Stockholm: Saab Automobile ABfiled for bankruptcy, bringing the Swedish car maker to the brink of shutting for good after failing to find investors to rescue the 74-year-old company.
Saab, based in the southwestern town of Trollhaettan, submitted its application with Vaenersborg District Court, and will hold a press conference as soon as the judge issues a ruling, Victor Muller, chief executive officer of parent company Swedish Automobile NV, said on Monday in a text message.
Saab, which General Motors Co. sold to Swedish Automobile in February 2010, won protection from creditors in September and has been seeking funding since then. Guy Lofalk, Saab’s court-appointed administrator, applied on 7 December to end the reorganization, saying the carmaker was out of money and had no realistic hope of gaining financing soon.
Workers monitor a production line at the Saab automobile factory in Trollhattan, Sweden. Photo: Bloomberg
“It feels really tough,” Mats Faegerhag, Saab’s product development chief, said on Monday in a phone interview. “We’ve been fighting so hard for so long. Saab is part of Sweden’s industrial history, and it’d be a big blow not just to us if we go under.”
Swedish Automobile plunged as much as 67% to 7 cents and was down 62% at 11.42am in Amsterdam. Shares in the Zeewolde, Netherlands-based company, which makes the $235,000 C8 Aileron supercar, have dropped 98% this year, valuing the company at €2.9 million ($3.8 million).
Saab began as Svenska Aeroplan Aktiebolaget in 1937, making airplanes, and started producing cars in 1947. Saab Auto split from the aerospace operations, now known as Saab AB, in the 1990s, with GM gaining a 50% stake in 1990 and full control in 2000. The US car maker put the brand on the block in 2009 as one of four divisions marked for sale or shutdown as GM worked to restore profit.
Swedish Automobile, which changed its name from Spyker Cars NV in June, was planning for Saab to sell 120,000 vehicles and become profitable by 2012. Saab’s deliveries, which peaked at 133,000 cars in 2006, never met the parent company’s intermediate goals. Sales totalled 31,696 cars in 2010, compared with a target of 50,000 to 60,000.
Saab Automobile was in talks with Jinhua, China-based Zhejiang Youngman Lotus Automobile and a Chinese bank to secure about €600 million in loans, Muller said on 7 December.
GM, which retains a say in Saab’s future because of the companies’ technology ties, said 17 December that it couldn’t support proposed alternatives as they are not meaningfully different from previous plans the Detroit-based car maker had rejected on the grounds they would hurt the US company.
Youngman, Chinese car dealer Pang Da Automobile Trade Co. and Russian banker Vladimir Antonov, a former Spyker shareholder, have all been failed suitors for a stake in Saab as Muller tried to fund the unit’s turnaround since its purchase.
“There is still a possibility for Saab to be rescued in one piece if a viable investor steps in,” production chief Faegerhag said. “But that would have to happen quick, in a few weeks, because our employees will be looking for other jobs.”
Saab’s collapse may also hurt competitor Volvo Car Corp., the Swedish auto maker owned by Zhejiang Geely Holding Group Co., as suppliers to both manufacturers will be hampered and may go out of business as well, Faegerhag said.