Swedish Automobile N.V. – Swan – said this morning that Saab Automobile AB, Saab Automobile Tools AB and Saab Powertrain AB filed for bankruptcy with the District Court in Vänersborg, Sweden. It was the long expected swan song for the 74 year old automaker.
The end of Saab was practically assured last Saturday when General Motors, a preferred shareholder with outstanding receivables, reiterated a long-standing position against Saab transferring GM intellectual property to the Chinese and having Chinese companies build a the GM developed 9-5 sedan. GM also had little interest in continuing to supply a Mexican built rebadged Cadillac SRX as a Saab in China. GM is the largest automaker in China, albeit with communist government dictated partners.
Worse, for GM shareholders (and Ford and Chrysler), China imposed additional punitive tariffs of almost 22% on top of existing 25% taxes on the import of the vehicles into China last week in an apparent violation of WTO rules. The U.S. – or Uncle SAP – only imposes a 2.5% tariff on vehicle imports.
“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,” GM said in a statement to AutoInformed.
Saab suspended worker payments last July after not having built cars for months, as the company only sold fewer than 13,000 automobiles and posted a loss of -€201.5 million (~$283 million) during the first half or 2011. The grim reality is that Saab Automobile after decades of losses, changes of ownership and financial engineering had reached the end of the road.
A further series of financial maneuvering occurred in October when Swedish Automobile N.V. (Swan) announced that it entered into a memorandum of understanding – MOU – with two Chinese companies – Pang Da and Youngman – for the sale of 100% of the shares of Saab Automobile AB (Saab Automobile) and Saab Great Britain Ltd. (Saab GB) for €100 million.
This deal occurred just a week after the Administrator for a Swedish bankruptcy court made a recommendation to stop a proposed reorganization, which in effect meant that Saab was about to be liquidated by the court. More delays ensued, but this morning the end came. The Swedish Court will now approve of the filing and appoint receivers for Saab Automobile. The value of existing mainstream Saabs will now diminish, and owners of new ones will find their warranties are void.
In 1990, Saab Automobile AB was created as a separate company, jointly owned by the Saab Scania Group and General Motors, and became a wholly-owned GM subsidiary in 2000. GM was unable to make a profit with the company. In February 2010, Spyker Cars N.V. of the Netherlands acquired the company from GM, after GM emerged from its own bankruptcy, as an independently-run business. Spyker morphed into Swan.