Last-minute offers may still not be enough to save Saab

General Motors carries on with winding-down process despite late flurry of interest

By Sarah Arnott
Saturday 09 January 2010 01:00

Saab automobile has had a trio of last-minute offers, reviving the possibility that General Motors may not have to shut its loss-making Swedish subsidiary. But although the US car-maker is considering the bids, it said yesterday that it was still proceeding with plans to wind down Saab.

The biggest surprise was a pitch from the Formula One tycoon Bernie Ecclestone, in partnership with a Luxembourg private equity group, Genii Capital. No financial details were disclosed but Genii said that "given an adequate and short time frame" it would "aggressively work towards a successful closing of the transaction".

Meanwhile, Spyker, the Dutch group which has been in dialogue with GM about Saab since early last month, put forward a second revised offer yesterday. Victor Muller, the chief executive, said: "We believe the Saab brand has lots of potential and would be keen to close a deal as quickly as possible."

A Swedish investment consortium, including the former deputy prime minister Jan Nygren, has also spoken to GM about its plans for Saab.

The US parent company said before Christmas that all bids had failed and Saab would have to be wound down. As recently as this week, GM's chief executive, Ed Whitacre, appeared resigned to the outcome. "We said 'just show up with the money and you can have it', and they haven't shown up with the money," he said on Wednesday, the day before the most recent deadline for offers expired.

The new approaches have given the Saab marque a stay of execution and the proposals were being considered at a board meeting in the US yesterday. But GM nonetheless confirmed that it had appointed Alix Partners to supervise an orderly wind-down of the 56-year-old Swedish car group.

"The process is expected to take several months and will ensure that employees, dealers and suppliers are adequately protected," GM said in a statement.

Even if GM does manage to sell the business, experts are sceptical about Saab's future. The company has been up for sale since last January and has not made a profit since 2001.

The problem is size. It sells only two models and produces just 100,000 vehicles even in its best years. Without the vast GM machine behind it, such a tiny operation would struggle to compete with the likes of Toyota, which produces more cars in two years than Saab has in its entire life.

"Saab just cannot be a standalone company," said Professor Garel Rhys, of Cardiff Business School. "To expect Saab on its own to do something it has manifestly failed to do throughout its entire history – namely, to become a profitable and sustainable company – is asking a great deal."

He believes none of the three bids is credible. "Bernie Ecclestone may be an entrepreneur with tremendous guile but he isn't a magician and he cannot alter the laws of economics," Professor Rhys said. "The other two deals are similarly absurd. What on earth do any of them bring to the table?"

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