As was expected, General Motors has said it will not support the sale of Saab to Chinese automakers, and the Swedish automaker now faces a possible termination of its voluntary reorganization process. If the reorganization process ends prematurely, Saab will have no protection from its creditors and could be forced into bankruptcy.
GM used to own Saab, and opposed the sale of Saab to Chinese automakers because several Saab models license technology from GM vehicles. The 9-4X crossover is even built at a GM factory in Mexico — although production of the 9-4X has been offline for some time due to the Swedish automaker’s financial troubles.
Although officials from Saab, the company’s court-appointed administrator, and the Swedish ambassador met with GM officials in Detroit to work out a deal, the American automaker was still unhappy with the proposed terms. “Nothing in the proposal changes GM’s position. We are unable to support the transaction,” GM spokesman Jim Cain told The Detroit News.
Today, the court-appointed administrator of Saab’s voluntary reorganization, Guy Lofalk, filed to terminate the reorganization process. Similar to American Chapter 11 bankruptcy protection, Saab’s voluntary reorganization was designed to protect the company from its creditors while the automaker arranged a deal with Chinese automakers. That deal would have provided an influx of cash so that Saab could pay suppliers and employees.
On Monday, Saab confirmed that it is working with Chinese company Zhejiang Youngman Lotus Automobile Co. Ltd and an unnamed Chinese bank to help secure additional financing. Saab now has about six days to submit a proposal to the Swedish courts requesting that the reorganization process be continued. If that doesn’t happen, and Saab runs out of money before it can be rescued by the Chinese, we could see the storied Swedish automaker go bankrupt.
Sources: Saab, The Detroit News