Saab Has No Home In Restructured GM Organization
Reorganization Plan Calls For Saab To Become Independent By Year-End
By Kevin Miller
Yesterday was the day that GM’s long-awaited restructuring plan made it to Washington, DC. It confirmed some things we had heard before as well as containing plenty of new information. Some facts that have been confirmed include the fact that unless Saturn is sold or spun-off, it will be phased out at the end of the current product lifecycle, which is in 2010-2011. Also, a decision to sell or phase-out Hummer will be made this quarter. These are major decisions, ones that affect uncounted retailers, suppliers, assemblers, and customers.
One of the big pieces of news surrounds Swedish carmaker Saab. A full member of the GM family since 2000 (GM first acquired half of the company in 1990), Saab has consistently underperformed in the market, though the fact that the automaker has only two vehicle nameplates for sale, which were introduced in 1998 and 2003, respectively, is largely thanks to GM’s stewardship of the brand (or lack thereof). In any case, the paragraph below, from GM’s Restructuring Plan, shows that Saab will be off of GM’s books as of December 31, 2009.
Sweden/Saab—The Company has conducted a strategic review of its global Saab business and has offered it for sale. Given the urgency of stemming sizeable outflows associated with Saab operations, GM is requesting Swedish Government support prior to any sale. The Company has developed a specific proposal that would have the effect of capping GM‘s financial support, with Saab‘s operations effectively becoming an independent business entity effective January 1, 2010. While GM is hopeful that an agreement can be reached with the Swedish Government to support this direction, the Saab Automobile AB subsidiary could file for Reorganization as early as this month.
The word “Reorganization” with a capital “R” is, of course, another term for bankruptcy. The phrase “capping GM’s financial support” means that GM isn’t going to spend any more money on Saab. The Swedish bird is being pushed out of GM’s big nest, and will become a fully independent company by the end of this year. Saab, however, needs extra money to secure that independent future.
That money will hopefully come in the form of loans from the European Investment Bank (EIB), guaranteed by the Swedish government as a portion of the 25 Billion Kronor (about $3.2B) the country earmarked to assist their domestic automakers. Sweden’s Volvo Cars, owned (and for sale) by Ford, has already applied for about $600M. Swedish Enterprise and Energy Minister Maud Olofsson told Swedish television yesterday “it is clear that GM wants to sell Saab.” Olofsson also said the government was prepared to guarantee any loan made by the EIB to Saab.
Our friends at Saabs United (formerly TrollhattanSaab.net) had an informative post yesterday evening with a bit more from Ms. Olofsson, with this brief explanation of a longer interview given in Swedish compliments of a reader comment; What she says is that the government has offered GM all the available loans and guarantees since December, but that GM has refused. Now, she says, Saab contacted the government “this evening” and told them they will themselves hand in a loan application to EIB. So GM is already forcing Saab’s independence by not helping the Swedish company apply for the loans it needs to move forward.
We can expect more news from Sweden later today, when Maud Olofsson is scheduled to hold a press conference, to discuss Saab’s future. Until this point, the Swedish government has maintained the position that Saab is GM’s responsibility, and that they are ultimately responsible for the Swedish company. GM, however, has made it clear in their restructuring plan that they will be washing their hands of Saab by the end of this year.
This is a time full of hand-wringing for Saab devotees, employees, and retailers. Since December we have been waiting for details of Saab’s fate in GM’s Restructuring Plan, while plans were made to move production of the upcoming 9-5 replacement from Russehsheim to Trollhatttan. Now that we know GM’s intentions, we still don’t know what will happen to Saab. Will the company be purchased by another automaker? Will they go out of business? Or will they finally reach the State of Independence featured in their US advertisements from the recent past, and operate as a successful, profitable standalone automaker?
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