Koenigsegg Pullout Forces GM to Rewrite Its Ultimate Saab Story
Koenigsegg Group AB has done an abrupt about face regarding its highly publicized deal to buy the financially troubled Saab automotive division from General Motors. In a scenario that eerily recalls the last-minute collapse of a deal to sell its Saturn brand to Roger Penske, GM is now faced with the decision of either finding a new buyer for Saab or rapidly winding it down in much the same way Saturn was summarily "disenfranchised." Koenigsegg Group AB is a consortium formed by Swedish boutique supercar maker Koenigsegg Automotive AB and included Beijing Automotive Industry Holdings as a minority partner. Christian von Koenigsegg told the press that time had become the determining issue that caused the potential sale to collapse. "Unfortunately delays in closing that acquisition have resulted in risks and uncertainties that prevent us from successfully implementing the new Saab business plan."
In a tersely worded statement, GM President and CEO, Fritz Henderson, responded to the situation, noting: "We're obviously very disappointed with the decision to pull out of the Saab purchase. Many have worked tirelessly over the past several months to create a sustainable plan for the future of Saab by selling the brand and its manufacturing interests to Koenigsegg Group AB. 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." While GM has recently decided to keep rather than sell its much larger Opel organization, that option does not seem to be on the table for Saab. However, GM is reportedly still making efforts to find another buyer.
While the Swedish government has already announced that it would not take a shareholder role in Saab, it did not rule out doing what it could to help secure a viable future for the automaker with a different private owner. Last year it went on record as offering to provide up to 20 billion Krona ($288 million) in credit guarantees and 5 billion ($72 million) in additional emergency loans to help keep Saab and its 4,000-plus employees and various ancillary operations alive and in country. Whether that amount, plus whatever GM contributes to the cause, will be enough to save Saab -- which is expected to sell fewer than 50,000 cars this year and lose more than $860 million -- remains to be seen. Whatever the outcome, it's likely not going to be the kind of holiday surprise any of its struggling dealers had hoped for or anticipated just 24 hours earlier. It also raises questions as to the fate of Saab's new and highly-touted 9-5 sedan that was shown at Frankfurt in September and due to go on sale during the course of the next year.