Saab Sale Falls Through for General Motors

Koenigsegg Group AB will not be buying Saab from General Motors as was planned. In a statement concerning the collapsed deal, GM CEO Fritz Henderson said, "We’re obviously very disappointed with the decision to pull out of the Saab purchase. 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."

GM is already planning meetings to decide on their next move. Chris Preuss, spokesperson for GM, said that the board will meet next week to discuss the future of Saab.

Koenigsegg’s managing director, Christian von Koenigsegg, said that the deal was too complex to finalize in time to turn Saab around even though financing was available to complete the sale.

In an interview with CNN International Koenigsegg said, “"We have a great belief in Saab…their product range and what the deal promised. The problem is we can still not see a date when the deal can be finalized." He said he does not blame any single party for the deal’s demise. "Everybody wanted to make this deal, but the time aspect was just too difficult," he said.

One report says that GM would have received less than $500 million from the sale, although prices have not officially been disclosed by GM or Koenigsegg. senior analyst Michelle Krebs says GM stands to lose more than just the purchase price; it could mean additional cash to close dealerships and factories in Sweden if no other buyer is found.

Krebs says, "This might not get much notice here, but they’ll notice in Sweden. The big question is what will the Swedish government do now – whether they’ll allow the plants there to shutdown."

Just a few months ago, GM also suffered the loss of the Penske deal to buy the Saturn brand and had to shut down that brand. GM also decided recently to keep Opel, its major European brand, instead of selling it to Canadian auto parts company Magna International.

With the decision to keep Opel, there is some question as to whether or not GM will attempt to keep Saab in the event no buyer is found. Opel has excess production capacity in Europe, and Krebs says that trying to incorporate Saab into the company’s European operations will create an even more expensive and complicated reorganization.

There is some hope that a buyer might be found in growing markets such as China or India, where investors have been purchasing ailing western brands. Saab’s market presence in the United States has fallen precipitously in recent years and today almost 80% of Saabs are sold overseas.

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