Saab To Close, GM Wields The Axe After Negotiations With Spyker Collapse

SAAB, THE ONCE ICONIC Swedish brand of daring aeroplane-inspired turbo cars, is headed for oblivion. Twenty years to the month since it gained control of Saab (in December 1989), GM has announced the company is to close.

Negotiations for its sale with the 'last-chance' aspirant, Dutch specialist car-builder Spyker cars, have collapsed.

Without a buyer for the Swedish brand, GM's announcement could hardly be described as unexpected.

Saab sales globally have dwindled to the point of standstill. In Australia last month, VFACTS figures show that just seven Saabs were sold across the whole of the country. Other markets tell a similar tale of woe; Saab sales in the US are down 61 percent this year.

With GM locked into its own deperate struggle for profitabilty - a battle it is currently losing - it could scarcely be expected to keep a distant brand afloat, especially one it barely understands.

The inescapable fact in Saab's death spiral (that began, to be fair, in the late eighties) is that GM failed to understand what made Saab, and Saab-customers, tick.

Saab's early success, beginning in the seventies when the fabulous 99 and then 900 turbo spearheaded the brand across global markets, lay in its single-minded approach to car design and engineering.

Saabs were different. Once GM, who bought 50 percent of Saab in 1989, began homogenising its products under the GM-Europe umbrella, it succeeded in turning it into just another brand and de-coupled it from a generation of loyal customers.

While there were a string of suitors looking for the hand of the loss-making Saab, foremost among them Koenigsegg and the Chinese BAIC automotive group, the die was cast when the Swedish Government announced that it would not intervene to prop up the ailing carmaker nor act as guarantor for the massive loans needed to see it through to an uncertain profitability.

GM's announcement comes just weeks after talks with Koenigsegg collapsed. While Spyker and its backers (the Russia-based RMC Convers Group) claimed to be "incredibly close" to an agreement, there were too many issues to overcome within the GM imposed deadline of December 31st for the sale.

It also follows GM's announcement last week that it had sold the IP rights to Saab's 9-5 and 9-3 sedans, and engine and transmission technologies, to the BAIC group.

It remains possible that the announcement by GM is tactical and designed to force the issue, but this is perhaps unlikely. Short of a miracle or a change of heart by the Swedish Government, Saab, it would appear, is doomed.

While Saab is expected to satisfy its debts to suppliers (the wind-up of the brand is not bankruptcy), it promises to be a grim Christmas for Saab's 3400 factory employees.

As to the impact on Australian dealerships and parts operations here, TMR is seeking a comment from GM Premium Brands, Australia.