GM set to pump billions into Saab deal

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.

But the American car maker has also indicated it intends to retain ties to Saab Automobile even after the Swedish unit has been sold to the Koenigsegg Group consortium.

“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.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


Former Swedish Saab bosses appear in court

Swedish car maker Saab's former CEO Jan Åke Jonsson and the firm's former head lawyer Kristina Geers have appeared in court in Vänersborg in west Sweden, accused of falsifying financial documents shortly before the company went bankrupt in 2011.

Former Swedish Saab bosses appear in court
Saab's former CEO Jan Åke Jonsson. Photo: Karin Olander/TT
The pair are accused of falsifying the paperwork at the height of the Swedish company's financial difficulties at the start of the decade.
A third person – who has not been named in the Swedish media – is accused of assisting them by issuing false invoices adding up to a total of 30 million kronor ($3.55m).
According to court documents, the charges relate to the firm's business in Ukraine and the paperwork in question was signed just before former CEO Jan Åke Jonsson resigned.
Both Jonsson and Saab's former head lawyer Kristina Geers have admitted signing the papers but denied knowledge of the Ukranian firm implicated in the case.
All three suspects deny all the charges against them.

Saab's former head lawyer Kristina Geers. Photo:  Björn Larsson Rosvall/TT
Saab filed for bankruptcy at the end of 2011, after teetering on the edge of collapse for nearly two years.
Chief prosecutor Olof Sahlgren told the court in Vänersborg on Wednesday that the alleged crimes took place in March 2011, when Saab was briefly owned by the Dutch company Spyker Cars.
It was eventually bought by National Electric Vehicle Sweden (Nevs), a Chinese-owned company after hundreds of staff lost their jobs.
The car maker, which is based in west Sweden, has struggled to resolve serious financial difficulties by attracting new investors since the takeover.
In October 2014 it announced it had axed 155 workers, close to a third of its workforce.
Since 2000, Saab automobile has had no connection with the defence and aeronautics firm with the same name. It only produces one model today, the electric 9-3 Aero Sedan, mainly targeting the Chinese market.