G.M. Sells Saab to Swedish Automaker
Christian von Koenigsegg, the founder of a Swedish luxury sports car maker that produces just a few $1 million cars a year, is part of a group that is buying Saab from General Motors.
General Motors announced Tuesday that it had agreed to sell its Swedish unit, Saab Automobile, to a consortium led by the sports car maker, Koenigsegg Automotive.
The companies said a deal was contingent on $600 million of financing from the European Investment Bank that is to be guaranteed by the Swedish government. They did not release further financial details of the deal, which is expected to close in the third quarter.
Saab sold 93,000 cars last year, and it has not turned a profit in years. With a narrow, though loyal, customer base focused on Sweden, Britain and the American Northeast, it proved too small to lure the world’s big automakers, many of which are seeking tie-ups to increase economies of scale.
Koenigsegg, an unlisted company with 45 employees based in Angelholm, Sweden, turns out just a few “supercars” — high-performance sports cars costing more than $1 million each — a year. It was founded by Christian von Koenigsegg; a Norwegian entrepreneur, Bard Eker, holds a 49 percent stake.
“I’m struggling to see the point of this deal,” said Philippe Houchois, head of European auto industry research at UBS in London. “Is it to ensure the survival of Saab, to save jobs? It looks like a short-term solution that doesn’t resolve the core issues.”
Saab, he added, is too small to make money in the long term.
With its American parent in restructuring and the Swedish government taking a hard line, Saab filed for reorganization on Feb. 20. General Motors itself sought protection from creditors on June 1.
G.M.’s filing did not include its European operations, which also include the British brand Vauxhall and Opel, both of which it is pooling under the Adam Opel unit in Germany. General Motors will retain a 35 percent stake in that business, which is being sold to Magna International, a Canadian auto parts maker, and Sberbank, a Russian lender, with support from the German government.
In addition to Saab and Opel, G.M. is selling or eliminating three other brands. About two weeks ago, G.M. reached a preliminary agreement for the sale of Hummer to a machinery company in western China, Sichuan Tengzhong Heavy Industrial Machinery Company. Last week, G.M. agreed to sell Saturn to the Penske Automotive Group, whose chairman is Roger Penske, 72, one of the nation’s biggest automobile dealers. It also plans to eliminate the Pontiac brand in 2010.
“This is yet another significant step in the reinvention of G.M. and its European operations,” the G.M. Europe president, Carl-Peter Forster, said in a statement, and the deal represents “the best chance for Saab to emerge a stronger company.”
G.M. will provide Saab with some parts and technology, and Saab will keep production of its new 9-5 model at its facility in Trollhattan, Sweden, as opposed to the Rüsselsheim, Germany, plant where it makes the current version. G.M. and Koenigsegg will jointly finance the introduction of some products in the pipeline.
Jan Ake Jonsson, managing director of Saab automobile, hailed the deal in the statement as “great news” for Saab’s customers, dealers, suppliers and employees. Saab’s union employees also backed the deal.
Saab has said it would need about $1 billion to carry out its business plans. It got $150 million of that from G.M. in February.
Mr. Houchois said the $600 million that the Swedish government is being asked to guarantee is “a big chunk of money, given the uncertainty about sustainability of the business.” The government is ready to open talks with the European Investment Bank on that financing, Bloomberg News reported.
Halldora von Koenigsegg, executive manager at Koenigsegg Automotive, said she could not comment on negotiations over the financing. She also declined to identify the other members of the consortium, which is called the Koenigsegg Group.
Jan Ake Jonsson, managing director of Saab automobile, hailed the deal in the statement as “great news for Saab’s current and future customers, dealers, suppliers and employees around the globe.”
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