News - Saab
Saab goes to court in survival fight
Sweden’s Saab set for sweeping rejig as GM tries to offload it
23 Feb 2009
GENERAL MOTORS has placed Saab Automobile into Swedish court-protected reorganisation as it tries to fashion its unprofitable subsidiary into a fully independent business for sale.
GM, which took full control of Saab in 2000, says Saab needs $US1 billion ($A1.54b) to keep operating, with GM offering to put up $US400 million ($A618m).
It has sought the balance from the Swedish government, which so far has rejected the request, saying GM “or someone” needs to provide more capital to make the survival plan realistic.
If GM can’t find an investor to prop up the ailing company by the end of the year, it has said it will liquidate it.
Saab Australia – part of the GM Premium Brands group – is closely watching the moves in Sweden, but says it is business as usual in Australia, with no plans to cut employees or dealers.
Under the terms of the Swedish court application, Saab Automobile has three months to reorganise Saab in the self-managed process.
Over the next three weeks, Saab plans to devise a plan to concentrate its design, engineering and manufacturing in Sweden, and present it to creditors before they meet to decide the company’s fate in April.
Left: Saab Automobile managing director Jan Ake Jonsson.
Announcing the court move, Saab Automobile managing director Jan Ake Jonsson said: “We explored and will continue to explore all available options for funding and/or selling Saab, and it was determined a formal reorganisation would be the best way to create a truly independent entity that is ready for investment.
“With an all new 9-5, 9-3X and 9-4X all ready for launch over the next year and a half, Saab has an excellent foundation for strong growth, assuming we can get the funding to complete engineering, tooling and manage launch costs.
“Reorganisation will give us the time and means that help get these products to market while minimising the liquidity impact of Saab on GM.”
While the 9-5 and 9-3X were to be built in Sweden, the 9-4X crossover was scheduled to be built in Mexico alongside the Cadillac SRX.
GM has promised to cover development and tooling costs for the three new models, while continuing technical support and maintaining parts supply through licensing agreements.
Saab Australia spokesperson Rebecca Clout said the Swedish reorganisation act required companies to have a reasonable chance of success before courts would approve applications for reorganisation.
“It is definitely a self-managed process where they look very closely at the company, but it is not necessarily a bankruptcy filing. It goes through this review so a stronger, better Saab that comes out of it,” she said.
“And definitely no change in Australia. I understand this is a three-week process, but from an Australian point of view, in that time, it is business as usual.
“There are no changes to what we are doing in terms of an employee component or dealer component.
‘We are focussed on selling cars and continuing with that objective during this process.”
Saab Automobile has about 4000 employees. Last year, it lost three billion kronor ($A528m), according to documents filed to the Swedish court.
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