GM Denies Problems In Finding Saab Buyers
09 Gennaio 2009 - 3:46AM
Dow Jones News
DETROIT (AFP)--General Motors Corp. (GM) on Thursday dismissed
reports that it hasn't found any interested buyers for Saab AB
(SAAB-B.SK), as it has quietly shopped around the Swedish
brand.
"It's still early in the process," one GM official familiar with
the proceedings said. "It's going to take some time."
As recently as last summer, GM chairman Richard Wagoner said the
company intended to keep Saab in the GM family and retool its North
American product line.
But as GM's financial crisis deepened when sales collapsed this
fall, GM put Saab up for review as part of the restructuring plan
it presented to Congress in early December in order to obtain $13.4
billion in loans.
GM Vice Chairman Bob Lutz recently told the trade publication
Automotive News that the term strategic review is "code for 'we
realize they're not working and something needs to be done.'"
The plans presented to Congress indicated GM was unwilling to
make additional investment in Saab products.
GM put its Hummer brand up for sale back in June and so far has
failed to finalize a deal, although the hulking brand has attracted
some interest from potential buyers.
Paul McCarthy, a consultant with PricewaterhouseCoopers in
Detroit, noted that merger and acquisition activity in the
automotive sector has declined since the mid-2008.
"Everything is for sale but there haven't been many deals," said
McCarthy, citing tight credit markets and uncertainty over the
ultimate fate of GM and Chrysler LLC as the key reasons for decline
in automotive sector deals.
As part of the survival plan, GM also said it will trim its
Pontiac line and review the future of Saturn.
GM bought half of Saab in 1989 and the rest of the company a
decade later. About 75% of the Swedish brand's sales are in
Europe.
Saab sold 21,368 vehicles in the U.S. in 2007, down 34.7% from
2007, while the overall market dropped 18%.
The current exchange rate between the euro and the dollar means
that nearly every Swedish-built Saab sold in the U.S. is sold at a
loss to GM, according to Automotive News.
The Swedish government has announced plans to provide up to
$3.19 billion in credit guarantees and emergency loans to Saab and
Volvo AB (VOLVY), which Ford Motor Co. (F) put up for sale last
month in a bid to raise additional funds.
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