Spyker The Only Bidder For Saab; Sweden Looks On And Sighs

January 6, 2010
2008 Saab 9-3 Convertible

2008 Saab 9-3 Convertible

Last week, as the automotive world counted down the clock on Ed Whitacre's self-imposed December 31 deadline to sell Saab, General Motors' CEO had a change of heart and gave would-be buyers of the troubled Swedish brand an extra week to get their act together. Unfortunately, we're not entirely sure that pushing back the deadline to January 7 has helped Saab, its fans, or its bidders.

For starters, an inside source has confirmed that Dutch sports car manufacturer Spyker is the only company vying for Saab, which means that BAIC (from China) and Merbanco (from Wyoming) have both bowed out. According to Automotive News, Spyker's biggest problem in cinching the deal has been securing the financing necessary to make GM a suitable offer. That's not surprising, given the tightness of the global credit market -- to say nothing of the scope of the project. (More on that in a moment.)

The government of Sweden has expressed concern over Saab's impending doom, but it remains outside the fray. The country will send a delegation to the U.S. next week to discuss the sale -- but of course by that point, GM's deadline will have passed. Sweden's formerly upbeat, bullish state secretary, Joran Hagglund, now sounds slightly more resigned to Saab's fate than he's been in the past: "As we understand it, GM has not closed the door to a sale [of Saab], even if the official line is a wind-down.... We want to make totally sure they [GM] have all the information they need." Unless that's Hagglund's version of a veiled threat, we're pretty sure that GM has more info than it needs.

Now, we at TCC are normally an optimistic group, but in this case, that optimism is very, very tempered. On the upside, Spyker has clearly shown a great deal of tenacity in its bargaining, but our guess is that GM's extension of the sale deadline is a symbolic gesture -- something to reward Spyker for its hard work and to avoid burning a bridge that might prove useful down the line. We doubt GM holds out too much hope that Spyker will come back to the table with an acceptable offer. To secure financing for such a huge project would be difficult at any time, much less now, as the financial sector is just beginning to recover and lending institutions implement more guarded policies. And let's not forget that Saab has consistently lost money since it was bought by GM in 1989. For Spyker to prove to banks and investors that it has a business plan to stanch over 20 years of money-bleeding...well, that would take some serious work.

And it should go without saying that we don't expect Sweden to come riding to Saab's rescue. The government of that country has already made it abundantly clear that it doesn't have the resources or interest to run Saab.

That's not to say that General Motors wouldn't love to make a deal: it would mean some added cash in the bank, and it would be the first completed deal since the company began its fire sale on unwanted brands last year. (HUMMER's sale has yet to be finalized, and at the moment, we're 50/50 on its completion.) But Ed Whitacre has made it clear that he's not going to be a foot-dragger; between abrupt staff changes and his previous sale deadline, the man clearly means business.

We're not quite ready to start hammering that last nail in Saab's coffin, but we're heating up the stove just in case we need to rail out a batch of funeral fudge.

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