Another Sad Day for Saab

General Motors announced that cannot sell the Scandinavian car maker so will scale down operations.

Saab is currently a subsidiary of the American firm General Motors (GM) who have been trying to shift it for some time since the global recession kicked in. The American’s size and inefficiency left them open to the worst of the crunch and left them looking for ways to cut costs.

They had been in negotiations with the Koenigsegg Group AB last month but talks fell down at the last minute. Since then they were also talking to Spyker Cars about its interest in acquiring Saab.

During the due diligence, certain issues arose that both parties believe could not be resolved. As a result, GM will start an orderly wind-down of Saab operations.

“Despite the best efforts of all involved, it has become very clear that the due diligence required to complete this complex transaction could not be executed in a reasonable time. In order to maintain operations, Saab needed a quick resolution,” said GM Europe President Nick Reilly.

“We regret that we were not able to complete this transaction with Spyker Cars. We will work closely with the Saab organization to wind down the business in an orderly and responsible manner. This is not a bankruptcy or forced liquidation process. Consequently, we expect Saab to satisfy debts including supplier payments, and to wind down production and the distribution channel in an orderly manner while looking after our customers.”

Saab will continue to honor warranties, while providing service and spare parts to current Saab owners around the world. As part of its efforts to become a leaner organization, GM began seeking a buyer for Saab’s operations in January.

Last week, Saab Automobile AB announced that it had closed on the sale of certain Saab 9-3, current 9-5 and powertrain technology and tooling to Beijing Automotive Industry Holdings Co. Ltd. (BAIC). GM expects today’s announcement to have no impact on the earlier sale.

GM has opted to concentrate its efforts into its core brands which unfortunately are all US names; Buick, Cadillac, Chevrolet and GMC being the main beneficiaries.

Thankfully they have also announced that they do plan to hold on to several regional brands, including Opel / Vauxhall in Europe. Good news for those but in the case of Saab it seems their day has come for now.

E. Dooley

21/12/2009