For Saab, The End Looks Near

After a long, bumpy road to get where it is now, Autocar reports the end for Saab could happen as soon as today. The quirky Swedish automaker has been through a lot in its history, and its management has shown a remarkable determination to survive.

This summer brought on again/off again deals with Chinese companies, as well as the inability to pay workers at the company’s Trollhattan plant. With no workers, production has been shut down for six months. That means no new 9-5s or 9-3s. All the cars have been sold from current supplies. The 9-4X, produced at a General Motors plant in Ramos Arizpe, Mexico, has remained in production however.

Recently, the company applied for government protection. After first being rejected it was approved on the condition of Chinese investment from Pang Da and Youngman Automotive. Saab reported last week that bridge funding for the interim reconstruction period was delayed, a bad sign.

Word now is that the Chinese government, which has to approve all of these deals, is rejecting the investment due to the lack of an intellectual property transfer. Saab’s intellectual property and development prowess is prized, with many innovations under its belt. That know how doesn’t come easy, and it is one of the reasons General Motors didn’t want to sell Saab to the Chinese back in 2008. There has already been a transfer of production equipment from Saab to GM’s SAIC unit; that took place last year. Without the IP the Chinese are viewing the Saab investment as worthless. GM retains rights to the Epsilon platform underpinning the 9-5.

The decision has been slated to come next week but Autocar reports that the judge overseeing Saab could preempt that decision and have Saab declare bankruptcy as soon as today. What happens after that is anybody’s guess. Saab was always more likely to fail than succeed unless it was purchased by a large, well-funded automaker. Surviving as a low-volume independent automaker in today’s global marketplace is a tall order.

About The Author

Tony Pimpo is a young automotive journalist who lives in Northern California. He believes the future of the automotive industry will depend in a large part on the recommendation of enthusiasts and Generation Y. More than ever, automakers lately have realized the power of Gen Y. Not only in regards to buying power, but in driving opinion and spreading a brand’s message through the internet and various forms of social media. His appreciation for cars formed at an early age, thanks to his dad, who has always been involved with cars in different ways over the years. Tony has contributed to various websites in his pursuits, and is on staff at GMInsideNews, where he has been writing since the age of 12.

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