Mayor Carty Finkbeiner (FINK’-by-ner), who is already up for a recall vote says he stands by the citations handed out last week by the Division of Streets, Bridges and Harbor. He says the tickets were issued under a city law against parking on unpaved surfaces, including gravel driveways. How can they do that? They just found an old law prohibiting drivers from parking on “unpaved” surfaces.. and technically gravel is unpaved.

During a news conference Monday, Finkbeiner ignored a reporter’s question of whether the crackdown and fines were related to the city’s budget crisis.

Although not outlined in the city charter, a city memo has allowed workers with the city of Toledo’s Division of Streets, Bridges and Harbor to issue parking citations to citizens.

It’s not as though Toledoans are hell-bent against paved driveways. It’s just that the decision to enforce a little known regulation is taking them by surprise. Take Charles Robertson, for example. He’s lived in the same house (with the same gravel driveway) for 43 years. He got his first ticket last week.

“I just can’t reach into my magic box of tricks and get 5 or 6 grand to pave my driveway,” he said.

Thankfully City Councilman Michael Collins disagrees with the tickets, calling them “Micky Mouse nonsense”. He has promised residents he’ll try to have the tickets recinded.

In a move that will make some of his residents happy, Collins has taken the tickets from residents and says he will pay for them. He also referred to the Finkbeiner administration as a psych ward. Collins says the city itself is in violation of the law because the city tow lot is only gravel.

After his fiasco, Mayor Finkbeiner can be assured that he wrote his own ticket for his recall vote. (Note the cars parked on gravel in the background of this story’s image).

(Source: USDOT)

U.S. Department of Housing and Urban Development (HUD) Secretary Shaun Donovan, U.S. Department of Transportation (DOT) Secretary Ray LaHood, and U.S. Environmental Protection Agency (EPA) Administrator Lisa Jackson today announced a new partnership to help American families in all communities –- rural, suburban and urban – gain better access to affordable housing, more transportation options, and lower transportation costs.

Earlier this year, HUD and DOT announced an unprecedented agreement to implement joint housing and transportation initiatives.   With EPA joining the partnership, the three agencies will work together to ensure that these housing and transportation goals are  met while simultaneously protecting the environment, promoting equitable development, and helping to address the challenges of climate change.

Testifying together at a Senate Banking, Housing, and Urban Affairs Committee hearing chaired by U.S. Senator Christopher J. Dodd, Secretary LaHood, Secretary Donovan and Administrator Jackson outlined the six guiding ‘livability principles’ they will use to coordinate federal transportation, environmental protection, and housing investments at their respective agencies.

DOT Secretary LaHood said, “Creating livable communities will result in improved quality of life for all Americans and create a more efficient and more accessible transportation network that serves the needs of individual communities.  Fostering the concept of livability in transportation projects and programs will help America’s neighborhoods become safer, healthier and more vibrant.”

“As a result of our agencies’ work, I am pleased to join with my DOT and EPA colleagues to announce this statement of livability principles” said HUD Secretary Shaun Donovan. “These principles mean that we will all be working off the same playbook to formulate and implement policies and programs. For the first time, the Federal government will speak with one voice on housing, environmental and transportation policy.”

“It’s important that the separate agencies working to improve livability in our neighborhoods are all pointed in the same direction.  We’re leading the way towards communities that are cleaner, healthier, more affordable, and great destinations for businesses and jobs,” said EPA Administrator Lisa P. Jackson. “This partnership provides a framework to guide decisions that affect all communities.  This way, investments of financial and human resources by any one of our agencies will meet shared goals and confront significant challenges we all face together.”

The Partnership for Sustainable Communities established six livability principles that will act as a foundation for interagency coordination:

1. Provide more transportation choices.
Develop safe, reliable and economical transportation choices to decrease household transportation costs, reduce our nation’s dependence on foreign oil, improve air quality, reduce greenhouse gas emissions and promote public health.

2. Promote equitable, affordable housing.
Expand location- and energy-efficient housing choices for people of all ages, incomes, races and ethnicities to increase mobility and lower the combined cost of housing and transportation.

3. Enhance economic competitiveness.
Improve economic competitiveness through reliable and timely access to employment centers, educational opportunities, services and other basic needs by workers as well as expanded business access to markets.

4. Support existing communities.
Target federal funding toward existing communities – through such strategies as transit-oriented, mixed-use development and land recycling – to increase community revitalization, improve the efficiency of public works investments, and safeguard rural landscapes.

5. Coordinate policies and leverage investment.
Align federal policies and funding to remove barriers to collaboration, leverage funding and increase the accountability and effectiveness of all levels of government to plan for future growth, including making smart energy choices such as locally generated renewable energy.

6. Value communities and neighborhoods.
Enhance the unique characteristics of all communities by investing in healthy, safe and walkable neighborhoods – rural, urban or suburban.

Click here to access the USDOT Press Release on this new partnership.  Also check out the Secrtary of Transportation’s blog post on this significant interacgency partnership in his FastLane blog.

(Source: NY Times – Green Inc.)

Having shipped hundreds of electric vehicle charging stations, and with repeat orders now coming in from Europe, Coulomb Technologies, a privately-held Silicon Valley company, expects to be profitable by the 2010 introduction of the Chevy Volt, according to its chief executive, Richard Lowenthal.

(Mr. Lowenthal appears in the video above, explaining the company’s ChargePoint Network.)

“Our plan was to sell a thousand stations, but we will probably double that,” he told NY Times’ Green Inc. last week after the company secured its third Bay Area order this year. “Our company is structured to be profitable based on early adapters.”

Image Courtesy: Coulomb technologies

Founded in 2007, Coulomb is looking to crack the chicken-and-egg riddle that bedeviled the hydrogen fuel cell industry. Without a refueling infrastructure, consumers won’t buy vehicles. But no one invested in refueling stations without potential customers on the road.

“It is a very fundamental issue for the business,” Mr. Lowenthal said. “What do you do about the road trip?”

With electric vehicles, the additional problem is that in cities like San Francisco, where almost half of all vehicles park on the city’s streets, many potential buyers couldn’t recharge their cars overnight.

Mr. Lowenthal, a Cisco veteran who served as mayor of Cupertino, said that municipalities, parking companies and condo developers represent the first tranche of customers for charge points that will be deployed on city streets and in garages. They sell for $2,500 to $4,000 and can recharge an electric vehicle battery in four to ten hours.

In what might shape up to be the VHS/Betamax duel of the industry, a Coulomb rival, Better Place of Palo Alto, is looking to develop refueling stations where consumers on road trips can swap batteries in a matter of minutes. Still other companies are building rapid recharge points.

Mr. Lowenthal predicted the next three years would define the nascent charging station industry. By 2012, he said, the car industry will have an understanding of the early adoption rate for electric vehicles and plug-in hybrid electric vehicles.

Click here to read the entire article.

(Source: Daily Mail Online, Economic Times & Business Week)

Image Courtesy: Wall Street Journal

The crumbling economy has left many industries in dire straits and probably the hardest hit was dealt on the aviation industry.  Amidst rising oil prices and the chaotic economic climate, the airlines around the world are battling to stay alive.  The story has become gone from bad to worse for two national carriers – Britain and India, the colonial cousins. While India’s national carrier- Air India has decided to delay the monthly salary for its employees by 15 days, the British Airways has gone tothe extreme of asking its staff to work for free for a month.   The paragraphs below offer a glimpse of the airlines’ struggle.

Pathetic State of British Airways

British Airways boss Willie Walsh is asking his 40,000 staff to work for nothing to save the airline.

The astonishing plea comes as BA faces what Mr Walsh says is a ‘fight for survival’.

The company has written directly to its 40,000 employees asking them to volunteer for up to four weeks of unpaid work.

Mr Walsh announced last week that he would work unpaid for the month of July – forgoing £61,000 in salary. His chief financial officer Keith Williams is also working unpaid for the month.

The appeal to staff goes much further than earlier requests for a pay freeze or unpaid leave.

But it infuriated cabin crew. One said: ‘BA now stands for “B***** all” because that’s what they want to now pay us. That’s the calibre of management we have at British Airways.’

Passengers face the threat of a summer of strikes as the airline goes into battle with unions this week for a deal to slash costs and sweep away what it sees as

restrictive practices. BA is understood to be seeking up to 4,000 job cuts – one in ten of the workforce – including 2,000 voluntary redundancies among the 14,000 cabin crew.

BA adds that the action ‘will help minimise the financial impact on individuals, while helping to immediately save cash for the business’.

It denied that those who volunteer-for unpaid work will be given preference when any subsequent redundancies are considered.

The company is also asking staff to consider temporary or permanent part-time work, short-term unpaid leave of up to four weeks, or long-term unpaid leave of between one and 12 months.

Mr Walsh has set a deadline of June 24 for employees to volunteer for unpaid work of one to four weeks. He has also set a deadline of June 30 for a deal with unions, who say he will impose terms if he cannot get prior agreement.

Leaders of all the main BA unions are meeting management this week for talks on permanent cuts on pay, conditions and the loss of up to 4,000 jobs.

The biggest conflict is with 14,000 cabin crew who are gearing up for a major showdown with Mr Walsh which – if it leads to industrial action and strikes – will mean chaos for tens of thousands of holidaymakers.

The Daily Mail has learned that BA ground staff have already rejected the company’s proposals by six to one. Insiders say 2,987 voted No while only 487 backed the measures. One said: ‘Even the groundstaff are squaring up to Willie for a strike.’

BA has frozen pay and axed more than 2,500 jobs since last summer – including 780 management posts. It has revealed a record annual loss of £ 401million, which it blamed on rising oil prices adding almost £1billion to last year’s fuel bill, and a major fall in passenger numbers.

Pathetic State of Air India

The National Aviation Company of India (Nacil), the company that operates Air India, has decided to defer the payment of June salary to its 31,000 employees by 15 days due to severe liquidity crunch.

Air India top officials—general manager levels and department heads—have got an email, stating that the salary will be delayed by 15 days. The e-mail will be forwarded by department heads to their colleagues this week, said a senior official.

Last week, Air India, had tabled a blueprint to the aviation ministry on how it will utilise the Rs 14,000-crore bailout package, if it’s granted.

Another senior AI official said that Rs 14,000 crore package is necessary for the national carrier to run operations smoothly.

In May, the country’s second-largest private carrier Jet Airways had sacked around 50 employees and referred them to an in-house out placement cell, which will help them find jobs with other airlines.

On the other hand, the fully government-owned company Nacil, covering the combined operations of Air India and Indian Airlines, has nearly doubled its losses to Rs 4,000 crore in FY09.

Industry trackers say AI has not been in the best of health and the government bailout is critical. The cost of acquiring 144 aircraft has shot up from Rs 45,000 crore to Rs 50,000 crore on account of currency fluctuations.

As Air India’s decision was made public, employees of the carrier have threatened to go on an indefinite strike from July 1 if the management delays their salaries next month, a workers’  union leader said Tuesday. “We have decided to go on an indefinite strike from July 1 if the Air India management refuses to pay our salaries on time. We are chalking out strategies for our further course of action,” J.B. Kadian, general secretary of the Air Corporation Employees‘ Union (ACEU), told IANS.

The decision was taken in a meeting of ACEU, the largest union among the Air India employees, here Tuesday. The union has already submitted a memorandum to NACIL chairman and managing director Arvind Jadhav, requesting him to roll back the management decision to delay the salaries.

International Air Transport Association revised its airline financial forecast for 2009 to a global loss of $9 billion, nearly double the March estimate of a $4.7-billion loss.

(Source: AP via Yahoo, Forbes & Autoblog)

TransportGooru was one of the earliest portals that notified about the Swedish love affair that originally reported by the Swedish National Television.  Though it was not officially confirmed by the companies involved (GM & Koenigsegg), pretty much everyone knew what is coming.  General Motors made it official this morning, Saab will soon be back in Swedish hands. In many respects, this is the most fitting result for quirky brand. Koenigsegg is an oddball itself, building insanely fast supercars in a Scandinavian country where you can’t legally drive over about 60 mph.

GM said in a memorandum of understanding that the sale would include an expected $600 million funding commitment from theEuropean Investment Bank, guaranteed by the Swedish government. Additional funding for Saab’s operations and investments would be provided by GM and Koenigsegg Group AB, it said.The sale is expected to be completed by the end of the third quarter and is subject to regulatory approvals by authorities.

Image Courtesy: Autoblog

“This is yet another significant step in the reinvention of GM and its European operations,” GM Europe President, Carl-Peter Forster, said in a statement. “Closing this deal represents the best chance for Saab to emerge a stronger company,” he said, adding “Koenigsegg Group’s unique combination of innovation, entrepreneurial spirit and financial strength, combined with Koenigsegg’s proven ability to create world-class Swedish performance cars in a highly efficient manner, made it the right choice for Saab as well as for General Motors.”

The company behind the consortium, Koenigsegg Automotive, was founded in 1994 by Christian von Koenigsegg, a Swedish sports carfanatic and entrepreneur, who remains the chief executive. It makesluxury sports cars at its headquarters, a former air force base near Angelholm, in southern Sweden.

With a full-time staff of 45, Koenigsegg makes around a dozen cars a year, customized for every buyer. The company doesn’t advertise prices for its models, but they are believed to range between 8 million and 18 million kronor ($1 million-$2.3 million) each.  Saab, on the other hand, has more than 4,000 staff worldwide, is represented in some 50 countries, and typically produces more than 100,000 cars a year.

One of the key details about the deal is the now obligatory government backing, this time in the form of a $600 million loan from the European Investment Bank, guaranteed of course by the Swedish government. That explains why minuscule Koenigsegg picked up Saab for free. It’s all about being Swedish.

“‘Saab needs to be left alone to proceed with its strategy,” says Matts Carlsson, an analyst of Goteborg Management Institute, noting that any tampering with its five-year plan to produce premium cars that are not aimed at competing with luxury brands such as BMW or Lexus ‘could destroy it.’

Crucially GM is pledging Koenigsegg its “platform and powertrain technology.” It’s very likely to include the “Epsilon 2” platform — the model (metal frame, geer box, technology) on which the latest GM European cars are based, such as the Opel and Vauxhall Insignias, says Tim Urquhart, an analyst at IHS Global Insight in London. That’s hugely significant for Koenigsegg as research and development of these platforms are a massive expenditure for automakers, he added.

Koeningsegg’s technology could prove valuable to Saab too. Koeningsegg has made a big push into green technology, making low emission, high-efficiency cars such as a flex fuel super car operating on both ethanol and petrol. It’s an area where Saab has been lagging behind its competitors, and could eventually help the company sell more cars.

It should help it increase sales volumes at Saab, which have fallen off sharply in recent years. Having access to GM’s technology will give the Swedish car maker several years to come up with a model for the future.

Koeningsegg also appears to have trumped other suitors, including Italy’s Fiat ( FIATY.PK – news – people ), which was interested in buying Saab after losing out in the race for Opel to Canada’s Magna International ( MGA – news – people ). (See “Fiat Keeps An Eye On Saab.”)

The sale of Saab to Koeningsegg marks a return to Swedish ownership after nine years in GM hands. Last year Saab posted a loss of 3 billion Swedish kronors ($384 million). It says it needs $1 billion to overhaul its business.