GM May Shut Saab as Koenigsegg Ends Acquisition Talks
General
Motors Co. may shut its Saab unit after Koenigsegg Group AB canceled a planned
acquisition of the Swedish company, a person familiar with the matter said.
GM’s board
will review the future of the bankrupt unit at a Dec. 1 meeting, said the
person, who asked not to be identified because the talks aren’t public. Directors
could opt to keep Saab, as they did when deciding earlier this month to cancel
a sale of the Opel brand in Germany, the person said.
“We will
take the next several days to assess the situation and will advise on the next
steps next week,” GM Chief Executive Officer Fritz Henderson said in a
statement today. “We’re obviously very disappointed with the decision to pull
out.”
The
pullout by Koenigsegg, which said it ran out of time to complete a deal, is the
third brand sale to falter since GM’s July 10 bankruptcy exit. GM backed out of
the Opel sale to a group led by Magna International Inc., and Penske Automotive
Group Inc. withdrew in September from a plan to buy Saturn.
GM has a
contingency plan for Saab similar to a process being used to wind down Saturn,
the person said. Saab owners would continue to be covered by GM warranties and
be assigned to a new dealership for service, the person said.
Saab had
said that the transaction with Koenigsegg, the maker of $1.2 million sports
cars, would close at the end of this month. The deal was postponed after the
European Investment Bank delayed a decision on granting Saab a 400 million-euro
($600 million) loan, which it approved Oct. 21.
‘Time Just
Ran Out’
“We
believed in the plan, we were convinced that it would work,” Koenigsegg
Chairman Augie Fabela said in a telephone interview today. “We came to the
decision after deliberations over the past few days that time just ran out for
us to make the deal happen. It’s up to GM now.”
Saab
received protection from creditors in February after GM said it was cutting
ties with the unit. GM bought Saab from Sweden’s Wallenberg family in two steps
starting in 1990, betting the brand would widen GM’s appeal with buyers seeking
European turbocharged, aerodynamic cars.
Koenigsegg
won the bidding for Saab in June in a deal that would return the
Trollhaettan-based automaker to Swedish control after almost two decades.
Beijing
Automotive Industry Holdings Co., China’s fastest- growing carmaker, agreed in
September to take a minority stake in Koenigsegg Group, the investment team set
up to buy Saab.
‘Risks and
Uncertainties’
“Time
always played a critical factor in our strategy for reviving the company,”
Christian von Koenigsegg, a member of the acquisition group, said in a
statement. “Unfortunately, delays in closing this acquisition have resulted in
risks and uncertainties that prevent us from successfully implementing the new
Saab business plan.”
Henderson
said GM executives had created “a sustainable plan for the future of Saab by
selling the brand and its manufacturing interests to Koenigsegg.”
Saab’s
10-month sales slumped 62 percent to 7,441 cars in the U.S., the world’s
largest auto market. The automaker sold just 513 cars in the U.S. last month.
In Europe,
Saab’s biggest market, 10-month sales plunged 59 percent to 23,590 vehicles, a
steeper decline than for any other major carmaker. October sales in the region
were 1,753, down 65 percent from last year, the Brussels-based European
Automobile Manufacturers’ Association said Nov. 16.
As of Nov.
15, Saab planned to reduce its U.S. dealership body by 37 percent, cutting 81
of 218 dealers.
“It is
surprising,” George Glassman, dealer principal of Glassman Saab in Southfield,
Michigan, said of Koenigsegg’s exit. “It is not what I had hoped to hear, but I
believe it’s a dead issue. In the interim, if you know of a McDonald’s, Burger
King or Dunkin’ Donuts that would like to occupy my showroom, let me know.”
Source: bloomberg.com