Just days after General Motors revealed its long-term viability plans to the U.S. government, Saab has filed for reorganization in a Swedish court. Saab is looking to secure $1 billion in financing to secure its status as an independent automaker.
Although Saab will continue to receive some support from GM and the Swedish government during the proceedings, the reorganization is intended to eventually setup the Swedish automaker as a standalone company. “We explored and will continue to explore all available options for funding and/or selling Saab,†Saab Managing Director Jan-Ake Jonsson said in a release.
“It was determined a formal reorganization would be the best way to create a truly independent entity that is ready for investment.”
Per Swedish reorganization rules, a court appointed administrator will be overseeing Saab ’s business plans.
Future Saab products
Although GM plans to cut all ties with Saab by the end of this year, Saab products already in the corporate pipeline will continue as planned. That means over the next 18 months Saab will launch a new 9-5, the 9-3X and the 9-4X crossover. Those products should be allowed to progress through their scheduled lifecycles as GM will continue to supply parts and licensing agreements, the automaker says. However, any futures beyond those three will be up to Saab and/or its new owners.
More loans needed
With GM now essentially taking a minority ownership stake in Saab, the Swedish automaker must seek loans from outside sources. Saab has already applied for a $629 million loan with the European Investment Bank and is eyeing as much as $600 million from the Swedish government. Saab desperately needs the cash infusion to make its operation more attractive to potential buyers, but the Swedish government has already stated that it is not in a position to carry the burden of the ailing automakers.
Tough sell
Although Saab has the guarantee of three fresh models, it still might have trouble finding potential buyers. Saab lost about $340 million last year and expects similar losses this year. Saab’s 2008 sales were down more than 25 percent, totaling just 93,338 units. Moreover, in the 19 years GM has had some form of ownership over Saab, the Swedish marque has only turned a profit once, though industry analysts are quick to point out that an independent ownership of Saab would cut GM-related overhead costs that could allow the company to return to profitability.
