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Saab files for bankruptcy

TT/AFP/The Local · 19 Dec 2011, 11:12

Published: 19 Dec 2011 09:26 GMT+01:00
Updated: 19 Dec 2011 11:12 GMT+01:00

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The final desperate efforts to organise help in China were obstructed by former Saab owner General Motors (GM) over licences.

"They were here this morning and submitted the documents requesting bankruptcy," a clerk at the Vänersborg District Court told AFP, adding that the court was currently examining the request.

A statement on the court's website said three Saab companies had filed for bankruptcy: SAAB Automobile Aktiebolag, Saab Automobile Tools AB och Saab Automobile Powertrain.

"The court aims to handle the request and appoint a liquidator rapidly," the statement said.

Saab's owner Swedish Automobile said in a statement that "the company without further funding will be insolvent and that filing bankruptcy is in the best interests of its creditors."

"It is expected that the court will approve of the filing and appoint receivers for Saab Automobile very shortly."

The decision follows Saturday's announcement by GM that it cannot accept any of the proposed solutions presented so far to help save Swedish automaker.

"Each proposal results either directly or indirectly in the transfer of control and/or ownership of the company in a manner that would be detrimental to GM and its shareholders,” GM spokesperson James Cain said at the weekend.

“As such, GM cannot support any of these proposed alternatives.”

Citing sources within Saab, daily Svenska Dagbladet reported on Saturday that the company planned to present a plan to the court on Monday whereby the Swedish automaker would launch a technology development company in the Netherlands, half of which would be owned by Chinese Youngman.

But according to Swedish trade paper Dagens Industri (DI), Youngman, responsible for the last cash injection into the beleaguered Swedish carmaker, is now unwilling to send Saab any further funds.

The reason behind Youngman's decision is allegedly GM's categorical 'no' to any further Chinese involvement.

In a statement, Swedish Automobile confirmed Youngman pulled out of the talks following Cain's remarks.

"After having received the recent position of GM on the contemplated transaction with Saab Automobile, Youngman informed Saab Automobile that the funding to continue and complete the reorganization of Saab Automobile could not be concluded," it said in a statement.

On Monday Saab saw no other solution than to file for bankruptcy.

News agency TT had the news confirmed from Saab CEO Victor Muller himself outside of the Vänersborg District Court on Monday morning.

Muller had been due to appear before the court on Monday as judges had been scheduled to decide whether to lift or prolong the three-month bankruptcy protection Saab had been placed under while it was attempting to negotiate a deal to rescue the company.

Muller has been struggling to put together a deal to save Saab from bankruptcy, primarily negotiating in recent months with two Chinese groups, carmaker Youngman and car distribution company Pang Da.

Story continues below…

The attempts to sell Saab to Chinese partners have been seen as the last chance of saving the Swedish carmaker, which was already on the brink of bankruptcy when GM sold it to Swedish Automobile -- at the time called Spyker -- in early 2010 for $400 million.

It has been a rocky road since then.

The carmaker -- which began life in 1937 as an aircraft manufacturer, something which became evident in the aerodynamic, sporty shape of its first concept car designs -- was forced to halt production in April as suppliers stopped deliveries over mountains of unpaid bills.

Saab's some 3,700 employees, whose salaries have been delayed five months running, did not receive their November paychecks. Once the bankruptcy filing is approved, they will be paid through a state wage guarantee.

Saab built its first prototype cars in 1947 with the first production version rolling off the assembly line two years later.

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

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Your comments about this article

12:04 December 19, 2011 by Eagle63
Without Saab, Sweden will be a lot less interesting that's for sure. Knowing Victor Muller maybe he will start up something new, who knows....

I feel sad for all the good Saab people that are losing their jobs. They have GM and the Swedish government to thank for their predicament.

My advice; emigrate to Canada 'The True North Strong and Free'...

I myself am realy glad I traded in my Gm-era Saab for an older Saab 9000, not yet infested with GM crap. In hindsight this was essentially the last 100% true Saab..., back in 1997/1998, before GM started to screw things up..
13:55 December 19, 2011 by Jes
This is sad and suprising . The government should have done something to save one of the most famous symbols of Swedish workmanship.
18:05 December 19, 2011 by Vill
I prefer old Volvos manufactured before 1999.
18:55 December 19, 2011 by Escort
Both Saab and Volvo were in decline before GM and Ford took over. I suspect that Volvo would have fallen by the wayside several years ago had it remained independent. Unfortunately, both companies have become increasingly uncompetitive and marginalised in recent years, particularly Saab. The Germans have surged ahead to dominate the premium sector, and cheaper mainstream marques have improved beyond recognition.

Perhaps they could learn from Skoda, who have struck a chord by offering honest, rugged and affordable cars which people actually want to buy. Volvo and Saab are not comparable with Audi/BMW/Mercedes, and attempting to play out of their league has been a mistake. Incidently, I do not agree that the "Ford era" Volvos are inferior to older ones. It may not be what people want to hear, but in my experience the quality of the later cars is actually better.
19:25 December 19, 2011 by chocolatechips
Sad day. It may sound funny but Saab can go back to 1947 and start from scratch. Build a modern version of 92 or 93 which will compete in BMW 1 / Audi A3 segment. Retro car are trendy for some time and seems it will be in the future. I'm pretty sure they have the styling ability and they have the engineers to build new mechanical and etc. parts. Hope Saab returns soon in anyway possible.
21:20 December 23, 2011 by 3rdjerseyman
My 2002 9-5 2.3t wagon has 224000 miles- 375k- and still runs beautifully. Did I spend money on it-certainly, but it is still comfortable, fast enough and economical.

Our 1992 9000 only made 190000 miles- but the kid wrecked/abused it- it still ran great but needed an economically unfeasible repair.

The 1999 9-5 SE with the 6cyl turbo was a great driver and saved the other kid's life in a total.

I've had SAAB, MB, Jag, Volvo, Lexus and various US cars- SAAB was unique, and in many ways, the most enjoyable to drive- especially for a bigger person.

I think the Swedish govt is foolish to allow a national icon to fail. SAAB has great cars on the verge of production. Why not a bailout?

China's national business ethic is blatant theft, absolute discrimination against foreigners and will never do anything other than exploit anyone foolish enough to partner with them. The West is making China rich, and China will soon start a war in Asia. They are- except for the lack of business ethics- just like the Germans in 1910- a great nation with a sense of grievance.
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