Saab will be wound down by GM after no buyer could be found
18 December 2009

Saab is to be closed down by General Motors, after no new buyer for the troubled Swedish firm could be found. Some 3400 people employed directly by Saab are expected to lose their jobs, and 1100 dealers worldwide will have to find new franchises.

GM’s European president Nick Reilly said no deal could be reached with the sole remaining bidder, Spyker Cars.

Hilton Holloway blog: What went wrong for Saab?Saab's history in pictures

“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. In order to maintain operations, Saab needed a quick resolution,” he said.

Unresolvable issues

In a press conference shortly after the announcement was made, GM Vice President of Corporate Planning John Smith said that “during the course of the negotiations with Spyker, unresolvable issues arose on both sides.” He declined to explain the exact nature of the particular issues, but added that “there comes a time in these kind of discussions when it’s clear that no further progress can be made. At that point, the best course for everyone is just to move on.”

Smith did confirm that the failure of Spyker’s bid wasn’t due to lack of support from either the European Investment Bank or the Swedish government. “The EIB supported our negotiations right until they ended this morning.”

“The Swedish government also worked particularly hard to secure a future for Saab,” Smith continued “and was disappointed with our decision to wind down.” Smith went on to suggest, however, that the Swedish government’s refusal to act as an investor in Saab, but only as a potential guarantor of a loan to a separate bidder, made GM’s task to save Saab considerably more difficult.

Economies of scale

Summing up GM’s ownership of the troubled car-maker, Smith said that there had been “no shortage of effort on behalf of GM, over 20 years, to put Saab on a good footing. It was always difficult to integrate the company into GM,” Smith went on, “and to find the bigger economies of scale that would make its business more profitable.”

“We do take responsibility for what’s happened to Saab over those 20 years,” Smith admitted, “but in the end, there was really no more that we could do."

Spyker's reaction

Spyker boss Victor Muller was disapointed a deal couldn't be reached.

Victor Muller: “We sincerely regret that we are not able to complete this transaction with GM. We worked 24/7 for three weeks, but the complexity of the transaction, in combination with the strict deadline, simply did not allow us to complete the transaction in time. Our thoughts are with the wonderful management and employees of Saab in these challenging times.”

Winding down

The next step for GM is for the Saab business to be wound down, its production and distribution facilities to stop and its employees to be made redundant – a process that’s expected to begin in January and take months.

However, General Motors will not put a timescale on the winding up of the company or say how much it will cost. GM Vice President John Smith said, “there’s no definite plan of how long it might take.”

Smith also said that GM had an idea of how much the closure would cost, but wouldn’t disclose the amount. However, it is likely to be considerably more than the short-term cost of keeping Saab open.

It only has one manufacturing site, at the firm’s Trollhatten base, but the 9-5 and 9-4X were due to be made in Germany and Mexico respectively. Both of these cars would have been factored into the factory’s profit forecasts – pulling them out will affect the future of the plants.

Smith suggested that many of Saab’s assets would be sold off piecemeal. In that vein, GM has already agreed a deal with Chinese firm BAIC for the rights to the current 9-3 and old 9-5. The new 9-5 was due to reach UK showrooms early next year, and alongside the 9-4X, is expected to look like a particularly attractive asset to other car-makers seeking to profit from Saab’s demise. However, Smith said that no plans had been made to sell either of these unreleased models.

GM's troubled year

Pontiac and Saturn suffered similar fates to Saab's in the US when GM failed to find a buyer for the firms. GM's remaining European brands are Opel and Vauxhall.

“We will work closely with the Saab organisation to wind down the business in an orderly and responsible manner,” said Reilly. “This is not a bankruptcy or forced liquidation process.”

"Consequently, we expect Saab to satisfy debts including supplier payments, and to wind down production and the distribution channel in an orderly manner while looking after our customers.”

GM also said it will honour all existing warranties for Saab owners.

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Comments
41

18 December 2009

Real shame - GM culls it just when the going was improving - cash injection from BAIC fo rold lines sold off, new 9-5 and 9-4x ready to launch, factory awarded lean award, and then GM just gets impatient for the sake of a few weeks - unbelievable, very sad indeed.

18 December 2009

A shame and not necessary. Lets hope Vauxhall/Opel can break off from GM before they go the same way.

18 December 2009

Very sad, just as the light was coming out from behind the cloud it's gone. C'est la vie I suppose just one less premium choice against the usual German suspects. By the way, "Pontiac and Saturn suffered similar fetes" should be fate. Let's sort out basic word meanings please Autocar.

18 December 2009

So Saab joins Pontiac, Oldsmobile & Saturn in the graveyard. Nice work GM.

I do not think this will truly be the end of Saab, but it will be a while before we see it again.

In this weeks Autocar Holloway talks about how a platform sharing firm can suceed in the 'near premium' sector .... referred to the difficulties Alfa, Saab and so on were having. The answer is Audi (and in the US, Lexus and Infiniti) .... they are selling Skoda's, Golf's and so on at premium prices and doing it well. So it can be done, it just needs patience .... 20 years at least!

18 December 2009

Yet another reason to boycott GM, forever.

18 December 2009

Gutting! Happy Christmas Saab - nice one GM, you did a fine job there! The automotive landscape has just become a less interesting place.

I'm with you Chris576, no GM metal for me.

18 December 2009

Just a small point of clarification: GM never sought a buyer for Pontiac, it just let it die a natural and necessary death. As an owner of a Saturn and a Saab, I am deeply distressed by the loss of the brands, Although Saturn was in reality a left hand drive cousin of Vauxhall, I dearly love my L300, based on the previous Vectra. European styling and luxury at a cut rate price. I will keep it forever, I think.

18 December 2009

I realise that this is desperately sad news and really feel sorry for the workforce; particularly at this time of year. I have to say, however, that this has been coming for years. Everyone likes quirky Saabs, apparently, but no-one buys them. GM are right to close it if there isn't a realistic bid on the table. The place is losing money like it's going out of fashion; Volvo is far more successful and Ford can't get out of it fast enough - doesn't that tell you something? Don't lump Vauxhall / Opel into this; they may lose money but they carry out loads of development work for the Group. Saab contributes next to nothing.

18 December 2009

[quote MDTopdad]Although Saturn was in reality a left hand drive cousin of Vauxhall, I dearly love my L300, based on the previous Vectra. European styling and luxury at a cut rate price. I will keep it forever, I think.[/quote]

Saturn is an example of how unjoined up GM's thinking has been. They developed from scratch a car, platform and engine and teamed them up with a new way of doing car sales with the 'No dicker sticker' ..... only after 10 years did they think to use the existing Opel / Vauxhall designs which suited their brand down to the ground. By then of course it was too late.

GM have been trying to sell Saab, but I suspect on unrealisitc terms .... and sadly their greed / fear / incompetence has killed the brand.

18 December 2009

Heartbreaking, to know the potential the brand had and yet was never realized. SAAB could have been for GM what Audi has become for VW, or Infiniti for Nissan (at least in the States so far). Can anyone remember the lousy Audis from the 70's? Probably not, but they were far inferior to the Mercs and even the -speak it softly- Jags of the time. GM, on the other hand, simply recycled poor components (Gen 1 Vectra became first 900 by GM) and thought that they would cut it as premium, with awful quality and dynamic results.

With a little more focus and ambition, SAAB could now be competing with the A3 (9-2), giving them the necessary volume, and the long-awaited new 9-5 was all done, for God's sake! A model that had been on life support for three years was finally getting a hugely improved replacement, a development that has cost tens of millions and countless engineering hours, all for nothing.

Tremendously short-sighted from GM's part, but that's American management style to you (short-term profits) vs German or Japanese (long-term thinkers).

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