Saab to break from General Motors
February 21, 2009 by David Twomey
Saab, the under-performing Swedish arm of General Motors, is to effectively divest itself of its US parent by seeking protection under Swedish financial laws to operate as a separate entity.
In a statement issued from Saab HQ in Trollhättan, the company says that as a result of GM’s strategic review of the global Saab business the Saab Board has announced today that it will file for reorganisation under a self-managed Swedish court process to create a fully independent business entity that would be sustainable and suitable for investment.
What that means is that the reorganisation is a self-managed, Swedish legal process headed by an independent administrator appointed by the court who will work closely with the Saab management team.
GM, which itself faces mountainous debts and a future that hangs in the balance, refuses to continue funding Saab’s losses alone.
In a survival plan submitted to the US Treasury this week, GM said the Swedish firm would become an independent business as of January 1 next year, after 20 years of GM control.
As part of the process, Saab will formulate its proposal for reorganisation, which will include the concentration of design, engineering and manufacturing in Sweden.
This proposal will be presented to creditors within three weeks of the filing and pending court approval, the reorganisation will be executed over a three-month period and will require independent funding to succeed.
Saab lost about three billion crowns (US$340 million) in 2008, according to documents filed with the Swedish court that granted the company a stay of execution.
The company expects a similar loss this year, blaming slack demand, aging products, overcapacity and high costs.
“We explored and will continue to explore all available options for funding and/or selling Saab and it was determined a formal reorganization would be the best way to create a truly independent entity that is ready for investment,” said Jan Ake Jonsson, managing director for Saab Automobile.
“With an all new 9-5, 9-3X and 9-4X all ready for launch over the next year and a half, Saab has an excellent foundation for strong growth, assuming we can get the funding to complete engineering, tooling and manage launch costs.
“Reorganisation will give us the time and means that help get these products to market while minimising the liquidity impact of Saab on GM.”
Funding for the restructured company will need to be secured during the reorganisation process and will be sought from both public and private sources.
Swedish daily Dagens Industri said today that GM is prepared to pump in US$400 million into Saab if the Swedish state guarantees a further loan of US$590 million.
The Swedish government is said to have indicated it will pump more funds into Saab to keep the company alive if it can see a future for the company’s products.
General Motors says that Saab will continue to operate as usual and in accordance with the formal reorganisation process, with the Swedish government providing some support during this period.
The company said that the reorganisation should have no impact on other GM operations.
Print it: 
SAAB lost its way when it was bought by GM. I hope they go back to making technically innovative cars that actually matter to the market like the SAAB 900 Turbo which was a great car for its time.
*****PRIMO!*****
Without GM SAAB will die.
At least GM will keep getting *loans* from the US GovCo.
Sad to see SAAB die, but to many brands and not enough customers
Cheers
F-0
“Swedish firm would become an independent business as of January 1 next year”
That is still ages away, it maybe too late.
They should consider pushing forward the release of the new 9-5 aswell.
for a 12 year old car the sabb 9-5 still looks fresh from he outside
the most technically innovative thing Saab makes are their Fighter Jets followed closely by their [Scania] trucks/Busses
That’s a different company Wheelnut.
This is wonderful news, hopefully Saab will return to making innovative cars again.
The amazing thing is how badly a hole GM are in, especially when they sell the most(or second most behind Toyota) cars in the world. Shows you how badly GM are at management. Sure all the car companies are feeling the pinch, but not as many are going from everything to nothing, look at Toyota.
I realise that they are “different companies” in the same way Toyota and Lexus are “different companies” but as they’re owned by the same “parent company – who also own Scania.. why couldn’t Saab make their cars [particularly the interior] look morelike the cockpit of one of their jets?
They came close with the roadster [above photo] but that is a concept which is unlikely to ever see the light of day.
Finally, now bloody roll out new models on that new GM Epilson II platform!!!
Are you kidding O? The 9-5 screams 1990s. Saab should have withdrawn it 2 years ago until the new model was ready, instead of making itself a laughing stock by attacking it a chrome gun and calling it a new model.
Who is going to buy a car from a company that is under external administration?
It’s not the kind of sales pitch that will stimulate sales.
Saab surely cannot get out of this hole…
I agree with O regarding the 95 – given that GM didn’t invest enough in Saab it’s not actually a bad car considering. The current 93 is OK on the eye although behind GM’s current product the Insignia.
I reckon Saab will turn itself around to become profitable again but they do need a greater range of cars to do it.
the 12 year old 9-5 doesn’t actually look any more modern than its predecessor the 9000, and depreciates just as fast. The brand is severely in the crap, the GM tenure was no help at all, so where does it go from here?
Answers please, on the back of an envelope.
Many people who contribute to this blog have pretty strong views, often expressed pretty colourfully, but we don’t need comments like the one above.
The Swedish Court will appoint an Insolvency Administrator who will manage the Saab company henceforth. He has 3 months to obtain new funding or wind up the business. The Swedish government re-confirmed its earlier stance that it will not risk taxpayers’ money to bail out this unviable business, after the filing of the Corporate Insolvency by Saab on Friday.
Saab has lost money in 19 years out of the previous 20 years. In 2008, it only sold 98,000 cars across the world. GM has been trying to sell the business for months but did not get a single bid.
Saab’s existing management is placing some spin about its prospects of remaining open for business, but this is merely to try to sell off existing stock. Saab will soon be history. In 3 months from now, it will be all over.
I checked those figures again. Saab sold only 93,000 cars in 2008; not 98,000.