GM decided to sever its ties to Saab

Article by Christian A., on November 8, 2011

The risks related to the pending sale of Saab to Chinese owners have prompted General Motors to cut ties to Saab and to withdraw from its pledge to supply it with vehicle parts and the 9-4X model. GM spokesman Jim Cain said that even if GM is open to the idea of continuing to supply powertrains and other parts to Saab, it won’t agree to the continuation of the current technology licenses or the continued supply of 9-4X vehicles to Saab.

Cain explained that it won’t be in the best interests of GM shareholders if the ownership changes.

With this statement, it’s apparent that GM is hardening its opposition to the proposed rescue plan for Saab. It also may indicate that the brand is more likely to survive. Last Friday, GM said that it will be hard to support a Saab sale if it damaged GM's competitiveness in China and other major markets.

A deal has been entered by China's Pang Da Automobile Trade Co (601258.SS) and Zhejiang Youngman Lotus Automobile to purchase Saab from its existing Dutch owner, Swedish Automobile (SWAN.AS).

This could very well be a rescue plan for Saab, the Swedish auto brand that was formerly owned by GM. The approval of GM is needed for the Pang Da and Youngman takeover since it controls preference shares in Saab and is a major supplier of vehicle components.

Saab Automobile CEO Victor Muller said that the deal for Saab will be revised after objections from GM. In the past year, Saab has faced many crises. It hasn’t built a car in months. Last September, Saab was granted court protection from its creditors in Sweden. This is the second time that Saab was given protection from creditors in two years. [source: EconomicTimes]

Topics: gm, saab

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