19 August 2009

GM: Saab gone, Opel, Saturn, Hummer next

Right now it seems Saab is out of General Motors’ hands and working with Swedish luxury carmaker, Koenigsegg.

Little known outside of the luxury car world, Koenigsegg is a tiny Swedish outfit with some 45 staff. It makes high-performance sports cars that can sell for up to $1 million.

“This contract is an important step in the journey to a potential deal,” said Carl-Peter Forster, head of GM Europe, in the statement. “The closure of the deal is contingent on the funding commitment from the European Investment Bank, guaranteed by the Swedish government.”

GM, which emerged from bankruptcy protection on 10 July, also plans to sell its Saturn and Hummer brands and its European operations, centered on Opel.

Saab Managing Director Jan Ake Jonsson called the deal a “milestone” in a video on the company’s web site but added there were still some issues to be resolved.

He said Saab’s reorganization, which will be complete this month, had helped to create a better supply and demand balance through reduced inventories and restore the carmaker’s balance sheet.

The Swedish government is still negotiating with Koenigsegg on a possible guarantee for a loan to Saab from the European Investment Bank, a pre-condition for the deal.

Sweden’s industry ministry said several steps remained before they could conclude the transaction.

A Koenigsegg spokeswoman Halldora said they expect to close on the deal within a month. GM said it saw the deal closing by the end of the year.

GM said it and Saab would continue to share technology and services during a defined time period, which they would manage through licenses and service agreements.

For related information, go to www.isa.org/productivity.