General Motors plans to begin winding down operations of its Saab unit, after it was unable to reach a deal to sell the brand to Dutch concern Spyker Cars, the company said in a brief statement Friday. The announcement followed last month's collapse of a bid by Swedish luxury carmaker Koenigsegg Group to buy the 72-year-old automaker."Despite the best efforts of all involved, it has become very clear that the due diligence required to complete this complex transaction could not be executed in a reasonable time," said GM Europe President Nick Reilly. "In order to maintain operations, Saab needed a quick resolution."
%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%%
GM said Saab will continue to honor customer warranties, while providing service and spare parts to current Saab owners worldwide. The Detroit-based auto giant, which emerged from bankruptcy in July, said it has faced difficult decisions in its effort to right itself and return to profitability. To that end, GM will focus on four core brands -- Buick, Cadillac, Chevrolet and GMC -- along with its European brands, Opel and Vauxhall. Doing so, GM said, will enable the company to devote more engineering and marketing resources to remaining brands and models.
In "Slightly Better" Shape
GM's decision ended a yearlong search to sell the brand, long known for its quirky character. As part of an effort become "a leaner organization," GM began seeking a buyer for Saab's operations in January. GM expects Friday's decision to have no impact on a deal reached last week for Beijing Automotive Industry Holdings to begin producing 9-3 and older 9-5 models for the Chinese market.
The decision to close Saab came on the same day that an Obama administration official said that GM and Chrysler Group, both of which received taxpayer-funded bailouts, are in better financial shape than the government expected. Ron Bloom, head of the president's autos task force told the Wall Street Journal that GM is doing "slightly better" than anticipated, while keeping in mind factors such as market share, sales, cash reserves and product plans.
In shuttering the brand, Saab joins a growing list of makes that GM has canceled in recent years, beginning with Oldsmobile in 2004. Earlier this year, GM decided to kill Pontiac, which had been part of the parent company's portfolio since 1926. In September, a plan to sell GM's Saturn brand to Penske Automotive Group (PAG) fell apart when company CEO Roger Penske was unable to find a manufacturer to supply Saturn with new cars after GM stopped building existing models within a few years. GM is currently in the process of winding down the Saturn brand.
Then last month, GM pulled out of deal to sell its Opel division, based in Germany, to Canadian parts maker Magna International (MGA), a pact that had the blessing of the German government. GM is developing a restructuring plan for Opel and brand-mate Vauxhall.
Investing in Real Estate
Learn the basics of investing in real estate.View Course »