The future of Swedish automaker Saab is in doubt this morning, as General Motors’ plan to sell the company back into Swedish ownership has fallen apart.
The New York Times reports, “In a statement, GM said that the deal had been terminated by the buyer, the Koenigsegg Group, the luxury Swedish carmaker.” GM CEO Fritz Henderson said “Given the sudden change in direction, we will take the next several days to assess the situation and will advise on the next steps next week.”
The sudden failure of the sales agreement called to mind a similar development in September, when a buyer pulled out of an agreement to purchase the Saturn brand. In that case, GM decided to shut down the Saturn brand by the end of 2010, making its decision shortly after talks failed.
Saab may face a similar fate.
Reuters reports that GM’s board “will meet next Tuesday to consider the fate of Saab after a deal to sell the Swedish brand to luxury car firm Koenigsegg collapsed, a person familiar with direct knowledge of the matter said on Tuesday.” The company has reportedly “not been in active discussions with any other bidders for Saab and the decision by Koenigsegg to end the deal means that a wind-down of the Swedish brand is now likely, the person said.”
There is some precedent for making a different decision. The Wall Street Journal notes, “GM was also looking to sell control in its German Opel division, but the board decided to keep Opel at the last minute” when it could not come to a satisfactory agreement with a buyer.
Saab, however, has never shared the success that Opel has seen. GM bought the Swedish automaker in 1989, and some sources have reported that the company never once made a profit with Saab despite 20 years of trying -- making it seem unlikely the GM would want to try to save the brand.
Remaining Saab dealerships in the U.S. are struggling. Saab’s production lines have been shut down for months, and some Saab dealers have reportedly run low on cars to sell.
The failure of talks could be an ominous sign for one other GM brand as well. As it emerged from bankruptcy protection this summer, GM planned to eliminate four brands. Initially, the company announced plans to shut down its Pontiac unit, and sell Saturn, Saab and Hummer to the highest bidder. Sales plans for Saturn and Saab have now collapsed. The New York Times notes, “GM’s Hummer brand is being sold to a Chinese heavy equipment maker and a private investor.” If that sale goes through, it will be GM’s only successful attempt to sell a foundering brand.
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