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Saab abandons deal with China's Hawtai

TT/AFP/The Local · 12 May 2011, 09:23

Published: 12 May 2011 09:23 GMT+02:00

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The bailout partnership worth €150 million ($212.5 million) in urgently needed cash from Chinese firm Hawtai Motor Group disappeared as suddenly as it had emerged.

Saab and its Dutch owner Spyker announced that the deal was off "with immediate effect" because Hawtai Motor Group had been unable to obtain the green lights it needed.

Saab spokeswoman Gunilla Gustavs voiced disappointment, saying that Saab continued to look for other partners in China.

"It's fair to say that it is disappointing," she told AFP in Stockholm.

"The work continues to secure short and medium term funding," she said adding "it (Saab) is open to both continued dialogue with Hawtai and with others, including Chinese partners."

She declined to comment on whether the collapse of the deal was linked to comments by Sweden's top diplomat in Beijing last week.

On Friday, Hawtai defended itself against claims reportedly made by Swedish ambassador Lars Freden which raised doubts about its ability to salvage Saab.

Swedish media last week reported Freden warning the foreign ministry that Hawtai may have inflated its output data and changed chief executives several times in recent years.

"I have no information on that," Gustavs said when asked about Freden's comments.

Spyker, a small auto firm, said in a press release. "Spyker announces today that Hawtai Motor Group Company Limited and Spyker terminated the agreement by and between Hawtai, Spyker and Saab Automobile with respect to funding and (a) strategic partnership."

Announced on May 3, the Hawtai deal was to inject €120 million from the Chinese car maker in return for a stake of up to 29.9 percent in Spyker, and a further 30 million euros in the form of a convertible loan.

It was seen as a last-minute lifeline for Saab, where production stopped on April 6 "until further notice" because unpaid suppliers had halted deliveries.

Spyker itself had rescued Saab in January 2010, buying it from the US giant GM, then in serious financial difficulties, for $400 million.

Spyker had great plans for Saab.

The Hawtai deal was subject to approval and conditions including consent from Chinese government agencies, the European Investment Bank and the Swedish National Debt office.

"Hawtai was subject to definitive transaction documentation and certain conditions which included the consent from stakeholders," Spyker said.

"Since it became clear that Hawtai was not able to obtain all necessary consents, the parties were forced to terminate the agreement with Saab Automobile and Spyker with immediate effect."

Story continues below…

Earlier this month, the Swedish government gave Saab the green light to sell its property -- including its plant in Trollhättan, western Sweden – to raise funds to start up production.

The plan calls for the Swedish National Debt Office (NDO) to release its security in Saab Property to guarantee the EIB loan to Saab.

The Swedish government however said the deal still needed approval from the EIB.

"As soon as the EIB drawdown or other equivalent funding is confirmed, Saab automobile plans to restart production depending on the outcome of discussions with suppliers on terms to resume supplies of materials and services to Saab Automobile," Spyker said on Thursday.

TT/AFP/The Local (news@thelocal.se)

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Your comments about this article

10:01 May 12, 2011 by Gletta
How much more money is going to be wasted supporting this dead industry. Shut it down, retrain the staff, invest in new technology and industry instead of throwing the money into a bottomless pit for a manufacturer that cant compete with other car manufacturers. You could even use some of the assets for the new industries at low costs - oh hold on - they just sold them to Mr Antonov.

What is better for the 'ordinary workers' - hopes raised and dashed week after week or building a new future in something that is sustainable. As for the management - what do you expect when you employ many of the same people who failed in their roles with the previous regime?
10:40 May 12, 2011 by Eagle63
@ 10:01: It seems you really don't know what you're talking about....
10:53 May 12, 2011 by Gletta
Why is that then Eagle63? Is it good that people don't know if they are going to work again, is it good that production is stopped, is it good that assets are sold to asset strippers, is it good that no credible company wants to invest in Saab, is it bad to want a sustainable future for the workers and community. I would be delighted if anyone can supply credible reasons why Saab will be a successful car manufacturer in the future.
11:01 May 12, 2011 by Great Scott

If you feel that other people dont know what they are talking about then maybe you do, please tell us what you know.
11:03 May 12, 2011 by mdlouis
Slightly different perspective of this story here:


Saab-owner Spyker loses Hawtai funding deal ... "Spyker said the agreement had been terminated because Hawtai had been unable to secure shareholder approval."
12:05 May 12, 2011 by TheOriginalBlackMan
Re-train the workers? LOL, to do what, make bicycles?

Most SAAB employees are not marketable on the job market.

As for SAAB it's been a complete and utter failure for over 20 years. If it were not for the American tax payer SAAB would have went bankrupt some time ago.

Nevertheless, four things need to happen so as to not have a total collapse of the surrounding communities and busniesses that depend on SAAB: Shut the company down (all of it's subsidaries also i.e. Airplane and boat), sell its assets, give the employees a severance package and have them go back to school to learn another skill, simple.

Why throw more money (Skatt) into a company that is a failure.
12:20 May 12, 2011 by Rick Methven

What a load of garbage you post.

The US tax payer has never paid a cent for SAAB for the 10 years that GM owned 100% of SAAB cars, they used SAAB as a loss to avoid paying US tax.

All costs of production where loaded on to the Swedish unit while all sales income in the US went to Detroit. a typical US corporation trick.

As for the SAAB Aircraft company, it has nothing to do with SAAB cars since GM took over 100% ownership of the car division.

Just another dumb poster who posts crap
12:36 May 12, 2011 by BillyB
Time to let SAAB go im afraid.

It will never become profitable, so how long can people keep throwing money into a blackhole...

Every penny spent on SAAB now is a penny wasted.

It will be tough for a while but better than losing a fortune just to delay it a year or two when it will enevitably happen anyway
12:46 May 12, 2011 by Stickeroo
Well Gletta is kinda right in what she says. What spyker should have done is leveraged SAAB to the hilt and used the money elsewhere. Or, (depending on their debt situation) liquidated all the assets and pocketed what's left. To try and rebuild a brand that has had so much bad press in the last couple years is a major feat. I've always thought SAAB cars we're alright, but I'd never consider buying one now just cuz you'd think that all these problems probably end in them making a lesser quality product.
12:56 May 12, 2011 by Gletta
Stickeroo also provides a good point. Dealers and the public need confidence in any product - will you buy a product that cost so much and not be sure the company is going to be around in the future to provide parts etc and ensure the residual value in the car when you buy the next one is as high as possible. Dealers and the public have bought into the the rebuild and resurrection once. Saab, if it gets going again, is going to have some expensive PR job to get them to do that again.

As for the originalblackman, with the right training, confidence and help Saab workers could retrain to do many jobs you are a fool to write people off, I hope you are never in that position.
13:13 May 12, 2011 by Jasoncarter
Saab are completely screwed now. Their cars are several years behind the competition - The new 9-5 isn't all that much car for the money and pales next to the new Audi A6 for example.

Their biggest problem is that they have focussed entirely on two cars - the 9-3 and the 9-5 - which have become progressively more expensive. Other brands - in particulary Skoda - have crept in and stolen their share of the market with substantially better cars at substantially better prices. The forthcoming 9-4x starts at 400,000sek and only comes with 2 petrol engines. And looks like a Korean effort.

What has done for them is a complete inability to diversify or to stay true to their roots. The mooted 9-1 compact car is what they should have been making for years.

It's also difficult for Swedes to get perspective on just how popular and well known Saab are outside of Sweden. Here it's a standard choice for many, outside it's only the UK and the States that are markets of any note, and even there it's seen as a quirky choice of car.

The whole thing stinks of Rover and a dead horse being very firmly flogged.
14:00 May 12, 2011 by Jasper2
Nulla tenaci invia est via!
14:09 May 12, 2011 by jamesblish
I would never choose a Volvo over a SAAB.
14:35 May 12, 2011 by TheOriginalBlackMan
SAAB aerotech is a separately owned company . Also, after buying a 50 percent share of Swedish carmaker Saab in 1989, GM bought the entire company in 2000.

Unless you are ex-CPA (ACCONTANT) for GM, please refrain from making up your own theories as to how GM used American Tax payer DOLLARS.
14:47 May 12, 2011 by jamesblish
Maybe SAAB should try and make a car for regular people instead of going after the boring old "premium" segment where Mercedes and BMW have been kings for years. SAAB used to be a brand that made fairly affordable cars for regular people, cars that were a bit quirky and cutting edge. Where did that go?
16:01 May 12, 2011 by 2394040
Although people as a rule don't believe in conspiracies, I think one is going on in the case of SAAB. The big automakers don't like competition; don't even like one another probably. So they would like to see the elimination of ANY competition. With SAAB, they appear to have what they want; a very small automaker that can be run out of business.

Once that's accomplished, they can return to their previous pursuit: trying to put one another out of business. It might take quite a few years, but eventually we will end up with one huge mega-automaker. But then, we are obviously headed towards a one-world government, so it makes sense to have only one huge automaker.
16:01 May 12, 2011 by cookiemaster
This is a reply to @nukechina&liberals

How about German car makers...or French...perhaps they can squeeze some Euro to help failed liberal and labor indoctrination...I know in economy where you are sub human to much cheaper Chinese work force(110 vs 1 what population ratio is after they have received entire technology for free), that it can be really tough. Swedish Wigger politic failed economically now >>>BILDT
17:59 May 12, 2011 by Icarusty
Just as well really, considering the level of hostility the Chinese have received from politicians and the public alike. The company, its workers and the people affected can go rot in unemployment hell as far as I'm concerned... that's what you get for being xenophobic cunts filled with hatred.
00:38 May 13, 2011 by cookiemaster
There are 136 Chinese per square kilometer in China...There are 20 people per square kilometer in Sweden....
09:26 May 14, 2011 by J. L. Belmar
I like some comments and dislike others. I certainly would like to know why all the fuzz around a car that stopped being Swede many years ago´Why should we tax payers contribute to save Saab? And I believe that it the title of the story should have been

"China´s Hawtai abandons deal with Saab" after the comments made by "ambassador" Lars Freden. With that type of representatives in a foreign country, Saab's employees in Sweden do not need enemies.
01:10 May 16, 2011 by JoeR
Australia with only 20 million people can support 2 manufacturers and we are not on the door stop of Europe, therefore we only have a limited customer base.

FORD, GM (Holden)

Can someone explain why Sweden cannot? It seems more like they don't want to compete.

BTW: In our family we have a Saab, Volvo and a Holden
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