Saab Could Be Near End Of Road As Sale Plan Fails

The future of Saab was in doubt last night after General Motors (GM), its American parent, said that a deal to sell the troubled Swedish carmaker had fallen through.

GM confirmed that the sale of Saab to Koenigsegg, a Swedish manufacturer of sports cars, had been terminated at Koenigsegg’s request.

The failure of the talks raises the possibility that GM may decide to scrap Saab, as it did last month when it said that it would close its Saturn brand after failing to find a buyer.

Saab, one of Sweden’s best-known brands, employs 3,400 people in the country. About 3,000 people are employed at Saab’s 87 UK dealerships and 100 at its British headquarters.

Without the Saab sale, analysts question GM’s ability to restructure its Opel and Vauxhall operations in Europe. GM wants to raise €3.3 billion (£2.9 billion) from European governments to help to save Opel and Vauxhall after reversing a decision to sell them to Magna, a Canadian car parts manufacturer, and Sberbank, its Russian partner.

Erich Merkle, an analyst at Autoconomy, said that closing Saab could be the best option for GM: “Turning round Saab would be a Herculean task for anybody — it would take a tremendous amount of time and money.”

Fritz Henderson, GM’s chief executive, said that he was disappointed with Koenigsegg’s decision. GM would now assess the situation and announce the outcome next week.

Of its plans to sell its Hummer, Opel, Saab and Saturn core brands, only the sale of Hummer, to Sichuan Tengzhong Heavy Industrial Machinery, of China, has gone through.

Christian von Koenigsegg, the founder and head of Koenigsegg, said: “Unfortunately, delays in completing the deal have led to risks and uncertainties that prevent us from carrying out our business plan.”

Article written by: Times Online
Published on: 08:46 25-11-2009