GM finding no takers on Saab?
General Motors, struggling under the weight of a mountain of debt, is finding it difficult to raise cash. For one, the U.S. automaker is finding no buyers for its Swedish Saab unit, according to Swedish Daily “Dagens Nyheter.”
Nevertheless, GM executives are putting on a brave face with the news media. In fact, I found an article in another newspaper, the Australian daily “Sydney Morning Herald” claiming the opposite under the title, “No problems in finding Saab buyers: GM.”
Take a look at what this article says GM has said (I have bolded the interesting parts):
General Motors Corp has dismissed reports that it has not found any interested buyers for Saab, as it has quietly shopped around the Swedish brand.
“It’s still early in the process,” one GM official familiar with the proceedings told AFP. “It’s going to take some time.”
As recently as last summer, GM chairman Richard Wagoner said the company intended to keep Saab in the GM family and re-tool its North American product line.
But as GM’s financial crisis deepened when sales collapsed this fall, GM put SAAB up for review as part of the restructuring plan it presented to Congress in early December in order to obtain $US13.4 billion ($A18.79 billion) in loans.
GM Vice Chairman Bob Lutz recently told the trade publication Automotive News that the term strategic review is “code for ‘we realise they’re not working and something needs to be done.'”
The plans presented to Congress indicated GM was unwilling to make additional investment in Saab products.
GM put its Hummer brand up for sale back in June and so far has failed to finalise a deal, although the hulking brand has attracted some interest from potential buyers.
Paul McCarthy, a consultant with PricewaterhouseCoopers in Detroit, noted
that merger and acquisition activity in the automotive sector has declined since the mid-2008.
I find this story strange because it sounds like GM is suggesting that it will find a buyer for Saab. In the Swedish daily, one hears exactly the opposite. I have translated the text for you:
General Motors (GM) has given up hope of being able to sell Saab Automobile, the Swedish carmaker, which last year lost a quarter of its sales. On Monday, the Ministry of Industry will report on its aid talks with Ford and GM.
It is the industry newspaper, “Automotive News,” which talked to sources in GM management who now admits what analysts have argued from the outset: Saab Automobile is unsaleable.
It is a small car with outdated products. Saab 9-5 is eleven years old, which is some kind of record in an industry where the car models come out in six to seven years. Saab 9-3 is six years old.
What is worse, Saab Automobile has not shown profit since 1995. If the cost of developing new products hasn’t discouraged [prospective buyers], then the history of losses has scared most potential buyer away from the brand.
With a total sales volume of about 93,000 cars in 2008, down 25 percent, the situation looks anything but cheery. In the single most important market, the U.S., sales fell by almost 35 percent to just over 21,000 cars. In Europe, the decline was almost 22 percent, to just 67,000 cars.
These two stories are very much at odds with one another. Obviously, someone needs to get their facts straight. My instinct tells me it is the Swedish story that is probably a lot closer to the mark than the Australian one.