GM to shut Saab as Spyker talks fail

GM to shut Saab as Spyker talks fail

GM to shut Saab as Spyker talks fail

Demise of a Brand A SAAB branch office in Beijing. AP

The move by GM to abandon the 60-year-old Swedish auto brand would eliminate 3,400 jobs in Sweden and drop 1,100 Saab dealers who have watched with increasing concern as 10 months of talks to sell the brand sputtered out in recent weeks.

Swedish government officials and representatives of GM had been negotiating as late as Friday morning in Stockholm before the automaker concluded that it was not going to be able to conclude a deal to sell Saab to Spyker Cars.

Swedish Enterprise Minister Maud Olofsson blamed GM for not doing enough to save Saab during the 20 years it controlled the brand and its losses mounted. “It is ultimately the owner who is responsible for the company,” Olofsson told reporters. “It is difficult to see what we could have done differently.”

GM had been in exclusive talks with Spyker this month after an earlier deal with Swedish luxury car builder Koenigsegg collapsed last month.

John Smith, the GM executive who steered Saab negotiations, said trying to complete a deal with Spyker against the month-end deadline for a deal set by the GM board had been a long shot he compared to trying “to make a shoestring catch.”
Supplier payments

GM said it would shut down Saab operations, including its production hub in Trollhattan, Sweden, starting in early January. It said Saab would satisfy debts, including supplier payments and honor warranties.

Saab has been a consistent money-loser for GM. The brand, which attracted a following of loyalists for quirky hatchbacks with turbocharged engines, lost about $340 million in 2008 and had projected a similar loss this year.

Govt aid
Autos analyst Erich Merkle of Autoconomy said GM was spread too thin before it decided this year to retain only the Chevrolet, Buick, GMC and Cadillac brands. It couldn’t give Saab the sustenance it needed to compete, he said.

GM bought 50 per cent of the Saab car operations in 1990 for about $700 million. It paid $125 million and assumed debt for the remainder of the unit in 2000.
GM, which took $50 billion in the US government aid and emerged from a bankruptcy brokered by the Obama administration in July, had been counting on the sale of its laggard brands including Saab as a key element of its restructuring. GM and Spyker both declined to detail the issues that had convinced both sides a deal could not be closed against the tight deadline.

Spyker last year sold 43 of its luxury cars and its primary backers include Russian banking tycoon Vladimir Antonov and his Convers Group.

Smith said GM would negotiate with Saab dealers to try to find “a fair way of proceeding” as it drops the brand.

Remaining US dealers had signed termination agreements in June that gave GM the right to terminate their franchises unless a buyer for Saab could be found.
GM had been in talks to sell Saab to niche luxury carmaker Koenigsegg, with the backing of China’s BAIC until November.

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