Saab Wins Bankruptcy Protection in Sweden, says Goodbye to GM
After a 20-year marriage in which the niche Swedish-based automaker lost money every year but one, General Motors announced that Saab would have to find a new parent company or fly on its own before the end of the year. Saab executives are banking on the latter, as the company was granted bankruptcy protection under Swedish law on Feb. 20, the same day GM announced Saab's fate. Under the terms of the filing, Saab will undergo reorganization as a separate, stand-alone entity over the course of a three-month period.
In a press release from GM's web site, Saab's Managing Director Jan Ake Jonsson heralded the news as "the beginning of a new chapter in Saab's history."
"We are now recreating Saab Automobile as an independent unit," said Jonsson. "The road ahead will not be easy. Many have already suffered considerably as a result of the crisis in the automobile industry and sacrifices will be a part of our future, but after a period of tough decisions we will have laid the foundations for a new beginning."
According to the press statement, outside funding for Saab will be required during the reorganization time frame, either from public or private investors. General Motors has been trying desperately to sell the brand for the past several months, to no avail. More recently, an appeal to the Swedish government for financial assistance was flatly refused, leaving many experts asking where the money will come from.
"We explored and will continue to explore all available options for funding and/or selling Saab and it was determined a formal reorganization would be the best way to create a truly independent entity that is ready for investment," said Jonsson.
Saab has lived a troubled life since General Motors acquired 50 percent of the company in 1989. Saab's extremely loyal enthusiast community -- many of whom viewed Saab as a truly unique auto manufacturer and identified with that uniqueness -- struggled with some of the mainstream decisions sent down from GM. When GM fully absorbed Saab in 2000, many purists abandoned the company altogether, claiming the company had completely lost its identity. The cries were justified; over the last several years much of Saab's lineup were little more than rebadged vehicles such as the Saab 9-7x / Chevrolet TrailBlazer, or the 9-2x wagon which was a thinly-disguised Subaru Impreza station wagon.
Officials with the company remain optimistic about the brand's future, which will include three new vehicle launches in the next 18 months.
"With an all new 9-5, 9-3X and 9-4X all ready for launch over the next year and a half, Saab has an excellent foundation for strong growth, assuming we can get the funding to complete engineering, tooling and manage launch costs," said Jonsson. "Saab has a trademark which is well established both in Sweden and internationally. We have a documented efficient production and we have a strong range of models in development. That is why we have chosen this road. The future will be tough, but the commitment which exists to support the Swedish automobile industry and Saab will help us in the arduous tasks which lie ahead of us."
In the eyes of many analysts, the arduous tasks may prove too much for the company. It's expected Saab will need at least $1 billion dollars to survive, and even then its restructuring plan is currently based on yearly sales of approximately 125,000 units, with an expected return to profitability in 2011 or 2012. For 2008 Saab only sold 93,000 cars.
Scattered reports have suggested GM may still provide limited funding provided Saab can secure additional income. The Swedish government also hasn't completely ruled out some type of assistance.
"Reorganization will give us the time and means that help get these products to market while minimizing the liquidity impact of Saab on GM," said Jonsson
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