GM Rejects Saab Rescue Plan, Future Unclear

GM has rejected plans for Chinese investment in Saab, leaving a cloud of doubt around the struggling Swedish carmaker's future.

This news sits a little strangely with a statement from Saab last week that Chinese company Zhejiang Youngman Lotus had paid US$5 million for a stake in its operations. 

With this payment reportedly directed to covering immediate tax expenses, talks have also been held with an unidentified Chinese bank to secure a US$800 million loan to pay suppliers and staff, and to resume production.

However. without the approval of former owner General Motors, which retains preferential shares in Saab and owns much of the technology used in Saab's line-up, no deal can go ahead.

At this point, a nod from the US carmaker appears unlikely.

"Saab's various new alternative proposals are not meaningfully different from what was originally proposed to General Motors and rejected," GM said.

"Each proposal results either directly or indirectly in the transfer of control and/or ownership of the company in a manner that would be detrimental to GM and its shareholders. As such, GM cannot support any of these proposed alternatives."

GM has made its position clear in recent months, confirming that it will not continue to licence its technology to Saab if it partners with a Chinese company, due to the potential impact on its own interests in that market.

Victor Muller, CEO of Saab and its parent Swedish Automobile, told Swedish paper Svenska Dagbladet that GM's statement could only be based on rumours. 

With a sting of his own, Muller added that GM "has no say about a plan that means that Youngman would receive zero percent of the shares in Saab".

A court decision is due in coming hours on whether Saab will be allowed to continue to operate under protection from creditors.

Saab is in an uncomfortable vice. Its request to Sweden's Vanersborg court that its administrator Guy Lofalk be sacked after he called for an end to creditor protection because the company had run out of money, was rejected due to "insufficient grounds".

To make matters more bizarre, the court denied Lofalk's own request to quit his job.

On the matter of Saab having a future with Chinese owners, the "no" from GM may not mean "no, not ever". There is quite likely another game at work here, one which possibly sees GM angling for a bounty for its technology currently used in Saab products.

To "make hay while the sun shines" is not a Chinese proverb.