End of road for SAAB

 

WASHINGTON: General Motors Co (GM) said yesterday it would shut down its Swedish car brand Saab after talks failed to produce a buyer for the money-losing unit.

GM said in a statement it failed to reach an agreement with Dutch sports-car maker Spyker on a sale of the division. This followed the withdrawal of a bid last month from Swedish sportscar maker Koenigsegg Group AB.

The Detroit carmaker said that it had been in talks with Spyker but that "during the due diligence, certain issues arose that both parties believe could not be resolved".

"Despite the best efforts of all involved, it has become very clear that the due diligence required to complete this complex transaction could not be executed in a reasonable time," GM Europe president Nick Reilly said.

"In order to maintain operations, Saab needed a quick resolution. We regret that we were not able to complete this transaction with Spyker Cars. We will work closely with the Saab organisation to wind down the business in an orderly and responsible manner. This is not a bankruptcy or forced liquidation process."

GM said there would be no change in a plan announced earlier this week to sell some Saab assets to China's Beijing Automotive Industry Holding Co.

State-owned BAIC will acquire the technology for Saab's 9-3 and 9-5 car models, turbine engines and gearboxes, allowing the Chinese firm to develop its own-brand cars using the Swedish carmaker's technology.

GM said that in the wind-down of Saab, it would satisfy debts including supplier payments and would continue to honor warranties and provide parts to Saab owners around the world.

Saab employs some 3,400 people in Sweden and sold just over 93,000 cars worldwide in 2008.

Up to an estimated 15,000 jobs could disappear in a Saab shutdown, including those of suppliers and subcontractors, and if they also shut down that could pose a problem for Sweden's other carmaker Volvo, owned by US-based Ford Motor Co.

GM's to close Saab was sad news, the Swedish government said yesterday, lashing out at the US car giant for not doing enough for the iconic marque.

"GM owns Saab and GM could have done much more for Saab over the years," Enterprise Minister Maud Olofsson told a press conference in Saab's hometown of Trollhaettan.

"It is very dismal. Very sad news for all of the employees and it comes at the worst possible time," the minister was quoted as saying by Swedish news agency TT.

Saab chief Jan Aake Jonsson told the press conference he was "very disappointed".

"But now the decision has been made and we are waiting to see how GM plans to carry out the winding-down," he said. - Agencies