GM closing Saab operations

DETROIT — General Motors Co., after failing to get a deal to sell off its Saab operations, announced Friday it would begin winding down its premium Swedish division.

About 3,400 people work for Saab. There are 218 Saab dealerships in the United States.

The announcement comes after an attempt to sell Saturn failed in September.

Perhaps it should not be too surprising GM would
have difficulty selling off brands it had already determined it could
not make work.

“If they weren’t economically viable for General Motors, they’re not economically viable for anyone else,” Erich Merkle, an industry analyst with Autoconomy.com, said.

“You’re not getting rid of your good stuff,” he added. “It’s kind of like a garage sale.”

Sales of Saab vehicles had fallen 61 percent — or 7,812 — in 2009 through November compared to a year ago.

GM has been trying to sell the Saab brand for about
a year as part of its sweeping restructuring plans, which included
refocusing its U.S. brands from eight to four — Chevrolet, Cadillac,
Buick and GMC.

GM has already begun winding down Pontiac and Saturn. It has a buyer for Hummer but that deal has not yet been finalized as Chinese government approval is still required.

“In the case of Saab and Saturn, both had lost their way,” James Bell, executive market analyst for Kelley Blue Book,
said in an e-mail. “Curiously, they could both be considered mostly
appealing to fringe buyers. While that appeal can benefit a company
quite nicely in the best of times, as soon as tough days approach, such
a company better have darn exciting and innovative product in showrooms
… In the case of Saab, there was nothing left in the cabinet.”

GM had hoped to sell Saab to Koenigsegg Group AB, but that deal fell through last month.

Then, GM entered into discussions with Spyker Cars.

“During the due diligence, certain issues arose that
both parties believe could not be resolved,” GM said in a statement. GM
had set an end-of-the-year deadline to complete a deal.

Victor Muller, Spyker CEO, said in a statement that
the “complexity of the transaction, in combination with the strict
deadline, simply did not allow us to complete the transaction.”

GM said Saab will continue to honor warranties and provide service and spare parts to current Saab owners.

“We regret that we were not able to complete this transaction with Spyker Cars,” GM Europe President Nick Reilly said in a statement. “This is not a bankruptcy or forced liquidation process. Consequently, we expect Saab
to satisfy debts including supplier payments, and to wind down
production and the distribution channel in an orderly manner while
looking after our customers.”

John Smith, GM vice president of corporate planning and alliances, said parts of Saab could be sold off during the wind down process. Earlier this month, GM did a deal with Beijing Automotive Industry Holdings Co. Ltd. to sell certain vehicle technologies.

Via McClatchy-Tribune News Service.