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Desperate Saab calling it a day

2011-12-20 08:29

TROLLHATTAN, Sweden - Automaker Saab ran out of room for manoeuvre on Monday when its Dutch owner filed for bankruptcy, calling time on a nine-month battle to rescue the struggling Swedish brand.

Saab's cash problems began in March 2011, after 2010 sales fell short of target. It has not made a vehicle since June, 2011.

The end of the road for Saab, which has been making cars for more than 60 years, came at the weekend when General Motors again vetoed a plan involving Chinese investor Zhejiang Youngman Lotus Automobile.

GM, Saab's former owner, still licences key technology to it and has a small shareholding.

GM INTERVENTION

Saab owner Swedish Automobile said that after GM had informed Youngman it would not approve the plan, the Chinese company told Saab "the funding to continue and complete the reorganisation... cannot be concluded".

"The board of Saab Automobile subsequently decided that the company, without further funding, would be insolvent and that filing for bankruptcy was in the best interests of its creditors."

Swedish Automobile said it expected the court would approve the filing and appoint receivers.

Meanwhile, t the company's plant in the western town of Trollhattan, emotions were high among some of the workers, even though they have been preparing themselves for the worst. The company employs about 3500 people, though officials have said many more would be affected by a closure, including suppliers.

"I feel emptiness and frustration," Fredrik Amlqvist, a car builder for almost 17 years, saaid. "I looked out at my two Saabs in the yard this morning. I had tears in my eyes."

Long-time Saab employee Stefan Karlsson said he feared for the future of the whole region. "We have had a long time to prepare ourselves for this, but when it happens it still hits you," he said.

LOYAL FOLLOWING

Saab presented its first prototype in 1947 after moving out of aeronautical engineering and built a small, but loyal, following. A separate Saab defence and security company still exists.

General Motors bought 50% of the car company in 1990 and the rest in 2000. It decided to sell the brand in 2009 after the financial crisis and came close to closing it before Swedish Automobile, then called Spyker Cars, bought Saab in January, 2010.

Cash-flow problems surfaced in March and production was halted. Saab briefly restarted output but mounting debts to suppliers stopped the lines again and since then the plant has been idle.

Swedish Automobile chief executive Victor Muller stitched together a series of rescue deals but General Motors said it could not accept an option involving Youngman.

GM, which operates in China in a partnership with state-run SAIC, said in November continuing to supply parts and technology to Saab's new owners would run counter to the interest of its own shareholders.

Despite its well-known name, Saab was a niche player and analysts had questioned its future even if Muller had kept the company afloat. It has the capacity to produce more than 100 000 cars a year.

Reuters

Comments
  • Miguel - 2011-12-20 08:43

    A sad day indeed. The demise of a company that dared to be different! Why did the Swedish government not step in?

  • Fredster - 2011-12-20 11:02

    sad

  • christo.stone - 2011-12-20 12:33

    So sad...Was really hoping to see them rise from the ashes.

      Martin - 2011-12-21 07:48

      They will rise again, the original Saab's were Very reliable (pre GM) and they have always been great cars, They were Turbo Pioneers and they had very unique looking exteriors and especially Interiors, in the next few years if not sooner someone will buy the brand and relaunch it, Guaranteed!

  • Lynn - 2011-12-20 12:44

    Maybe the South Africa DTi should look at buying the assets, expertise and name and set up the 1st truely African car manufacturer. The name even fits ~ South African Automaotive Builders. The SAAB's are/where truely great cars and a 9.5 would be a 1st class ministerial motor

  • Cyrus - 2011-12-21 07:17

    ......car builder for almost 17 years, saaid. "I looked out...... Seriously W24. Please get the spelling right. Its not saaid, its said. Mediocrity should not be tolerated at a professional level.

  • Caleb - 2011-12-21 14:29

    Whenever a big Automotive Giant starts making inroads into smaller companies, the demise is imminent, whith the exception of the VW Group, who understands the brands they buy. The ability for independent companies to remain afloat is still possible, eg. Koenigsegg, Porsche and others. A sad day indeed for one of the automotive greats who pioneered turbocharging, the safety cell, enhanced aerodynamics.

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