News - Saab

Saab future on the line

Sad Swede: GM is trying to find a buyer for Saab so it can continue to produce models such as the Turbo X.

Saab deadline as GM deserts ‘unaffordable luxury’

20 January 2009

By DAVID HASSALL

GENERAL Motors product chief Bob Lutz has described its loss-making Saab subsidiary as “a luxury we can no longer afford”.

To make Saab more attractive to potential buyers, GM is reportedly preparing to turn it into a separate company again, with an independent board and finances.

Time is running out for the Swedish brand as GM said it would determine the company’s future by February 17, when it has to submit a business plan to the US government as part of its deal for bailout loans of $US9.4 billion.

A company source in Europe said Saab had been negotiating with GM and the Swedish government about becoming more independent, with its own balance sheets so that potential investors can see what they are buying.

Mr Lutz told British magazine Autocar that Saab had never made a profit and had cost GM up to $US800 million a year since it was acquired. GM took a controlling 50 per cent share of Saab in 1990 and bought the remaining shares in 2000.

“The fact that we all liked Saabs has meant we have indulged it,” said Mr Lutz of GM executives’ attachment to the brand, adding that it has been on “GM life support”.

Mr Lutz would not comment on the future of the next-generation Saab 9-5, which is due in late 2009, but a union official told Automotive News Europe that the long-awaited mid-size car would go into production in Sweden rather than move to GM-Opel’s plant at Russelsheim as previously planned.

The official said that Saab also planned to move all of its operations back from Russelsheim to Sweden, including design and R&D work.

Meanwhile, the future of Sweden’s other carmaker also remains uncertain, with Ford boss Alan Mulally saying in Detroit last week that he has held talks with several bidders for Volvo, the last survivor of Ford’s Premier Auto Group that once included Aston Martin, Jaguar and Land Rover.