Saab, a unit of General Motors (NYSE: GM) has filed for protection from its creditors after GM announced plans to do away with the brand by 2010 and the Swedish government politely declined to take it over. The reorganization filing, which is different from a traditional bankruptcy, would provide the company with protection from its creditors while it looks to restructure and seek additional financing.
Saab Managing Director Jan-Ake Jonsson said the company has explored all available options and found a formal reorganization to be the best way to create a "truly independent entity that is ready for investment."
Saab had hoped that the Swedish government would come to its rescue, but the center-right government has opted not to because of concerns that this would set a bad precedent, and end up costing far more than people currently think.
Instead, the Swedish government is blaming GM: "I'm disappointed in General Motors, because they're abandoning Saab and are pushing the responsibility over to Swedish tax payers, and I think that is irresponsible," Maud Olofsson, enterprise and energy minister, said this week.
GM had reportedly been willing to pump $400 million into the company if Sweden would provide an additional loan of $590 million, but there was skepticism about whether that would be enough money to turn the brand around. So for now, Saab will sit in limbo along with the rest of General Motors, waiting to see if anyone is dumb enough to pump in more money.
Instead, the Swedish government is blaming GM: "I'm disappointed in General Motors, because they're abandoning Saab and are pushing the responsibility over to Swedish tax payers, and I think that is irresponsible," Maud Olofsson, enterprise and energy minister, said this week.
GM had reportedly been willing to pump $400 million into the company if Sweden would provide an additional loan of $590 million, but there was skepticism about whether that would be enough money to turn the brand around. So for now, Saab will sit in limbo along with the rest of General Motors, waiting to see if anyone is dumb enough to pump in more money.
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Reader Comments (Page 1 of 1)
2-20-2009 @ 1:39PM
Duke said...
GM sure got greedy. They had and still have huge legacy costs to pay, massive debt, and they have unhappy share holders. GM should file for bankruptcy. Saab will be after GM and the taxpayers will have to pay for the mess. However under bankruptcy protection GM can pare themselves down even further than they have already and seek private funding for a smaller leaner GM. Sure the unions will cry foul. At least they will have a job, and the pensions are guaranteed by the PBGC. GM has the Hummer on its back as well. Once GM gets downsized to just Chevrolet, Cadillac, Buick and GMC truck. I think they might have a chance of competing with the imports. The sooner GM files for bankruptcy the better though. GM has a bunch of lawsuits against them and under protection they can get their act together and then step by step pay their pennace for their sins. It will take a few years or a decade is more like it to be forgiven and start fresh. There is going to be a lot of pennies on the dollar payoffs. That is the hardest thing to take.