Saab closure could be the result of poor GM management

From New York comes word that embattled General Motors has decided to shut down Swedish automaker Saab, the iconic 3,400-employee company it bought 20 years ago. GM has been trying for months to sell off the brand as part of its bankruptcy filing but was unable to reach deals with at least two suitors, according to Cable News Network (CNN). A long anticipated arrangement with Swedish exotic carmaker Koenigsegg fell through earlier this year and a last-minute deal with Dutch automaker Spyker couldn't be concluded in time to save the brand. "Despite the best efforts of all involved, it has become very clear that the due diligence required to complete this complex transaction could not be executed in a reasonable time," said Nick Reilly, president of GM Europe, CNN reported. "In order to maintain operations, Saab needed a quick resolution. We regret that we were not able to complete this transaction with Spyker Cars." The Koenigsegg deal's collapse followed a similar pattern, with last-minute complications also scuttling that arrangement. "In the end, Koenigsegg discovered some issues they didn't think could be overcome in a timely fashion," said John Smith, GM's vice president of corporate planning and alliances. "Like everybody, we would have preferred a different outcome." Well, that's what they say and, maybe in today's worldwide credit starved business environment, that's exactly what happened. But in light of the September failure of a deal to sell GM's Saturn subsidiary, and GM's decision to shut down its Pontiac brand, there may be another dynamic at work. If the Pontiac, Saturn and Saab brands were in good shape, any carmaker -- except, perhaps, for the other bankrupt U.S. company, Chrysler -- should have been happy to own them. At the price GM should have been willing to part with them -- the largest U.S. automaker is a highly motivated seller, remember -- there shouldn't have been any reason for all three deals to fall through in such a similar manner. GM's deal to sell its Hummer brand to Sichuan Tengzhong, a Chinese heavy equipment maker, is still awaiting government approvals, CNN said.

General Motors could close Saab next week

The latest word from General Motors Corp. in Detroit is that it could close its Saab Automobile subsidiary next week if it cannot find a new buyer after a reported deal to sell the legendary company collapsed. The troubled U.S. automaker said today that its board would meet next week to decide the fate of the 70-year-old Swedish automaker, which it bought in two parts in 1990 and 2000, according to the New York Times. GM could be forced to close the 4,000-employee company because Swedish exotic car maker Koenigsegg unexpectedly pulled out of the deal Tuesday. Koenigsegg issued a statement blaming the collapse on GM taking too long to close the deal. “The time factor has always been critical for our strategy to breathe new life into the company,” Koenigsegg said. “Unfortunately, delays in closing this acquisition have resulted in risks and uncertainties that prevent us from successfully implementing the new Saab business plan.” GM appeared surprised by Koeinsgegg's decision, Reuters said. “We negotiated in good faith and we met all our timing obligations under the agreement,” said a G.M. spokeswoman, Renee Rashid-Merem. GM chief executive Fritz Henderson said he was "very disappointed" by the failure of the Saab deal. But Henderson should not have been surprised. It is the third time in the past two months that a GM brand sale was scuttled at the last minute. Its proposed sale of its Saturn brand to Penske Automotive Group collapsed just before it was final in September, and GM pulled out of a deal to sell its Opel operations in Europe last month. GM is being forced to sell off some of its parts as it reorganizes under bankruptcy court protection.

Dismantling of General Motors picks up speed

News from Detroit that General Motors Corp. had agreed to sell its Saturn brand to Penske Automotive Group Inc. seems to be good news for 13,000 Saturn employees but not such good news for the largest U.S. automaker. The dismantling of bankrupt GM, which sought bankruptcy protection Monday, raises real doubts about whether the automotive giant will ever emerge as a viable company. GM has already agreed to sell its Hummer brand to a Chinese company and its Saab subsidiary to a fellow Swedish automaker, Koenigsegg Automotive AG of Angelholm. GM and Penske plan to complete the sale of the brand and its 350 dealerships by this summer, according to the Reuters international news service. GM has said it plans to reorganize in bankruptcy court and return as a smaller company concentrating on its core brands, Chevrolet, Buick, GMC and Cadillac, Reuters said. Penske, which operates hundreds of car and truck dealerships and supply stores across the United States and Britain from its headquarters in Bloomfield, Mich., was one of more than a dozen bidders for Saturn, which was created by GM in 1984 and began selling cars in 1990. GM announced it would sell the Saturn brand in February. Under the agreement with Penske, GM will continue to build the Saturn Aura, Vue and Outlook as a Penske contractor, Reuters said.