End of road for Saab, another victim of global crash

Published on Friday 18 December 2009 22:09

ONE of the most famous car- makers in the world, Saab, is set to disappear after a deal to save the Swedish company collapsed.

US giant General Motors said yesterday it would shut down Saab after talks to sell the brand to a Dutch car-maker collapsed, marking the third time this year that a deal by GM to sell an unwanted brand has fallen through.

Staff at UK dealerships selling Saab cars were given the grim news yesterday. Bosses at GM said they would wind down Saab over the next two months.

"Despite the best efforts of all involved, it has become very clear that the due diligence required to complete this complex transaction could not be executed in a reasonable time," said Nick Reilly, the GM Europe president.

GM first sought a buyer for Saab in January as part of its restructuring, which included plans to sell off its UK Vauxhall and German Opel brands.

The car-maker said Saab would honour warranties while providing service and spare parts to owners around the world.

About 80 staff work for Saab at GM's UK head office, and there are an estimated 88 dealerships in this country. Saab employs about 3,400 people worldwide, most of whom work at its main plant in Trollhattan, Sweden.

It also has a parts distribution and design centre in separate locations in Sweden and an engine plant in Finland. The brand has 1,100 dealers worldwide.

Ray Ciccolo, a Saab dealer in the UK and US since 1957, said: "It's devastating. It was a very unique brand."

The announcement marks the death of a brand with a small yet loyal following. To enthusiasts, the Swedish company became appreciated for quirks like placing the ignition lock between the front seats rather than on the steering column. It was the first to offer heated seating in 1971.

GM said it had a small window of time to complete the deal and issues arose during the sale talks with Spyker Cars that could not be resolved.

Stefan Lofven, the head of the Swedish industrial workers' union IF Metall, said the news was a shock. He added: "I had believed this possibility (Spyker] could work, even though there had been some speculation circulating about its viability."

Hakan Johansson, a Saab worker at the Trollhattan plant, told Swedish Radio that the announcement "is not a good Christmas gift".

GM vice-president John Smith said representatives from GM, Spyker and the Swedish government were still in discussions yesterday morning when talks fell apart. He added: "We've been trying to restart, if you will, an investment process without a great deal of time. Like everybody, we would have preferred a different outcome, and we all worked very hard for that different outcome and we've come up short."

A spokesman for Spyker said the sale proved too complicated to complete quickly.

He added: "We worked 24/7 for three weeks, but the complexity of the transaction, in combination with the strict deadline, simply did not allow us to complete it."

GM bought a 50 per cent stake and management control of Saab for $600 million (372m) after it split from Swedish truck maker Scania in 1989. GM then bought full ownership in 2000 for $125m (77m). But even then, Saab remained closely associated with Sweden and its history of making safe, reliable cars.

GM never made money on the acquisition, and industry analysts complained that, under GM, Saab lost its uniqueness in the crowded luxury segment.

LOST ICONS

THE Saab brand is the latest in a long line of iconic motoring marques to disappear from car showrooms.

The Hillman Imp disappeared despite more than 22 million being spent in the early 1960s on building factory premises in Scotland to produce the first "baby car".

The cars, designed by Michael Parkes and Tim Fry, caused a sensation and were made in the Linwood factory near Paisley.

News of the first prototype, the Hillman 850, leaked out in a newspaper in Milan.

Around 150,000 were manufactured each year with around half being exported oversees. They were produced for more than 12 years, until 1976.

Other variations which were discontinued around this time included the Caledonian, Imp de Luxe, the Imp Super and Sunbeam Sport, Chamois, Chamois Coupe, Californian, Hillman Husky and Stiletto.

&#149 Morris Oxford, Marinas and Minis. British Leyland was formed in 1968 as the British Leyland Motor Corporation – meaning many British car-makers were consolidated into one corporation.

However, the mergers led to duplication and a failure to cement the brand name "British Leyland" in consumers' minds.

In the coming years, a depressing economic backdrop, including the 1973 oil crisis and three-day weeks, led to a decline in manufacturing and the eventual discontinuation of iconic brands such as the Morris, Triumph Marina and Mini.