GM Shuts Down Saab
General Motors has decided to discontinue its Swedish brand, Saab Automobile, after talks failed with a Dutch automaker, Spyker Cars, to sell the unit. The Detroit automaker was struggling hard to conclude the sale by the end of this month.
A few days back, Beijing Automotive Industry Holding Group (BAIC) – China’s fifth largest automaker – had agreed to buy powertrain, engine and gear-box technology for Saab’s 9-5 and 9-3 sedans technology at an undisclosed price. At that time, GM was planning to liquidate other assets associated with Saab, including its headquarters, which involves more than 3,000 jobs in Sweden.
However, GM was eyeing other bidders for Saab, who might be interested in buying out the complete operation, including its production hub in Trollhattan, Sweden. Earlier this year, Shanghai Automotive Industry Corp. (SAIC) intended to acquire a stake in the unit, teaming up with Swedish luxury sports car maker Koenigsegg.
However, that deal did not work out. Later, BAIC agreed to provide financing to Koenigsegg, who pulled out of a tentative deal to buy the unit last month.
The Saab closure would cost 3,400 jobs worldwide. The brand has 1,100 dealers, whom GM has promised to honor warranties after the closure.
In 1989, GM acquired a 50% stake and management control of Saab for $600 million after the brand’s split from Swedish truck maker Scania. In 2000, GM bought the remaining ownership of the brand for $125 million. However, the automaker had never been successful with the brand.
GM has put the Saab unit up for sale after it pulled through a bankruptcy funded by the U.S. government in July. The automaker is currently focusing on its remaining four core brands – Chevrolet, Cadillac, Buick and GMC.
