Saab 10 days from bankruptcy

New Saab 9-3 SportCombi

Board of Directors in secret talks

By Zack Newmark
February 19, 2009 8:01 PM
Filed Under: Corporate/Financial, European, Industry, Saab

Saab may be less than two weeks away from going belly up, according to parent company General Motors. GM asked the Swedish government for financial assistance to the tune of $568 million.

But getting the money from the Swedes will probably not happen. Swedish Industry Minister Maud Olofsson said neither she, nor the Swedish government, would bailout the company.

4,500 people work at the Saab Trollhaettan factory in the south of Sweden. Going bust would mean the loss of those jobs, and thousands more who work for suppliers that rely on the company.

GM requested the money to keep Saab above water long enough to seal a sale of the brand. Olofsson responded to this by saying, "The Swedish state and taxpayers in Sweden will not own car factories."

Olofsson puts the blame squarely on GM for Saab's current problems, saying GM concentrated on products people don't really want. She also said that if GM had been more innovative, and developed more fuel efficient vehicles sooner, they would not be in this mess. GM took a majority stake in Saab in 1990, and acquired the rest of the company ten years later.

Olofsson continued to say that Saab "has been running at a loss for so many years it would be irresponsible for me to stand here and say, sure, we are going to use taxpayer money in this way."

Saab's Board of Directors is reportedly in secret talks this week to discuss what to do with the company. They have the opportunity to file for reorganization, which allows them protection from creditors as they attempt to create a plan to make them profitable. As opposed to bankruptcy, creditors have to be convinced that a writedown of the debts they are owed is in their best interest. If they agree, they cannot attempt to force a liquidation. If they disagree, the reorganization process will halt.

Should they proceed with reorganization, they may sever legal ties to GM, and continue to press the Swedish government for assistance.

Source: upi.com

Comments

pzigly
February 19, 2009 8:27 PM
It took a woman to finally say no to GM. The outcome may be bad, but sometimes tuff love is the way to go.

jandrews90
February 19, 2009 8:51 PM
In one way i'm glad someone is finally letting GM suffer for it's own mistakes, on the other hand I hope SAAB will somehow come out of this and pull through, maybe from some random Indian investor even? lol

zdenda20
February 19, 2009 9:11 PM
This is sad...SAAB make quality cars...I dont understand why the US cars (that - lets face it - suck) get the money, while a prospective branch of their company has to suffer:( Plus their new concepts were pretty cool and inovative!

Iconic
February 19, 2009 10:36 PM
God I hate GM. I can't they let such a coveted brand just rot away. Wagoner should be put in jail for this atrocity.

Bristol411S3
February 19, 2009 10:46 PM
Maude is spot on though. Gm has, for the main, brought this on themselves. Why should anyone not associated with the company have to pay for their mistakes?

Viking79
February 19, 2009 11:37 PM
My first car was a (pre-GM)Saab. Sure it was in the garage alot (Saab being an acronym for Stop At A Bank), but it also had a tremendous amount of character. I would be extremely sad to see this brand go under. Especially when it seems that the trade off is that GM duplicated many of it's craptacular vehicles (cavalier/cobalt, Suburban, etc) into identical vehicles with a different badge (sunfire/G5, GMC Suburban, etc).

DieselDog
February 20, 2009 1:14 AM
Way to go, Maud! I do not want to see my tax dollars (good money) being thrown to those who CONSISTENTLY MISMANGAGE their finances (GM, Chrysler, CitiBank, etc.) What a stupid idea! I agree that the companies should either shape up on their own and proove their mettle, or go cease to exist in current fashion. Soome savvy investor may take over. If so, great for SAAB.

wjaprep
February 20, 2009 5:14 AM
See what happens when American companies buy Europeans ones? I'm glad Mercedes escaped when they did, No American company should be allowed to any European car company. (someone save Volvo please)

tbrodie
February 20, 2009 2:25 PM
It's easy (and popular) to blame GM. Opel seems to have done fine with GM and Saab borrows from their parts bin. I doubt Saab would have made it this far on their own. When GM aquired them, they only had two dated models. Their reliability was not stellar then either. The turbo was what saved them from the grave in the 80's.

Front wheel drive is not a novelty and their price points, along with Volvos are not competitive with other European brands. These cars appeal to those who specifically don't want to buy German.

I wonder what the Prime Minister had in mind. Saab's products are not less fuel efficient than its competitors. Maybe she thinks it should have been reinvented down market.


Edited by user on February 20, 2009 at 2:37 PM
GoodnessGift
February 20, 2009 7:43 AM
Saab designs are in still in the 80s, I agree with the minister, it was not about the money, it is about ending the shame in car industry.

The following cars should be the only car supplyers for the human race for ever: Bentley Mercedes - Benz Porsche Nissan Jeep Lamborghini

And if these are the only companies that supply automobiles, we will never see any losses, even these companies will be always busy and more jobs will be opened.

regards,

BabyMilo
February 20, 2009 8:31 AM
NO not SAAB, i love SAAB this suks =(

trekkerbin
February 20, 2009 11:55 AM
If GM is doing such a bad job for SAAB, then SAAB should had gone long ago, instead, they statyed on the market for more than 15 year after GM acquire them. What I am try to say is that, SAAB has its own design ques, and they should have make the best use of it, not just blame everything to their mother company. I think that GM give them enough control for themselves. What is most important now is how to save SAAB from bankrupcy, and how to re-establish such legendary Sweden car company.

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