Soon a collector's item?
General Motors confirmed today that the proposed sale of its Saab subsidiary to Koenigsegg Group AB was terminated at the “discretion of the buyer.”
General Motors had signed a memorandum of understanding in August to sell Saab Automobile AB to Koenigsegg, but without all of the needed financing in place. The Swedish government then refused to lend money to Koenigsegg. At the time, Koenigsegg said it needed another $425 million to make the proposed business plan work. The business plan developed by Koenigsegg was never revealed, but it was critical for the sale to move forward.
To make the deal work, Koenigsegg, the ultra small Swedish sports car maker for the ultra rich, put together a plan with Beijing Automotive Industry Holdings Company Ltd. BAIC, which is controlled by the Chinese Government, would have become a minority owner in Koenigsegg Group.
“We were as surprised as anyone,” a senior General Motors executive tells TheDetroitBureau.com. Asking not to be identified by name, he adds, “There were some indications over the weekend things were getting squishy…but we were moving towards a close.”
It remains to be seen if problems with the Beijing Auto partnership led to the collapse of the sale, but at this point, a GM source stresses there are “no other buyers in tow.”
As a result, the future of its loss-making subsidiary now appears grim, since GM has said it will not put any more money into the operation.
“We’re obviously very disappointed with the decision to pull out of the Saab purchase,” said GM President and CEO, Fritz Henderson in a statement.
“Many have worked tirelessly over the past several months to create a sustainable plan for the future of Saab by selling the brand and its manufacturing interests to Koenigsegg Group AB. Given the sudden change in direction, we will take the next several days to assess the situation and will advise on the next steps next week,” Henderson said.
The GM source noted that the company’s new Board of Directors will likely address the sudden development next week, and while he left open the possibility of a “Hail Mary play,” he cautioned, “I don’t see a Plan B. The Board may come up with something, but the (Saab) enterprise is just not worth much.”
Saab has been slowly declining for decades, and annual sales are about 50,000 units, with 10,000 coming from the U.S. It is true that BAIC would have given Saab access to China, now the world’s largest auto market, but Chinese industrial policy favors local manufacturing, which does nothing to save Swedish jobs.
How soon Saab closes its doors could be decided next week.
Sincerely think this is good for The “New” GM. SAAB is a strong global brand and even a stronger one in Europe. SAAB brand’s status carried no relevance what so ever to Hummer or Saturn under the GM umbrella; it is a well-rooted ‘engineering oriented’ name. The pull-out will certainly cause some cash flow problems for GM but if I were the GM, I would do everything to keep this brand. If the financials keep improving like they are for the last quarter then its not going to be a difficult task. SAAB does not require anything close to keeping OPEL; check out the numbers if u will… If GM does not decide or is forced not to keep SAAB, then my first guess is that the Chinese will come along rushing and bid even higher than Koenigsegg to buy it; then my second guess is that Penske, getting over his frustration with the Saturn deal may approach GM to sort out a deal. This is feasible for Penske as SAAB has its own/separate manufacturing & engineering facilities(not like Saturn’s, fully attached to GM. I would do everything to keep SAAB ownership in the US and NEVER sell it to the Chinese. I do HOPE that Obama & the Auto Task Force will assess the situation in parallel terms to mine. Good for GM; good for the US Auto Industry..! /MT
Huh? GM continues to lose money – $1.2 billion in its first quarter since emerging from bankruptcy in July. The odds of Saab’s survival were already long, after today they are longer yet.