It looks like Saab is finally going to shut down. Saab filed for bankruptcy on Monday after General Motors vetoed a plan involving Chinese automaker Zhejiang Youngman Lotus Automobile.
Saab was in discussions with Youngman and a Chinese bank to secure about $782 million in loans, Swedish Automobile CEO Victor Muller said on Dec. 7. GM said Dec. 17 that it couldn’t support proposed alternatives for Saab because the options “are not meaningfully different” from previous suggestions GM had rejected on the grounds they would hurt the U.S. company.
Saab 9-3 Convertible
Saab’s workforce totals about 3,600 employees, including 3,400 in Trollhattan, Sweden. Saab’s vehicle sales, which reached 133,000 cars in 2006, have plunged in the last few years. The company sold 31,696 cars in 2010, missing a target of 50,000 to 60,000 vehicles.
Saab, which GM sold to Swedish Automobile in February 2010, won protection from creditors in September and has been seeking an investor since then. Saab’s court-appointed administrator, applied on Dec. 7 to end the reorganization, saying the carmaker was out of money and had no realistic hope of gaining financing soon.
General Motors, who as a major supplier to Saab had veto power over any financing plan. And General Motors finally realized what I had wrote about two years ago, that China is not going to allow north American car companies to be significant players in the Chinese auto market. In my view, China has seen how significant the automobile industry was in the development and success of the American economy in the 20th century. China also saw how the industrial capability of the American automotive industry was very useful during World War II. You know the old saying: “What’s good for GM, is good for America.” As a result, China has decided to have Chinese manufacturing companies sell cars to the Chinese – not imported cars Ford, Chrysler, or GM. The potential of the Chinese market for north American manufacturers is just a myth. The Chinese company, with backing from the government wanted to buy Saab to obtain the technology to build cars in China. And GM vetoed the deal, so the Chinese would not get that technology. As a result, Saab is belly up.