US: GM board considering Saab's future today
Saab Automobile on Tuesday faced the threat of closure as the General Motors board met on Tuesday (1 December, 2009) to hammer out plans after a deal collapsed to sell the Swedish brand.
Time is running out for Saab after Swedish luxury car maker Koenigsegg pulled out of bid talks last week, putting in doubt the future of the loss-making GM unit and analysts have said the most likely outcome is a closure, Reuters noted.
"The reality is that to try to get someone in at this stage just looks not feasible," an auto analyst who requested anonymity told the news agency. "There is no further quality offer likely to pop up."
According to the report, Saab and the Swedish government have said other investors have approached GM regarding Saab, but in light of the US car maker's vow to drop the brand by early 2010, there is very little time in which to forge a new deal.
"It is clear that they (GM) have to find a solution as quickly as possible, without high costs and without creating a situation of new competition," said professor Christer Karlsson at Copenhagen Business School.
"For instance you can't sell it to anybody who wants to sell Saab on the Chinese market because then it will compete with GM's own products, since the new Buick [LaCrosse] is more or less the same car as the new Saab."
According to the news agency, Swedish government officials met with GM this week ahead of the board meeting, which was expected to last all of Tuesday [EST], to underline that it was ready to provide loan guarantees to a new owner though it has ruled out taking a stake in Saab.
State secretary Joran Hagglund told Swedish news agency TT after the meeting with GM in Detroit that he remained hopeful that a closure of the 60-year-old brand might be avoided.
Beijing Automotive Industry Holding Corp (BAIC), which tied up with Koeningsegg in October, could still be among the possible contenders to take over Saab, which has not made a profit since 2001, Reuters added.
The report noted that Merbanco Merchant Banking, based in Wyoming, has also said it remains interested in Saab while US financier Ira Rennert and his Renco Group had also expressed interest in pursuing a deal for Saab before GM struck a preliminary deal with Koenigsegg earlier this year.
Meanwhile, Bloomberg News, citing two people familiar with the talks, said GM may sell parts of Saab to BAIC and shutter the brand.
A sale of assets, including production machinery, was among GM's options, the sources said.
Beijing Auto plans to "move fast" on Saab to help improve its technology, the automaker's president Wang Dazong said yesterday, according to Bloomberg.
"It's very difficult to see a future for Saab," Stefan Bratzel, director of the Centre of Automotive at the University of Applied Sciences in Bergisch Gladbach, Germany.
Beijing Auto "is one of the potential candidates because Chinese manufacturers are looking for a foothold in Europe and need the distribution network, the technology and the brand", he was quoted as saying.
The Wall Street Journal has suggested that Saab might sell BAIC the tooling for the outgoing 9-5 model, which dates back to the 1980s 9000 model on a platform developed jointly with the Fiat Group.
Saab recently showed off a fully redesigned 9-5 for the 2010 model year - the first full makeover for the model in years - but it now seems unlikely this new car will ever go into production.