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Business

General Motors to close Saab after Spyker talks break down

Text by News Wires

Latest update : 2009-12-18

General Motors announced Friday that it would be shutting the doors on its Swedish auto brand Saab, after talks with Dutch sports car maker Spyker broke down.

AFP - General Motors said Friday it would shut down its Swedish auto brand Saab after talks failed to produce a buyer for the money-losing unit.

GM said in a statement it failed to reach an agreement with Dutch sports car maker Spyker on a sale of the division, following the withdrawal of a bid last month from Sweden's Koenigsegg Group AB.

"GM had been in discussions with Spyker Cars about its interest in acquiring Saab," the Detroit firm's statement said.

"During the due diligence, certain issues arose that both parties believe could not be resolved."

"Despite the best efforts of all involved, it has become very clear that the due diligence required to complete this complex transaction could not be executed in a reasonable time," GM Europe president Nick Reilly said.

"In order to maintain operations, Saab needed a quick resolution. We regret that we were not able to complete this transaction with Spyker Cars. We will work closely with the Saab organization to wind down the business in an orderly and responsible manner. This is not a bankruptcy or forced liquidation process."

GM said the move to end Saab operations was among "some very difficult but necessary business decisions" as the new US auto giant tries to restore profitability after a massive bankruptcy restructuring aided by the US and Canadian governments.

The company has decided to end its Saturn and Pontiac brands in the United States and has reached a deal to sell its Hummer brand to a Chinese buyer.

Earlier this week, GM agreed to sell some Saab assets to China's Beijing Automotive Industry Holding Co.

State-owned BAIC will acquire the technology for Saab's 9-3 and 9-5 car models, turbine engines and gearboxes, allowing the Chinese firm to develop its own-brand cars using the Swedish carmaker's technology.

GM said that in the wind-down of Saab, it would satisfy debts including supplier payments and would continue to honor warranties and provide parts to Saab owners around the world.

Saab employs some 3,400 people in Sweden and sold just over 93,000 cars worldwide in 2008.

Under GM's stewardship spanning almost two decades, Saab rarely posted a profit and last year lost 3.0 billion kronor (241 million euros, 341 million dollars at the time).
 

Date created : 2009-12-18

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