New Saab scare: GM to sell

It's been a winter of increasingly alarming rumours for Saab and its factory in Trollhättan. The latest story was broken today by Dagens Industri, who claim that GM have entered negotiations with a Chinese company and Renault for the sale of the Saab brand.

DI’s contacts within GM say that the car giant’s attitude towards Saab is changing as a result of continued heavy losses.

Saab boss, Peter Augustsson, felt compelled to change his busy schedule and devote the day to nipping this particular story in the bud. He told Dagens Nyheter:

“I sit on the board of GM Europe. Selling or closing down Saab has never been on our agenda. The issue hasn’t been looked at in any way. I’m supposed to be working on increasing sales and decreasing costs. Instead I have to spend time denying rumours.”

Augustsson put up a robust defence of Saab, claiming the brand was a vital weapon in GM’s premium car market strategy:

“GM only have 5% of the world’s premium market and only two tools with which to increase our share: Cadillac and Saab. So there’s no question of getting rid of one of them.”

The Autumn’s business pages were dominated by the dramatic head to head tussle between Trollhättan and the Opel factory in Russelsheim, Germany, to secure production of all GM’s medium range cars in Europe.

This has been the subject of intense speculation ever since the two factories submitted their bids in November. Although no official statements have been made, DN are convinced that the decision has gone to Germany.

Last week the paper claimed that GM’s strategy was to let Trollhättan down gently with a series of judicious leaks in the press. Recently, German papers have been confidently claiming victory for their team.

Furthermore, the paper claims that the whole competition was a charade, with the outcome never in question. The key factor is simply that Germany is a big market and it would be pr-suicide, as well as economically risky, to make drastic cuts there.

The happy result of the well-publicised ‘tug of war’, as far as GM are concerned, is that they have two factories in good shape.

The final rumour is that Trollhättan is being given production of a new small Cadillac for the European market as a consolation prize. But again, nothing has been officially announced.

Paul Åkerlund, the chief shop steward for Metall at Saab, seemed reasonably pleased at the prospect. He told DN in January:

“If it’s true, then it’s great news. But I haven’t heard anything about it.”

It’s thought that GM plans to use the new car, which is going to be launched at the Geneva Motor Show in March, to introduce the Cadillac brand to Europe.

Saab spokesman, Christer Nilsson, was also positive about the idea:

“We’re producing 110,000 cars in a factory with a capacity of 175,000, so we could take on the extra production without any problem.”

GM promised to announce the result of the Trollhättan-Russelsheim ‘tug of war’ in the first quarter of 2005. By that reckoning, Saab, Sweden and the rest of the world shouldn’t have much longer to wait to find out which of the winter’s rumours are true.

Sources: Dagens Industri, Dagens Nyheter