Saab's Bankruptcy Surprise: GM Scrambles

February 23, 2009

GM received another shock to its shaky operations last week when Saab suddenly and decisively filed for bankruptcy. Dealers were quickly invited to a phone-in conference, but reported that GM had only "sketchy" details and seemed to be working through the options and details - awkwardly - in real time. Potential scenarios discussed include buying back Saab inventory.

Dealers were assured that GM will continue to support warranties on Saab products, provide parts, and uphold all prepaid maintenance contracts. Yet more incentives will be used to coax languishing inventory off dealers' lots.

Sweden rejected GM's request for financial assistance last week, driving the swift bankruptcy declaration. The process under the country's rules is termed bankruptcy re-organization "under a self-managed Swedish court process." Saab will maintain normal operations during the three-month re-organization, after which time the company will either become viable or move into liquidation proceedings.

Initial cost to GM: $127 million in parts shipped as of today, February 23.

[source: Automotive News]

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