In one of the great spin jobs in recent memory, reluctant parent GM, in a press release announcing the bankruptcy filing, declared that its stepchild is now "on the road to independence."
GM has been trying unsuccessfully to sell Saab for months. In a statement, Saab Managing Director Jan Ake Jonsson said, "We explored and will continue to explore all available options for funding and/or selling Saab, and it was determined a formal reorganization would be the best way to create a truly independent entity that is ready for investment."
GM said it will continue to provide some funds and technical support but intends to spin off Saab by January 1, 2010.
Jonsson said: "With an all new 9-5, 9-3X and 9-4X all ready for launch over the next year and a half, Saab has an excellent foundation for strong growth, assuming we can get the funding to complete engineering, tooling and manage launch costs. Reorganization will give us the time and means that help get these products to market while minimizing the liquidity impact of Saab on GM."
The Swedish government meanwhile said it will not provide additional funds to Saab. Last week, Saab applied to the European Investment Bank for a loan of about $575 million that would be backed by guarantees from the Swedish government.
GM said one goal of Saab's restructuring is to concentrate design, engineering and manufacturing in Sweden — a major U-turn from the U.S. parent's strategy over the past decade.
GM acquired a 50 percent interest in Saab in 1989 and took full control in 2000. Since then, it has created a series of watered-down products for the brand that relied heavily on the GM global parts bin, including platforms and sheetmetal shared with Opel, Chevrolet and even Subaru.
As a result, Saab reportedly has turned a profit in only one year in the past 20, as its appeal has waned and its worldwide sales have plummeted. Last year, the brand sold only 93,338 vehicles, down nearly 26 percent from 2007, and it lost an estimated $340 million. In court documents filed in Sweden, Saab disclosed, "The current outlook for 2009 suggests a similar level of losses and associated funding requirements."
Inside Line says: Saab's rather optimistic restructuring plan projects a return to profitability in 2011 or 2012 — an unrealistic turn of events that appears highly unlikely. — Paul Lienert, Correspondent
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