Courtesy of The Macomb Daily:
Saab Automobile has filed for final bankruptcy under Swedish law, which is the first step toward liquidation.
The announcement Monday will also signal the end of the storied brand and close the company’s North American headquarters in Royal Oak.
“After having received the recent position of GM on the contemplated transaction with Saab Automobile, Youngman informed Saab Automobile that the funding to continue and complete the reorganization of Saab Automobile could not be concluded,” Saab said in statement released Monday.
“The Board of Saawb Automobile subsequently decided that the company, without further funding, will be insolvent and that filing bankruptcy is in the best interests of its creditors. It is expected that the court will approve of the filing and appoint receivers for Saab Automobile very shortly.”
General Motors Co. reiterated its opposition to the sale of Saab to a group of Chinese investors.
GM spokesman James Cain said the carmaker remains opposed to the deal as structured and insisted no deal can move forward without GM’s approval.
“Saab’s various new alternative proposals are not meaningfully different from what was originally proposed to General Motors and rejected. Each proposal results either directly or indirectly in the transfer of control and/or ownership of the company in a manner that would be detrimental to GM and its shareholders. As such, GM cannot support any of these proposed alternatives.”
“Various new investment/sale/loan proposals that have been floated by Saab in recent days, including statements that inaccurately suggest that the consent of GM is not required for them to move forward,” said Cain, adding GM’s approval is required.
Saab continues to cling to life, but it is facing some long odds in its continuing battle for survival.
The company received some good news Tuesday when its new Chinese partners transferred cash to Saab’s corporate accounts. The amount wasn’t disclosed, but the transfer allowed the Swedish automaker to pay some bills, a Saab spokeswoman said.
“Everybody involved in these discussions realizes that the current situation puts a severe strain on all employees and suppliers, but everything within their power is being done to achieve a positive outcome in the next few days. Good progress is being made, and parties are fairly optimistic that an agreement can be reached that will be beneficial for all stakeholders.”
Saab, which employs more than 3,000, has struggled since last spring, ever since it was forced to shut down its production plant in Trollhattan, Sweden, following a dispute over payment with a supplier.
The dispute cut off production of Saab 9-5, which the company was counting on to generate cash.
Up until now, Victor Muller, the Dutch businessman who purchased Saab from GM in early 2010, has kept the Swedish automobile company alive through persistence and sheer will power.
However, the Swedish judge supervising Saab’s bankruptcy proceedings could suspend the court action, forcing Saab into liquidation and spelling the end of efforts to rescue the company.
Saab’s chances of survival also suffered a serious blow earlier this month when GM said it would not sanction any deal with Chinese investors. GM fears intellectual property in Saab’s hands, which originated with GM, could be transferred illicitly to other Chinese companies.
GM, which was saved from bankruptcy by a massive U.S. government loan, also cut off production of one of the vehicles Saab was counting on for its comeback, the Saab 94-X crossover vehicles, which was scheduled to be built in GM assembly plant in Ramos Arizpe, Mexico. GM’s production of the 94-X was suspended in September.
Saab Automobile’s sales peaked at 133,000 cars in 2006. After that, sales dwindled to 93,000 cars in 2008 and just 27,000 in 2009.