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February 15, 2012
GM set to pump billions into Saab deal
Published: 15 Sep 09 17:00 CET | Double click on a word to get a translation
Online: http://www.thelocal.se/22098/20090915/
General Motors is set to pay out an estimated 10 billion kronor ($1.4 billion) in a bid to ensure it completes the sale of its troubled Swedish subsidiary.
- Chinese automaker signs on to Saab deal (9 Sep 09)
- GM to fill Saab funding hole: report (2 Sep 09)
- Reinfeldt fobs off Koenigsegg Saab plea (20 Aug 09)
"GM is going to have a certain interest in Saab as part of a special financial arrangement that will be revealed in due course," said GM's European manger Carl-Peter Forster, speaking to news agency TT at the Frankfurt Motor Show on Tuesday.
Koenigsegg Group representatives have previously stated that GM is prepared to shell out 2.8 billion kronor for preferential shares in Saab Automobile, a move that would enable the ailing US giant to benefit from any future Saab profits.
GM's decision to sell Saab has already proved costly, with 7 billion kronor disappearing when the parent company took over a number of Saab's debts to its subcontractors.
GM has also agreed to pay for the production tools for the new Saab 9-5 and to release the Swedish firm from commitments to repay a restructuring loan, undertakings that amount to a combined total of around 3 billion kronor.
GM has also said it will contribute to further alleviating Saab's general cost burden to help ensure the successful implementation of Saab's new business plan.
Saab chief Jan Åke Jonsson confirmed that GM's contribution to Saab would land in the region of 10 billion kronor.
Jonsson added however that GM was hoping its goodwill would eventually lead to a return on its investment.
"We are going to retain our cooperation with GM through a number of agreements, and GM will deliver quite a few products to us that they make money from, such as engines and gearboxes," he said.
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Honestly I am increasingly ashamed to be an American. The arrogance we display in insisting that we have the answers to life's problems is enough to make one's stomach turn.
The business model I refer to is the one that GM invented. The notion that one can build the same crappy platform and running gear and imbue it with any amount ( the more the better) of gaudy badges and gewgaws and stupid vinyl decals and lots and lots of shiny chrome crap and then market it as something else. America has not built a significant automotive product since the sixties.
Yet it's not enough that we dupe our own unsophisticated market into accepting this level of lowered expectation ; we have to try to force it on the rest of the world. This is madness. Please Sweden stand up to corporate greed and take back your heritage. Don't let the ugly side of capitalism chaulk up yet another mistake. Save us from ourselves.
The sad situation reflects more on the incompetence of local SAAB management in recent years than on GM ... keeping a cripplingly expensive local supplier cost base in a misguided attempt to preserve local Swedish manufacturing has brought a once proud and viable Swedish brand to the point where vast amounts of (Swedish and US) taxpayer money is needed just to keep it going ... and near term disappearance is a very real possibility :-(
Koenigsegg is the wrong buyer.