The twisting saga of Saab Automobiles took another dramatic turn after a report surfaced that General Motors won't consider an 11th-hour bid for the Swedish automaker. Unswayed by the latest offer from Dutch sportscar maker Spyker Cars, Detroit-based GM is preparing to mothball Saab for good, The Economic Times reported, citing a news report published Wednesday in Sweden.%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%% "Saab's board had a short meeting [Tuesday]. GM representatives were on the phone from the U.S. And the discussions were entirely about the shutting down Saab -- not about the new bid," reported the Svenska Dagbladet, a Swedish-language daily. GM announced last week that it would begin winding down Saab operations after it was unable to reach a deal with Spyker for the brand. Spyker countered on Sunday with an offer that would have allowed the deal to close by Dec. 31, the deadline GM set for the unit's sale.
But news Wednesday that GM was likely to shutter Saab renders any last-minute offers moot. "The word [at the meeting] was to shut down Saab, and that is what we have started working on," Haakan Danielsson of Sweden's engineering union told the Dagbladet, reported The Economic Times. Danielsson attended the meeting and told the Dagbladet that a shut down of Saab could take many years.
Viewed with Skepticism
In announcing its refined bid, Spyker said the offer was only good until 5 p.m. Detroit time on Monday, but extended it indefinitely as the deadline loomed. In a statement, GM declined comment on the offer and said it had received several letters of inquiry about Saab and was evaluating each one.
Spyker's latest offer, its second for Saab, was viewed with skepticism by Sweden, The Economic Times reported, and the government was preparing to wind down the 72-year-old auto maker, known for its quirky cars. GM's decision to kill the brand may have as much to do with eliminating a possible future competitor as anything else, auto-industry analyst Matts Carlsson told Swedish radio, The Economic Times reported.
But according to The Economic Times, Danielsson told the Dagbladet: "GM wants to sell Saab. ... It is of course better to have money come in than pay the costs associated with shutting down. But it is dragging on and it is going to take more time before everything is ready [for the deal to be completed]."
Other Shutdowns and Sales in Detroit
GM also has a deal in the works to sell its Hummer brand to Sichuan Tengzhong Heavy Industrial Machinery of China. That deal awaits government approval. The carmaker is also in the process of winding down its Saturn brand after a pact to sell it to Penske Automotive Group (PAG) fell through in September, while the famed Pontiac unit produced its last vehicle, a G6 midsize sedan, in November. And GM is partway through a restructuring of its German Opel unit and Opel's U.K. sister brand, Vauxhall, which is expected to be completed next month.
News of the probable Saab shutdown came on the day Ford Motor (F) announced it had reached a deal to sell its Swedish unit, Volvo Cars, to China's Zhejiang Geely Holding Group, a deal that is expected to be completed by the second quarter of 2010. Zhejiang Geely plans to finance the $2 billion deal with a combination of cash, bank loans and funds from a small group of investors, Dow Jones Newswires reported, citing people familiar with the discussions. The parties are expected to formalize the deal in the next quarter.
In offloading Volvo, Ford has sold the last of the makes once contained in its foreign luxury-car portfolio, which also featured Jaguar, sold in 2007, along with Aston Martin and Land Rover, both bought by India's Tata Motor Group last year for $2.3 billion.
Investing in Startups
The lucrative and risky world of startups.View Course »