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G.M. Sells Saab to Swedish Automaker
G.M. Sells Saab to Swedish Automaker | Ethiopian News
G.M. Sells Saab to Swedish Automaker
Posted by Desta Bishu | July 11th, 2009 at 4:15 am |
General Motors announced Tuesday that it had agreed to sell its Swedish unit, Saab Automobile, to a consortium led by the sports car maker, Koenigsegg Automotive.
The companies said a deal was contingent on $600 million of financing from the European Investment Bank that is to be guaranteed by the Swedish government. They did not release further financial details of the deal, which is expected to close in the third quarter.
Saab sold 93,000 cars last year, and it has not turned a profit in years. With a narrow, though loyal, customer base focused on Sweden, Britain and the American Northeast, it proved too small to lure the world’s big automakers, many of which are seeking tie-ups to increase economies of scale.
Koenigsegg, an unlisted company with 45 employees based in Angelholm, Sweden, turns out just a few “supercars” — high-performance sports cars costing more than $1 million each — a year. It was founded by Christian von Koenigsegg; a Norwegian entrepreneur, Bard Eker, holds a 49 percent stake.
“I’m struggling to see the point of this deal,” said Philippe Houchois, head of European auto industry research at UBS in London. “Is it to ensure the survival of Saab, to save jobs? It looks like a short-term solution that doesn’t resolve the core issues.”
Saab, he added, is too small to make money in the long term.
With its American parent in restructuring and the Swedish government taking a hard line, Saab filed for reorganization on Feb. 20. General Motors itself sought protection from creditors on June 1.
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