GM says Saab closing, no viable bid yet

GM Vice Chairman Bob Lutz said that the U.S. automaker would press ahead with closing down Saab unless a new bid emerged that was "financially better for us than the wind-down."

GM said last week that it had hired AlixPartners, the restructuring firm that assisted in its U.S. government-backed bankruptcy last year, to handle the wind-down of Saab.

"The offers we've received so far in terms of risk and financing up-front just have been as good as winding it down," Lutz told reporters.

Joran Hagglund, Sweden's state secretary for industry, who was in Detroit on Monday, said GM representatives had conveyed the message that Saab was unlikely to be saved by an eleventh-hour deal.

"Our impression is that the consideration of the bids still continues. Based on that there is a small, small chance that there can be a sale of Saab," Hagglund told Reuters.

"But of course, time is short," he said. "Due to the fact that they have already begun the liquidation process, time is limited."

In response to the tough line from Detroit, Saab workers said they would walk away from production lines on Tuesday at Saab's production hub in Trollhattan, Sweden.

IF Metall union representative Annette Hellgren said Saab production, which was restarted on Monday, would be stopped for at least an hour. Workers will also send an email to Whitacre pleading with him to sell Saab, representatives said.

"The demonstration is to put pressure on GM," Hellgren said.

Meanwhile, Dutch luxury carmaker Spyker, which last week said it had submitted an improved bid for Saab, said it remained hopeful a deal could be reached.

"GM has said no bid is acceptable so far. I think you have to emphasize the words so far," Spyker Chief Executive Victor Muller told Reuters in Detroit. "They are still in the middle of the evalution process. Talks are still continuing."

'UNTIL ONE MINUTE BEFORE MIDNIGHT'

Saab has been consistently unprofitable in the 20 years that it has been controlled by GM. Lutz said the US automaker had been wrong to assume that "something would come along" to change its financial performance.

"For years GM has been procrastinating when it comes to Saab," Lutz said. "I'm glad to see that for once GM is sticking with a decision to wind something down."

Lutz said that any bidder now has a limited time to come forward with an offer that would cause GM to reverse its decision.

"We're listening," he said, adding that GM would be open to offers from potential buyers "until one minute before midnight."

GM's attempts to integrate Saab into its global line-up limited the brand's appeal to enthusiasts who liked its early hatchback styling and turbo-charged engines.

Saab employs about 3,400 in Sweden. The Swedish government has announced public funding to help offset the economic loss from its closure.

Spyker's Muller said that while GM "had hit the wind-down button" on Saab, that decision could still be reversed. He said he expected to meet with GM representatives and with Hagglund in Detroit this week.

GM executives said there were no plans to sell tooling or engineering for the just-completed Saab 9-5 sedan to another car maker. That model will not be relaunched under another GM brand such as Buick, Lutz said.

"It may be, unfortunately, that it just never sees the light of day," he said.

Saab sold just over 93,000 units in 2008, accounting for 1 per cent of GM's global sales volume.US sales for Saab cars dropped almost 64 per cent in 2009.

 

 

Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.

 

Comments

Comments