News - Saab
Saab sale falls through
Saab on the brink as Koenigsegg pulls the pin on sale deal with GM
25 Nov 2009
THE future of Swedish car-maker Saab Automobile AB hangs by a thread today after Scandanavian supercar builder Koenigsegg Group AB pulled out of a deal to buy the company from General Motors.
The fate of the prestige car marque is now expected to be decided next week by the GM board at its meeting on Tuesday, December 1.
With no other bidder seemingly on the horizon, GM appears to be faced with a tough but simple decision: keep it or close it.
The collapse of the Saab sale after six months of negotiations follows hard on the heels of the failure of similar deal to sell Saturn to American motor industry mogul Roger Penske, and GM’s withdrawal from the sale of Opel after months of wrangling with parts-maker Magna International.
The decision by Koenigsegg to abandon the purchase of Saab was announced jointly by GM president and CEO Fritz Henderson and Koenigsegg founder and CEO Christian von Koenigsegg.
Mr Koenigsegg blamed delays in the process for the decision to withdraw.
“Time always played a critical factor in our strategy for reviving the company,” he said in a statement. “Unfortunately, delays in closing this acquisition have resulted in risks and uncertainties that prevent us from successfully implementing the new Saab business plan.”
Left: Koenigsegg CEO Christian von Koenigsegg. Below: GM CEO Fritz Henderson.
Mr Henderson said: "We're obviously very disappointed with the decision to pull out of the Saab purchase.
“Many have worked tirelessly over the past several months to create a sustainable plan for the future of Saab by selling the brand and its manufacturing interests to Koenigsegg Group AB.
“Given the sudden change in direction, we will take the next several days to assess the situation and will advise on the next steps next week."Koenigsegg’s purchase of Saab and subsequent investment in its facilities and products was to be have been funded by a €400 million ($A650m) loan from the European Investment Bank, guaranteed by the Swedish government.
The arrangements appeared to be going smoothly, but Bloomberg news service reports that Koenigsegg wanted all of the money in advance when the bank only wanted to hand it out in tranches.
Saab had been placed in administration in February, surviving on Swedish government aid, after GM itself slid into Chapter 11 bankruptcy.
GM and Koenigsegg announced the “memorandum of understanding” of the sale in June, when Koenigsegg – which makes just 20 vehicles a year at its 45-person headquarters in Angelholm, on Sweden's southwest coast – out-bid two other consortiums from the US.
The problem for GM now is whether it can swallow Saab as well as Opel and Vauxhall back into its new-look European operations, which are still the subject of intense negotiations for government aid.
GM’s is also still yet to completely seal the deal to sell its Hummer subsidiary to Chinese engineering company Sichuan Tengzhong Heavy Industrial Machinery Co.
In Australia, news of the Saab sales talks collapse came as a shock to the Holden-based GM Premium Brands which distributes the Swedish marque here.
Holden spokesman Scott Whiffin told GoAuto that GM Premium Brands did not expect any further news on Saab’s future for at least a week.
"We've obviously seen the news out of Sweden overnight and I think, like a lot of people, we're still trying to digest it,” he said. “It would be fair to say it was pretty unexpected.
“GM have said they'll take a couple of days to work it through, so we don't expect any developments until at least next week.
“For us here in Australia, the message remains the same – it's business as usual."Last month, the network sold just six new Saabs – five Saab 9-3 sedans and one 9-3 ConvertibleAs GoAuto reported earlier this month, the ageing Saab 9-5 flagship has been axed from the range and the 9-3 range slashed by half.
Several Holden dealers spent millions of dollars on new Saab dealerships since GM took over Saab, distributing the brand through the GM Premium Brands operation, what was also to include Hummer and Cadillac.
Those retail operations now face a bleak future unless GM finds a way to quickly save Saab.
In the US two weeks ago, GM said Koenigsegg planned to reject 81 of Saab's US dealerships, leaving the franchise with 137 dealers after the sale.
Now, all of them might go.
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