It’s been an emotional ride, but it looks like it has come to an end: General Motors announced today that it could not conclude the sale of Saab Automobile AB and that it will begin “an orderly wind-down of Saab operations.”
GM has been hard at work trying to find a buyer for Saab since January of 2009 as part of its restructuring process. Swedish super car maker Koenigsegg Group AB dropped out of negotiations to buy the brand in November. Beijing Automotive Industry Corporation (BAIC) applied to buy Saab before Koenigsegg, but after being rejected by GM became a minor backer of the Koenigsegg deal. After Koenigsegg pulled out, GM closed a deal with BAIC for powertrain technology and tooling for certain Saab 9-3 and 9-5 models. Then, sometime in the beginning of December, GM entered into negotiations to sell the Swedish brand and its assets to Spyker Cars. Today’s announcement marks the unsuccessful end of those negotiations.
After Koenigsegg, Spyker Auto was the only party qualified by GM to bid on Saab. As part of GM’s efforts to become a leaner organization, it has decided to focus on its four core brands – Buick, Cadillac, Chevrolet, and GMC – and several regional brands, including Opel/Vauxhall in Europe and Holden in Australia and the Pacific. As part of those efforts, GM created a self-imposed deadline to either sell or shut down Saab by the end of 2009. So far, The General has shut down its Pontiac and Saturn brands, having sent them to what we’ve termed the automotive graveyard (to join Oldsmobile). The Hummer brand is in the process of being sold to Sichuan Tengzhong, a Chinese heavy machinery maker. The development with Saab isn’t expected to affect that deal.
GM Europe president Nick Reilly had the following to say about GM’s failure to successfully sell Saab:
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. We regret that we were not able to complete this transaction with Spyker Cars. We will work closely with the Saab organization to wind down the business in an orderly and responsible manner. 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 stated that Saab will continue to honor warranties while providing service and spare parts to current Saab owners around the world.
The GM Authority Take
GM should be embarrassed of itself right now! Not only did it mismanage Saab from day one, losing over $5000 on every Saab sold under its ownership, it’s about to shut down a global brand that employs more than 4000 people – all due to its own ignorance: GM didn’t provide Saab with a proper strategy or research and development funds to be able to successfully compete in the marketplace. We will have an in-depth look into this mess shortly and you can be sure we’ll talk about it in depth on this week’s GM Authority Weekly podcast on Tuesday.
Check out GM’s full press release after the break.
Saab Sale Cannot Be Concluded
Brand to be Wound Down
Detroit. General Motors announced today that the intended sale of Saab Automobile AB would not be concluded. After the withdrawal of Koenigsegg Group AB last month, GM had been in discussions with Spyker Cars about its interest in acquiring Saab. During the due diligence, certain issues arose that both parties believe could not be resolved. As a result, GM will start an orderly wind-down of Saab operations.
“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,” said GM Europe President Nick Reilly. “We regret that we were not able to complete this transaction with Spyker Cars. We will work closely with the Saab organization to wind down the business in an orderly and responsible manner. 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.”
Saab will continue to honor warranties, while providing service and spare parts to current Saab owners around the world.
As part of its efforts to become a leaner organization, GM began seeking a buyer for Saab’s operations in January. Last week, Saab Automobile AB announced that it had closed on the sale of certain Saab 9-3, current 9-5 and powertrain technology and tooling to Beijing Automotive Industry Holdings Co. Ltd. (BAIC). GM expects today’s announcement to have no impact on the earlier sale.
As the company continues to reinvent itself, GM has been faced with some very difficult but necessary business decisions. The focus will remain on the four core brands – Buick, Cadillac, Chevrolet and GMC – and several regional brands, including Opel / Vauxhall in Europe. This will enable the company to devote more engineering and marketing resources to each brand and model.
A media conference call with John Smith GM Vice President, Corporate Planning and Alliances will take place at 9:45 a.m. Eastern Time.
Call-in-details are as follows:
Teleconference Dial-In Number(s) for Media:
United States: (800) 230-1059
International: (612) 234-9960
No Passcode required. Operators will request Name & Affiliation
General Motors Company, one of the world’s largest automakers, traces its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall, Wuling and Jiefang. More information on the new General Motors Company can be found at www.gm.com.
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