GM Intends To Block Sale Of Saab
General Motors said on December 6 it will not support the latest proposed deal to sell its former Swedish unit Saab to a Chinese consortium.
"We have reviewed Saab's proposed changes regarding the sale of the company. Nothing in the proposal changes GM's position. We are unable to support the transaction," GM spokesman Jim Cain said. The latest announcement may mean the end of the struggling Swedish luxury automaker. GM licenses the technology Saab uses to produce several key models.
In early November, GM said it would not support the sale of Saab Automobile AB to two Chinese automakers. Saab said on December 5 it is in talks on a revised deal to sell itself to one of the automakers — Zhejiang Youngman Lotus Automobile Co. Ltd. — and an unnamed Chinese bank.
"The discussions include a short-term solution to enable Saab Automobile to pay the November wages and continue reorganization. The outcome of the discussions is still uncertain. Any possible transaction would be subject to the approval of the relevant stakeholders," Saab said.
Saab, which is reorganizing in Sweden under court protection from creditors, has faced mounting financial problems this year as several funding sources fell through. It has built few vehicles since late March, and its employees have suffered through payless paydays. On the brink of liquidation, it agreed to sell itself to two Chinese companies for $140 million in exchange for $600 million in funding to keep the company afloat.
GM is Saab's former parent company, and it was one of four brands GM opted to shed during its 2009 bankruptcy restructuring. In October, Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automobile Co. said they had agreed to buy Saab from its Dutch owner Swedish Automobile NV. Pang Da in China is reportedly still talking to Saab, though it wasn't named by Saab on Monday as a possible buyer. GM is the largest automaker in China through its joint ventures; it has raised concerns about the intellectual property it has licensed to Saab.
The 9-4X has been in manufacture for Saab in Mexico this year, but 2012 versions have not been discussed. The deal must win approval from the European Investment Bank, the Swedish, and Chinese governments. Saab's sales in the United States fell to 5,800 in 2010, the year GM sold it, from 49,000 in 2003. "The figures don't lie," Saab Chairman Victor Muller said in an interview in May.
Through October, Saab has sold 4,984 vehicles in the United States. There are 1.5 million Saabs worldwide, including 300,000 in the United States.