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China's BAIC in deal to buy parts of Saab: report

TT/David Landes · 13 Dec 2009, 10:50

Published: 13 Dec 2009 10:50 GMT+01:00

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A source tells the Wall Street Journal that BAIC will purchase the intellectual property for two sedan models – the Saab 9-3 and Saab 9-5 – and the equipment related to the production of the vehicles.

Reportedly signed at the weekend in Sweden, the deal also allows BAIC to integrate Saab technology into its own vehicles and will be partially financed by loans from state banks in China.

BAIC already has a 20 billion yuan ($2.93 billion) line of credit from Bank of China, the sourced told the Wall Street Journal.

The exact financial terms of the deal weren’t available, however.

GM spokesperson Michael Albano refused to comment directly on discussions between the US automaker and BAIC over the possible acquisition of Saab assets.

"We have discussions in process with many organizations about Saab," GM Albano told the Wall Street Journal.

The source added that BAIC is continuing its weekend negotiations with Saab officials in Trollhättan in western Sweden and “exploring ways to reach further deals for cooperation”.

BAIC is China’s fifth largest carmaker and has previously indicated it’s not interested in purchasing Saab’s Trollhättan factory.

By selling Saab technology, GM is paving the way to close down Saab’s head offices and other parts of the Swedish automaker.

Last weekend it was revealed that GM, which is negotiating with several buyers, is prepared to have Saab split into several companies as the Riksdag has requested.

Throughout the autumn, a number of new companies have been registered, opening up the possibility that each one could be sold as a separate entity.

Story continues below…

Saab spokesperson Eric Geers refused to confirm the Wall Street Journal report.

“That’s nothings that’s been confirmed, either from Saab or BAIC. I have no idea where it’s coming from,” he told the TT news agency on Sunday.

TT/David Landes (news@thelocal.se)

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Your comments about this article

12:37 December 13, 2009 by livinginsweden
Sad day for Swedish industry if this is true .. ... the ex-directors of Saab have to show their faces and explain to Sweden how they screwed up ... and apologize ... and hold their heads in shame,.... and
14:19 December 13, 2009 by Nemesis
Now begins GM's public asset stripping of SAAB.

Now we know why they had no real interest in selling to Konegsegg.

They are breaking the company up and stripping out the assets.

Maybe now the Swedish government will realise what sort of liars GM are.
15:33 December 13, 2009 by bjinger
Swden and US are good friends, but God knows that business is business.
15:34 December 13, 2009 by falcon
Very Sad day, sell tooling to China. Sell the rest to a weak buyer (Spyker) with no experience which loses money on its own. This will be bad for Sweden and is not the right answer for SAAB.
16:51 December 13, 2009 by JoeSwede
I wish it could have turned out different. I think car manufacturing thinking as presently contimplated by GM & others is that it is not going to work in Sweden. Is it the location, the high salaries vs. the new competitors around the world, or other reasons?

Sweden should look at putting together an electric car. We have cheap electricity through hydro. The buildings and the infrastructure will still be there...
17:40 December 13, 2009 by Renfeh Hguh
Even Swedes lost interest in buying SAAB's, so why would anyone else want to buy them? This is probably for the best.
18:07 December 13, 2009 by elkmtnman
The main concern now here in the US is that we get a chance to purchase these great new Saab cars that are near ready to launch...... the NG 9-5, 9-3X, and the crossover 9-4x.

It appears from previous reports that BAIC is bidding on the old generation tooling and rights for the old generation 9-5 & maybe 9-3. That should not be a problem for the future.. and maybe help GM & Saab get some financial return for that investment from 10-15 years ago.
19:19 December 13, 2009 by Nemesis
@ Renfeh Hguh

Tell that to the people who are about to lose there jobs. You are not going ot pay there bills.
19:32 December 13, 2009 by Twiceshy
If it's a money losing business without any reasonable prospect of being profitable, it should be dropped. The laid off workers can collect their unemployment benefits until they find something productive to do... (and no, producing cars to sell them at a loss is not productive)
20:11 December 13, 2009 by Rennsport
I am looking forward to test driving the new 9-5 it looks like an amazing car, and I already know I love the potent silky smooth growling V6Turbo motor in the rare Aeros since I have it in my 2008 9-3Aero, which I love ! My '08 9-3Aero SS 2.8T is absolutely wonderful. It get looks wherever it goes. I rarely see another Aero on the road. And it's fast and fun to drive. And the 9-3 held the best safety rating in its class when I bought it in 2008. There are some great new SAAB turbos coming out in the new year or two, and I hope to buy another new one in the next few years. I wish the best for SAAB and it's employees.


Texas Realtor
20:12 December 13, 2009 by Renfeh Hguh
Nemesis darling, you cannot go on protecting jobs forever when reality has moved on.

If it isn't economical then it is better to just bite the bullet.

There is no place in the world for a company like SAAB producing cars on it's own. They need to be part of a large car company that is willing to invest in the brand unlike GM. That's not likely to happen now.

Get over it!
20:21 December 13, 2009 by Nemesis
@ Renfeh Hguh

OK, lets have it your way.

Why are you not arguing that all US companies who recieved bail outs such as banks and car companies, should have been allowed to be bankrupt.

Do you agree they should all have been bankrupted, all employees fired and permanently closed?
21:28 December 13, 2009 by Renfeh Hguh
We are not talking about American car companies here.

Personally I think one of them should have gone under even if it was simply a punishment for the US auto makers being so stupid that they could not see beyond the SUV etc..

But as I am not a citizen, resident or taxpayer in the US, I don't really care that much about what the yanks do. However Sweden is another matter.
21:34 December 13, 2009 by Flying Scotsman

No government can afford to see the collapse of the financial system, due to the large scale effects. Although the same effects caused by the automobile industry are minimal in comparison and are easily absorbed.

SAAB should have gone 10 years ago!
21:56 December 13, 2009 by Trollspeed
Shame on you "THE LOCAL" !!!!!!!!!!!!!!!!!!

This is NOT news, this is missleading NEWS.

When you want to bring NEWS do your researches and bring it correct!!!

Saab is only selling the OLD TOOLING from the OLD9-3 and OLD9-5 to BAIC!!

And that IS GOOD NEWS, with that money and a better to sell (READ smaller) company a deal with Spyker or ........... will be more clear now then before!!

So "THE LOCAL" If you bring NEWS than do IT RIGHT and don't scare people!

I was hoping that the Swedisch Press was more positive, I think that you Guy's are hoping that Saab will close down!!! Well I hope not and for all the POSITIVE thinkers overhere, Let's make it a beautyful christmas for all the Saab employees and there family's, LET SAAB ALIVE AND KICKING!!!!!!!!!!!!!
22:04 December 13, 2009 by Nemesis
@ Renfeh Hguh & Flying Scotsman

You both argue for closing Swedish companies but make excuses for keeping open US companies.

The double standards in your answers speaks for itself.

Are you two going to employ the thousands of workers made unemployed by closing SAAB? The answer to that is no.

Closure of SAAB an Volvo will rip the heart out of Swedish manufacturing for the next decade and give a lot of support to the far right, which would cause severe damage to Sweden's standng in the world.

Thousands will lose not only there jobs, but there homes when they fall behind on there mortgage payments.

Regarding SAAB, all its profits were declared outside Sweden, the same with Volvo.
22:23 December 13, 2009 by Renfeh Hguh
Excuse me, but where have I made an excuse for keeping open US companies? I just said I don't care, afterall the bailout was not done with my tax money. On the other hand I if the Swedish Government wasted my tax money keeping a dead company alive I would not be happy one bit.

How and on which planet would the closure of SAAB give support to the far right? Do you mean SD?? If anything it will move the support more towards the left, the Soc Dem and V.
22:33 December 13, 2009 by Twiceshy
Nemesis I'm sure they can find a cheaper, smaller home after selling their homes that they can't sustain. Maintaining money-losing businesses for the sake of maintaining the status quo for unprofitable employees is laughable.

If SAAB is really profitable as you suggest in your last paragraph, why aren't there more companies lining up to buy it?
22:38 December 13, 2009 by Nemesis
@ Renfeh Hguh

The company is not dead, even though your words read like you would take delight out of killing it.

@ Trollspeed

The local regularly leaves out important facts, which distorts the stories significantly.

They are either terrible journalists, deliberately working to an agenda or both.

Also the money GM earns from this sale will go to GM not to SAAB Sweden. They have been declaring profits outside Sweden since taking it over, whch distorts the overal picture.
22:53 December 13, 2009 by Trollspeed
Well my "source" has confurmed that the profits will be in Sweden afterall...........

That's a good sign, Hoping that the "guy's" will get the deal done in Zurich right now! Fingers crossed!!!!!!
23:09 December 13, 2009 by Nemesis
@ Twiceshy

Your statement

"I'm sure they can find a cheaper, smaller home after selling their homes that they can't sustain."

is disgusting.

These people are ordinary workers, with ordinary houses, not mansions. If they get in financial problems, they can not sell as the market is depressed at present. As well they don't have mansions, they have ordinary small family homes.

What planet are you on?

Have you ever even been to Sweden?
23:20 December 13, 2009 by Twiceshy
Nemesis so you're saying that these poor workers will go homeless if they get fired? There's no possible hope for them?

Yes I have been in Sweden for a while... if I get in financial trouble I will sell my house and buy a cheaper one or rent. There are plenty of solutions other than begging the government to bail out a money-losing company.

It's easy to claim that GM was misreporting SAAB's profits. It's not so easy to explain why GM can't find buyers for SAAB if it's actually profitable. Surely it would be in GM's interest to disclose SAAB's profitability in order for GM to get the best price on the sale of SAAB.
23:38 December 13, 2009 by Renfeh Hguh
Nemi baby,

Please post you business case as to how SAAB can become a profitable (or at least break-even) company in todays market place. I will be interested in a good laugh.
23:59 December 13, 2009 by Trollspeed
"Renfeh Hguh"

Nemi baby,

Please post you business case as to how SAAB can become a profitable (or at least break-even) company in todays market place. I will be interested in a good laugh.

Just a silly guy....................He didn't know better.......................High IQ even..........
01:10 December 14, 2009 by aaww

to answer your question "Why are you not arguing that all US companies who recieved bail outs such as banks and car companies, should have been allowed to be bankrupt."

because americans can print their green paper and make chinese buy their paper all the time, can you swedes print your krona debt and make chinese buying them?

until then you are not gonna bailout your car company and workers as well.
04:28 December 14, 2009 by falcon
This was copied from another news site - pretty much says it all...

Spyker, now that is more funny than Koenigsegg! What is GM thinking with these supercar makers? What happened to the legitimate bidders?

Spyker has never made money.

Spyker has never made an acquisition of this scale.

Spyker has never managed a manufacturing company of this scale.

Spyker has never managed a distribution company of this scale.

Spyker can't turn around its own company,let alone SAAB.

This is not Ed Whitacre's finest hour. Why not sell SAAB to professionals? Shame on GM!
04:57 December 14, 2009 by wenddiver
Sweden's image as a Sociaist country hurts the image of SAAB. Socialism is associated with lazy workers, bankrupt companies, poor quality control and wasted effort fighting government Bureacracy. None of those things make for an efficient corporation.

Sweden will have to re-shape their business plan if SAAB is to be sucessful, even if bought. A Chinese luxory car??? Would Probably be very hard o sell in US. Communism is not associated with luxory/quality.
07:26 December 14, 2009 by lingonberrie
Sweden will sustain and thrive, of that I have no doubt.

There is much to much negativism here about Saab and socialism.

Those Swedes who go on about Swedes losing jobs as though they just got a mosquito bite must suffer the capitalist disease of the American mind-set and should apply for jobs with corrupt and dying GM, and failing that, apply for a job on Wall Street.

Rennsport already has two Swedish autos and is looking for a third, so he is, apparently, not among the statistics of the unemployed, thus he is good for Saab and Sweden..

He should also count himself lucky to have the financial assets to collect high-end autos , but his Texas realtor sign-off has me puzzled.

Who is buying real estate in Texas in the midst of the American Depression?
07:33 December 14, 2009 by rugla
Spot on Lingonberrie!

@ Nemesis

Painful as it seem, and sad for people losing their jobs, all IPR and assets were stripped long ago, SAAB has not produced good technology for some time, and that is the truth.

As far as the people concerned, look on the bright side, a good kick in the butt, although it will knock a few down, and yes some will stay in bidrag costing the state a lot of money, will turn positive as many will start things of their own, while others re-tool and go on and contribute to society, you underestimate survival and peoples fighting spirits.

We all trust that there are still good people with talent working there and that not all good IPR has jumped ship many months ago, which always happens when things get tough.

So please stop whining, as many will think that your only source of meaningful dialogue is at the local, you take shots at everyone and their daughter, with an opinion on any subject, conduct unbecoming a female and so un lady like.
07:34 December 14, 2009 by wenddiver
It is not a recession, it is a skinning of every sucker crazy enough to believe that their $100.00 piece of stock is only worth $6.00, LOL Sucker! It's the greatest sale of the century. Ha, Ha. Lot's of people are buying things of permanent value, ussually bought with money the US Government gave them in the first place.

An opportunity to make money like this won't come again in a hundred years.
09:43 December 14, 2009 by Flying Scotsman

First to you're reply (16): You both argue for closing Swedish companies but make excuses for keeping open US companies. And the double standards in your answers speaks for itself.

To be clear I have not even commented with regards to this, therefore I m a little confused to where you get this information from, and your conclusion to the double standards has no grounds to base on.

You also say that "Closure of SAAB and Volvo will rip the heart out of Swedish manufacturing"

I think the SAAB issue, which if you consider that the company have not made a profit in the last 20 years, it is then inevitable that the company should be closed down. Or in the issue of Rover in the UK, the Chinese bought the production tools along with the company name, but left the factories because production costs are too high. This I think. Is exactly the same problem Sweden has with SAAB, and it also looks to be going to the exactly in the same direction as Rover.

If jobs are lost as a result of this, I am very sympathetic to the people. But the Swedish people need to get over the fact, that the only country where SAAB has it's largest market share is Sweden. Should we just streamline supply to this demand, maybe then the patriots will be happier if this were the case, in at least they still get what they want.

SAAB was allowed to get too big, without a safety net, or maybe now they have reached the end of their product life cycle?
09:51 December 14, 2009 by bjinger
to #27

It's an old theory. You speak like a fiction communist in your mind.
09:47 December 16, 2009 by Flying Scotsman
The only way SAAB can be saved is to scale down the size of the company, to the point were it can be profitable, in economics it is done by reducing your long run average cost, to the point where it meets profit, therefore both are equal to zero, no loss and no profit but a balance. From there possibly can SAAB be operational.
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