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Saab is officially bankrupt
Saab’s owners signed it into bankruptcy this morning. The company has been mortally wounded since April, when it ran out of cash, couldn’t pay its suppliers and had to stop building cars. After eight months of extraordinary and desperate negotiations over potential rescues, last month it looked like Saab was safe. A sale was agreed with Chinese manufacturer Youngman and distributor Pang Da. But that deal has now been called off, triggering the bankruptcy.
The stumbling block is General Motors. It has forbidden its designs to be used by the Chinese, so they have pulled out of the deal.
A brief explanation: GM once owned Saab, but put it up for sale in late-2009 when GM itself was in trouble. By that time Saab had designed the new 9-5 and 9-4X using mostly GM parts in their underbodies, suspensions, powertrains, and electronics. In early 2010. Saab was bought from GM by Victor Muller’s investment company, which also owned tiny supercar maker Spyker.
But when Muller agreed a sale to the Chinese, GM decided it won’t let its designs go to China. It thinks copyright protection is too weak in China and its engineering would be pirated. Which is terrifying for GM, because it makes so many other cars using the same systems (the Insignia, Astra, new Zafira and their US and – crucially – Chinese equivalents, with many more to come).
There seems no way back for Saab now. Saab had been up for sale for months. No western, Japanese or Korean car company wanted to buy. An American investment brokerage claimed to be confident of finding money, but failed. Vladimir Antonov, a Russian banker and owner of Portsmouth FC wanted to invest, but he was arrested on 24 November over dealings at the bank he owns. And now the Chinese money has been nixed.
With bankruptcy, Muller has said he won’t get any money out of Saab. Creditors will scrap over the remaining value left from the company’s tools, equipment and premises. They won’t get much. The workers will have a very thin Christmas.
So what happens if you own a Saab? You’ll be more or less OK. Think what happened to MG-Rover. The company went away, but there were and are still cars on the road. So it is still worthwhile business for independent suppliers to make and sell parts, and independent garages to do the servicing. The worst thing is the secondhand value of your car will drop a bit, although with the furore surrounding Saab’s future that has been factored in for a while now.