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GM Won't Support Saab Sale

December 7, 2011
2 min to read


General Motors Co. said Tuesday 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.

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The latest announcement may mean the end of the struggling Swedish luxury automaker as early as this week, according to The Detroit News. Saab's North American headquarters is in Royal Oak.


GM licenses the technology Saab uses to produce several key models. GM has raised concerns about the intellectual property it has licensed to the company.


In early November, GM said it would not support the sale of Saab Automobile AB to two Chinese automakers.


Saab said Monday it was 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.


Saab, which is reorganizing in Sweden under court protection from creditors, has faced mounting financial problems this year as several funding sources fell through.

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It has built few vehicles since late March, its employees have suffered through payless paydays, and it hasn't been able to pay many of its bills.


Saab's restructuring administrator, Guy Lofalk, may end efforts to try to revive Saab, the Swedish business daily Dagens Industri reported. "I immediately have to decide if it really is possible to continue this restructuring," he told the paper.


Last week, GM attorneys met with Lofalk and the Swedish ambassador to the United States, Jonas Hafstrom. The two discussed efforts to save Saab, but the meeting didn't result in any concrete proposals. Saab sent GM a new proposed ownership structure on Friday, which didn't meet GM's concerns.


GM is Saab's former parent company. Saab was one of four brands GM opted to shed during 2009 bankruptcy restructuring.


In October, Pang Da Automobile Trade Co. and Zhejiang Youngman said they had agreed to buy Saab from its Dutch owner Swedish Automobile NV.

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The sale price was $140 million in exchange for $600 million in funding to keep the company afloat.


Reuters reported Pang Da said in China on Monday it is still talking to Saab, though it wasn't named by Saab on Monday as a possible buyer.


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