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GM has announced that it could not close a sale of its Saab division--and that the division will be shuttered.
General Motors had been negotiating for most of this year with other car companies interested in acquiring the Swedish automaker. Just last week, GM reached an agreement to sell the tooling for the previous-generation Saab 9-3 and the Saab 9-5 to China's BAIC. GM had negotiated with Swedish supercar maker Koenigsegg to take over the brand, with a $500 million loan guarantee to be arranged with Chinese investors and the Swedish government. Koenigsegg was unable to complete the deal, and GM had until today been in talks with Dutch supercar company Spyker on taking over the Saab name.
"There's been no shortage of effort in the past 20 years to put Saab on some long-term footing," a GM executive said, when asked if General Motors had successfully steered the brand in its two decades of ownership. "For no lack of effort, we've not been successful."
Those talks have ended, and General Motors now says it will close the Saab brand in an "orderly" fashion--leaving an entirely new 2010 Saab 9-5 on the table without ever putting it in showrooms, and a stillborn 9-4X crossover based on the 2010 Cadillac SRX also falling to the cutting-room floor.
As for the vehicles that had been in the Saab portfolio and product plan, GM executives told High Gear Media this morning there's no current plan to sell the tooling and intellectual property for the fully developed 2010 Saab 9-5 to another car company, though the situation is still under study. The vehicles in development and the company itself could still find a savior, GM executives suggest, but the wind-down process will go ahead in January.
GM says it will continue to honor all Saab warranties.
General Motors took a 50-percent stake in Saab in December 1989--twenty years ago this month--and acquired the remaining 50 percent in 2000.
GM estimates some 3,400 employees worldwide will be affected by the Saab closure, with the majority in the Swedish headquarters in Trollhattan.
The full press release from GM follows:
General Motors announced today that the intended sale of Saab Automobile AB would not be concluded. After the withdrawal of Koenigsegg Group AB last month, GM had been in discussions with 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.
As the company continues to reinvent itself, GM has been faced with some very difficult but necessary business decisions. The focus will remain on the four core brands – Buick, Cadillac, Chevrolet and GMC – and several regional brands, including Opel / Vauxhall in Europe. This will enable the company to devote more engineering and marketing resources to each brand and model.