Blog: Dave LeggettSaab latest

Dave Leggett | 12 January 2010

This must be an intensely frustrating time for Saab workers. After the Trollhattan factory reopened yesterday, they still don't know their fate and can only scratch their heads at the reports in the media.

Could the new 9-5 line be shipped to China for the car to be rebranded as a Buick? Stranger things have happened, but the denials from GM have been pretty unequivocal. It is a major asset though, and one that GM might not want to completely give up on. We'll see, but the view from Bob Lutz appears to be that GM would rather scrap the model than rebadge or sell it on.

Sad to think that a model that has been through the (expensive) development process and is 'ready to go' might not actually make it to market.

GM is also keeping the pressure on bidders by sounding tough on wind-down. Is it a tactic? Could be, but the clock is surely ticking for some sort of deal – including Swedish government guarantees and an EIB loan - to come out of the wash.

The difficulty in getting the finance lined up on a reasonable timescale was the reason that Koenigsegg backed out. That still seems to be the case, with GM facing wind-down costs that are at least known today versus uncertainties on potentially large future liabilities if 'New Saab' goes bust. That must be at the core of the difficulties in doing a deal I would think. GM also knows that turning a profit at Saab won't be easy - if it was it might hang on to it.

So there's a paradox here. GM doesn't want the hassle of trying to make Saab work, but it needs to know that a new owner has a decent shot at it because it doesn't want to be left holding the baby if it fails.

It's a sorry tale.

US/CHINA: Saab rumours swirl as GM maintains wind-down


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