GM To Close Saab After Talks With Spyker Collapse
GM To Close Saab After Talks With Spyker Collapse
General Motors Co. came under fire from the Swedish government Friday after opting to close its Saab unit following the collapse of last-ditch talks to sell it.
The U.S. auto maker had set a year-end deadline to finalize a sale of the loss-making brand, but said unidentified issues had arisen in plans to sell Saab to Spyker Cars (SPYKR.AE) of the Netherlands.
“It shouldn’t surprise anyone that, with that background, issues would arise that are unresolvable.” said GM strategy chief John Smith on a conference call.
Spyker Chief Executive Victor Muller said GM declined to extend the deadline, adding that his company had lined up most of the required funding but was awaiting approval for EUR400 million in backing from the European Investment Bank.
Smith said more time would not have helped complete the deal.
Swedish government officials were more forthright as they face the extinction of the country’s auto industry, though Ford Motor Co. (F) remains in talks to sell its Volvo Cars unit to Zhejiang Geely Holding Group Co., a privately-owned Chinese car maker.
“GM could’ve done much more to help Saab,” Swedish Industry Minister Maud Olofsson told reporters. “We’re surprised and a bit disappointed at the decision,” added Saab Chief Executive Jan-Ake Jonsson.
Spyker emerged after the withdrawal last month of a planned bid by Swedish boutique carmaker Koenigsegg Group AB last month.
The 82-year old Saab brand was expected to ship less than 50,000 units this year, less than 1% of GM’s total production.
GM is focusing on four core brands, opting to close its loss-making Pontiac brand in the U.S., though efforts to sell its Saturn unit also collapsed. It remains in talks to sell its Hummer business to a Chinese machinery group, though that still requires regulatory approval.
Smith said bidders could emerge for Saab’s remaining assets, including two unlaunched new vehicles. It has already agreed to sell some intellectual property and equipment for old Saab models to Beijing Automotive Industry Holding Co., though the Chinese group has not sought further assets.
GM said in a statement that it expects Saab to “satisfy debts including supplier payments, and to wind down production and the distribution channel in an orderly manner.”
Saab employs 3,400 workers globally and had 1,100 dealers. Smith didn’t specify a timetable for the winding down of the company, but said GM would work with dealers to ensure the end comes in an “orderly fashion.”
via Dow Jones Newswires
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