Saab has lined up yet another Chinese deal - but may face problems getting it approved.
Struggling Swedish automaker Saab has lined up yet another White Knight in an effort to forestall bankruptcy.
With several earlier deals now stalled, Saab officials revealed they are talking with an undisclosed Chinese bank hoping it will partner with China’s Zhejiang Youngman Lotus Automobile Co. to buy a stake in the Swedish maker.
But the latest proposal would face some of the same hurdles that have tripped up other possible rescue deals. Among other things, it would require the approval of Saab’s former parent, General Motors, which has been reluctant to give the go to any deal that might hand proprietary technologies over to the Chinese.
Saab was struggling even before GM agreed to sell off the subsidiary in early 2010. But things got significantly worse early this year when a number of key suppliers launched a boycott over unpaid bills. The maker’s headquarters plant, in Trollhattan, Sweden, hasn’t been in steady operation since late March.
Over the months, Saab’s new owners, Dutch-based Swedish Cars, has lined up a variety of potential investors, ranging from Russian oligarch Vladimir Antonov to Zhejiang Youngman. That upstart maker had hoped to partner with Chinese auto dealer group Pang Da to acquire Saab for $135 million. But the bid has been tied up by Chinese regulators – while GM has signaled it would be unwilling to give its approval, anyway.
Complicating matters, Saab workers and various creditors have been trying to force the maker into bankruptcy – which would likely result in Saab’s permanent shutdown, according to industry analysts. The maker began a reorganization process under Swedish law in September.
Saab CEO Victor Muller has been able to line up a temporary bridge loan as he continues seeking out alternative arrangements. He is confirming talks with an unnamed Chinese bank – which Muller will only say is not the Bank of China. It would partner with Zhejiang Youngman, he said, to acquire a major but undefined stake in Saab.
The negotiations also aim to raise more up-front cash to cover Saab’s November bills and keep it out of bankruptcy.
GM is so worried about their technology getting knocked off they were seriously evaluating building the Volt in China — the car Bob Lutz called their “moon shot?”
The Chinese could walk into any Saab dealer, and assuming there were even cars in stock, buy one and reverse engineer it with the help of the service manual. Considering they graduate more engineers every year than the population of Detroit, the cat is not only out of the bag, it is probably dinner already.