GM Sells Sweden's Saab to Spyker CarsBy Michelle Krebs January 26, 2010
General Motors and Spyker Cars confirmed Tuesday that GM has agreed to sell Swedish automaker Saab to the Dutch sports car maker.
"Today's announcement is great news for Saab employees, dealers and suppliers, great news for millions of Saab customers and fans worldwide, and great news for GM," said John Smith, GM vice president for corporate planning and alliances, who will hold a press conference later in the day.
Spyker told Bloomberg News it has agreed to pay $74 million in cash and $326 million in preferred shares in the new company that would emerge from the deal, to be called Saab Spyker Automobiles, which will carry the Saab brand forward. The sale is subject to Sweden agreeing to guarantee a 400 million-euro ($563 million) European Investment Bank loan for Saab.
The sale is expected to close in February and Saab will exit an orderly wind-down process in line with the timetable, the Dutch company said.
GM said in a statement that the Swedish government is at present reviewing the transaction and the related request for guarantees of a Saab Automobile loan that has been requested from the European Investment Bank. Assuming quick action, the transaction is expected to close in mid-February, and previously announced wind down activities at Saab will be immediately suspended, pending the close of the transaction.
"General Motors, Spyker Cars, and the Swedish government worked very hard and creatively for a deal that would secure a sustainable future for this unique and iconic brand, and we're all happy for the positive outcome," GM's Smith said.
Added GM Europe President Nick Reilly: "Throughout the negotiations, GM has always had the hope to find a solution for Saab that would avoid a wind down of the brand. We've worked with many parties over the past year, including governments and investors, and I'm very pleased that we could come to such a good conclusion, one that preserves jobs in Sweden and elsewhere. GM will continue to support Saab and Spyker on their way forward.:
The closely-watched sale of Saab allows GM to keep its focus on its four remaining core brands -- Chevrolet, Cadillac, Buick and GMC. Pontiac and Saturn are being wound down. Sale of Hummer to a Chinese company is pending.
However, notes Edmunds.com Senior Analyst Jessica Caldwell, "Saab represents competition for GM's Opel brand (which it in December decided to keep), and Saab's new owner will likely work hard to make the investment pay off, which may make Saab that much more competitive in the long run."
Saab owners, undoubtedly, are thrilled to see the quirky but much-loved brand saved. Saab cars earn Edmunds.com editors' ratings of around seven out of ten, while Edmunds.com consumers rate Saab cars close to nine out of ten, on average.
Spyker CEO Victor Muller has said his company's efforts to carry forward with Saab would center on the 9-3 entry-level model range, the 9-5 flagship and the 9-4X midsize crossover.
The all-new 9-5 is based on GM's global midsize-car architecture and is ready to be produced. The 9-4X, also based on a GM platform, is believed to be finished or nearly finished with development, giving the potential new owner of Saab two fresh new models to take to market.
Interestingly, a compact 9-1, a model long proposed by Saab, is not a part of Spyker's plans, the report said. It is possible Spyker executives realize not only that the brand first must be stabilized but also that the profit potential from an entry-level model such as the 9-1 would be scant. Moreover, there likely has been little prior investment made in the 9-1's development.
Muller has told media that Spyker would not pursue a plan to greatly reduce the number of U.S. Saab dealers -- and that the company would use the existing Saab dealer network to also retail the company's supercars.
Spyker reportedly had sold around 25 of its outrageously styled ultra-performance C8 Aileron through the first half of 2009. Spyker currently distributes the car through Bentley and Lamborghini dealers.
In any event, the new owners of Saab have their work cut out for them. It will no easy task keeping the tiny company going and growing in the intensely competitive world market.