|
GM to sell Saab to Dutch carmaker Spyker for $74MBy TOBY STERLING and TOM KRISHER
DETROITSaab got a new life Tuesday as General Motors Co. agreed to sell the Swedish car brand to the small Dutch luxury carmaker Spyker Cars NV. Under the deal, GM will get $74 million in cash plus $326 million worth of preferred shares in Saab. GM will get "other considerations," which it did not specify. The Swedish government is also ready to guarantee a loan of up to 4 billion kronor ($550 million) from the European Investment Bank, Industry Minister Maud Olofsson said. The deal is a coup for Spyker and a lifeline for Saab, which has lost money for years under GM's ownership and was slated for liquidation. Saab has around 3,500 employees in Sweden. But it's also a huge challenge for Spyker, which sold only 23 cars in the first half of 2009, its most recent reporting period, and posted a net loss of 8.7 million euros. The 11-year-old company has yet to make a profit, but it says funding for its operations have been guaranteed through 2010. Spyker CEO Victor Muller said in a statement that the company is happy to have saved the brand and secured the jobs of thousands of workers. "Saab is an iconic brand that we are honored to shepherd," he said in the statement, adding that support from many of the 1.5 million Saab drivers worldwide helped get the deal done. Saab spokeswoman Gunilla Gustavs said "We are very happy" about the sale. Under the deal, GM will continue to provide engines and transmissions for the new company for "an extended period of time," and it will keep making the 9-4X crossover vehicle for Saab, said John Smith, GM's vice president of planning and alliances. Crossovers have the interior room of an SUV but are built on a car instead of a truck frame. GM hopes to close the deal by mid-February, Smith said. Spyker will continue to provide vehicles for and support Saab's U.S. dealers, Smith said. The Dutch automaker also will guarantee up to $10 million in Saab's obligations to GMAC, which is GM's financing arm. Sweden's Olofsson said the government made the decision to back the loan on Tuesday after analyzing a review of Spyker's business plan and financial situation by the Swedish National Debt Office and consulting firm KPMG. She said the money must be used for projects to develop environmentally friendly cars in Sweden. If the European Investment Bank loan is approved it will be paid out in installments, not as a lump sum, she said. But she said the biggest challenge remains for Saab: to develop cars that customers want and "deliver a solid profit." GM has been trying to shed Saab for more than a year as part of a massive restructuring process after it emerged from bankruptcy protection. The company also plans to sell Hummer and will phase out Saturn and Pontiac so it can focus on four brands: Chevrolet, Buick, GMC and Cadillac. Saab Automobile sold around 90,000 cars in 2008, a 30 percent decline from 2007. With another sharp sales decline expected, it filed for protection from creditors while it reorganized in February 2009. Saab's U.S. sales last year amounted to only 8,680, down 59 percent from 2008 as consumers stayed away from the brand due to uncertainty over its future. GM filed for bankruptcy itself in June, and previous attempts to sell Saab by a Dec. 31 deadline failed. To win the bidding process, Spyker had to overcome reservations within GM that it didn't have the expertise to run a car company. Several GM executives were afraid of getting tangled up with the Dutch automaker because GM will at least for a short time have to continue providing vehicles for Saab. Spyker bested Luxembourg private equity group Genii Capital to win the bidding for Saab. Genii withdrew from the bidding Monday, saying "the timing of the bidding process for Saab is incompatible with implementing a solid business platform for the future." ------ Toby Sterling reported from Amsterdam. Associated Press Writers Malin Rising and Karl Ritter in Stockholm contributed to this report. Spyker submits a new Saab offer to General Motors Dutch luxury car maker Spyker has submitted a new offer to General Motors (GM) for its Swedish car brand Saab. GM said this week that it would close Saab after talks with Spyker had collapsed. Spyker has submitted a new 11-point proposal to GM, addressing the issues that ended talks. Spyker chief Victor R. Muller said he was "very confident" that the new offer would make GM resume negotiations and lead to a sale. "We have made every effort to resolve the issues that were preventing the conclusion of this matter and we have asked GM and all other involved parties to seriously consider this offer," Mr Muller said. "We are very confident that our renewed offer will remove the impasse that was standing in the way of an agreement on Friday, and this would still allow us to conclude the deal prior to the expiry of the deadline originally set by GM." The original deadline was 31 December. Saab employs 3,400 people in Sweden and GM has estimated 8,000 people will suffer indirectly from its planned closure. Last year, Saab lost 3bn kronor (£255m; $412m). It has not made a profit since 2001 and made up 1.1% of GM's global sales. GM pledged to become a leaner company when it emerged from bankruptcy protection in July this year. It had been hit by a sharp slump in sales - partly because of the financial crisis, but also because of stiff competition from Japanese rivals. The company is now 62% owned by the US government. GM said its focus would remain on its four core brands - Buick, Cadillac, Chevrolet and GMC - as well as its European business Opel. GM to 'wind down' Saab business |  GM has been trying to sell Saab since January. |
GM says it has failed to sell its Swedish car brand Saab and will begin "an orderly wind-down of Saab operations". GM had been in talks with the Dutch speciality car maker Spyker over a sale. Talks with Sweden's Koenigsegg also fell through earlier this year. "We regret that we are not able to complete this transaction with Spyker Cars," said GM Europe boss Nick Reilly. GM has been trying to sell Saab as part of its turnaround plans since January. |
Mr Reilly added that all debts would be paid and that the winding-down would be "an orderly process". On a conference call, GM vice-president John Smith said it became clear that there were serious problems with the Spyker talks that could not be resolved. He said: "We reached a point of impasse, we decided to deal with it and move on." A statement from the firm said that Saab would continue to honour all warranties, while providing service and spare parts to current Saab owners around the world. Last week, Saab agreed a deal with Beijing Automotive to sell it some of Saab's technology. That deal will not be affected by the latest announcement. Saab employs 3,400 people in Sweden and GM estimates 8,000 people will suffer indirectly. 'Sad news' Sweden's government said it was sad news but that it would not step in to save Saab. It is very dismal. Very sad news for all of the employees and it comes at the worst possible time", the Enterprise Minister Maud Olofsson told the Swedish news agency TT. She has called a meeting to discuss the situation with unions on Monday. "I don't think GM really knows how the wind-down is going to take place, but GM has to take its responsibility," she said. "The most important thing right now is to take care of the employees and the future, how to make the most of their know-how," she added. Last year, Saab lost 3bn kronor (£255m; $412m). It has not made a profit since 2001 and made up 1.1% of GM's global sales. "This has been 20 years in the making. At one point, Saab had cachet, but it just didn't update its models fast enough," said Michael Tyndall, auto specialist at Nomura. "This just shows that the industry moves on and if you don't invest, you don't do well." Saab was just about to replace its 9-5 model after more than a decade on the market. Most car companies bring out a new model every five or six years. New focus GM said its focus would remain on its four core brands - Buick, Cadillac, Chevrolet and GMC - as well as its European business Opel. GM pledged to become a leaner company when it emerged from bankruptcy protection in July this year. It had been hit by a sharp slump in sales - partly because of the financial crisis, but also because of stiff competition from Japanese rivals. The company is now 62%-owned by the US government.
|
