Time Running Out for Saab
December 08, 2009

Reports from Europe late on Monday indicate General Motors Co. and China's Beijing Automotive Industry Corp. (BAIC) may be edging closer to a deal that will transfer some of Saab's hard assets to BAIC -- but also appears to set the stage for GM to liquidate the Saab brand.

Reuters reported GM was talking with BAIC about a deal to sell existing tooling for the Saab 9-3 and 9-5, both of which were due to be replaced by new-generation models based on GM architectures. Saab had already unveiled the 9-5 at this year's Frankfurt motor show and its launch was ready.

GM already had said, however, it and BAIC were exploring the idea of buying the tooling for the two current-generation cars. The issue now becomes one of time. As days pass and the only news remains of BAIC's desire to purchase targeted Saab assets, the future for the brand's survival becomes more problematic: GM has said it will wait only until the end of the month for someone to put together a viable proposal that would keep Saab solvent. With the Christmas holiday fast approaching, the functional deadline for a deal would seem to be two weeks or less.

But GM has set deadlines before for suitors of its cast-off brands, only to extend them when it became obvious the timeframe to fashion a sale was too compressed -- or the negotiations become unexpectedly complicated, a situation that actually should not be so unexpected.
At least one other group, led by Dutch exotic-carmaker Spyker Cars NV, has expressed interest in buying Saab and maintaining the brand. Spyker is supported by a Russian bank, its majority shareholder.

But GM's board may already have come to the conclusion that for some time has seemed apparent: any GM nurturing of an entity hoping to keep Saab alive effectively amounts to GM supporting a new competitor. All three of the most imminent new Saabs -- the 9-5, 9-4X and 9-3 -- are based on GM underpinnings and are rebadged GM models. The ready-for-production 9-5, for example, is little more than an Opel Insignia or Buick LaCrosse wearing Saab sheet metal.

GM may be realizing there remains little reason to help someone else cultivate the Saab brand, when any future sales of Saab cars could be construed as sales taken from GM directly at the assembly line. -- Bill Visnic, Senior Contributing Editor

Photo by GM

Saab 9-5 ready for showrooms, but GM may be realizing helping the Saab brand stay alive is counterproductive.

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