Saab Buyer Backs Out Leaving 3,000 Jobs Hanging
GM's planned sale of Saab to Koenigsegg, the Swedish sports car-maker, has collapsed casting doubt over more than 3,000 UK jobs.
The tiny Swedish buyer, which was backed by China's Beijing Automotive Industry Holdings (BAIC), said today that it 'regretted' that it could not follow through on its plans.
In a statement it said: "After six months of intense and goal-oriented work we have come to the painful and difficult conclusion that we are not going to be able to carry out the acquisition of Saab."
GM Europe, Saab's bankrupt US parent, announced in mid-June that it had struck a deal to sell Saab to Koenigsegg and that the sale would close by the end of the third quarter.
The sale was to have secured thousands of UK jobs in dealerships and at Saab's British headquarters.
Saab, one of Sweden's best-known brands, employs 3,400 people in the country. Around 3,000 people are employed at Saab's 87 UK dealerships and 100 at its UK headquarters.
In September, Koenigsegg, which employs only 43 people near Malmo, Sweden, revealed that China's Beijing Automotive Industry Holdings (BAIC) had agreed to back its bid. BAIC was to become a minority shareholder in Koenigsegg.
However, doubts had emerged about Koenigsegg's resources. Despite its tie-up with BAIC it still needed a €400 million loan from the European Investment Bank and wanted the Swedish government to act as guarantor - something it had not yet committed to.
Christian von Koenigsegg, head of the company, said: "The time factor has from the beginning been critical for our strategy to breathe new life into the company.
"Unfortunately, delays in completing the deal have led to risks and uncertainties that prevent us from successfully carrying out our business plan."
Fritz Henderson, chief executive of GM, said he was “disappointed" by Koenigseggs' decision.
In a statement, he said: "GM confirmed today that the proposed sale of its Saab subsidiary was terminated at the discretion of the buyer.
"We are obviously very disappointed with the decision to pull out of the purchase. Many have worked tirelessly over the past several months to create a sustainable plan for the future of Saab."
It said it would now take "several days to assess the situation."
Saab, which is based in Trollhattan, southern Sweden, has been making cars since 1949 and has been loss-making since 2001. Last year its sales fell 25 per cent to 93,295 vehicles - 1.1 per cent of GM's total output.
Swedish unions feared that if Saab collapsed, the jobs toll would hit 15,000 from losses in the supply chain and related activities.
Saab said only in September that BAIC's backing for the deal meant it was now "completely convinced that we will be able to complete the deal by the end of October."
Article written by: Times Online
Published on: 09:12 30-11-2009
