December 19, 2011 by staff
Saab Bankruptcy, Saab Automobile filed for bankruptcy on Monday, giving up a desperate struggle to stay in business after previous owner General Motors Co. blocked takeover attempts by Chinese investors.
Saab CEO Victor Muller personally handed in the bankruptcy application to a court in southwestern Sweden, ending his two-year effort to revive the carmaker that over more than six decades has become known for its rounded sedans and quirky design features.
The Dutch entrepreneur told reporters he had to pull the plug after GM, which still owns some technology licenses for Saab, rejected a last-ditch financing plan involving a Chinese company.
“That basically was the last nail in the coffin of this beautiful company,” Muller said in webcast news conference at the Saab plant in Trollhattan, southwestern Sweden.
The Vanersborg District Court was expected to approve the application later Monday.
“This is the most unwelcome Christmas gift I could have imagined,” said Fredrik Almqvist, 36, who has worked at Saab’s assembly line for nearly 17 years.
While experts say the company is likely to be chopped up and sold in parts, local officials in the town of Trollhattan, where Saab employs more than 3,000 people, were holding out hope that a new buyer would emerge to salvage the brand.
“Our absolute hope is that the bankruptcy administrator will aim for a solution where the company is sold in its entirety,” Trollhattan Mayor Paul Akerlund said in a statement.
Muller used his luxury sports car maker Spyker Cars to buy Saab from GM in 2010, promising to restore its Swedish identity, but the company ran out of money just a year later.
Even as production stopped and salary payments were delayed, Muller fended off bankruptcy by selling the company’s real estate and lining up financing deals with investors in Russia and China. He bought time by placing the company in a reconstruction process under bankruptcy protection.
But the deals fell through, blocked by regulators or by GM, which was concerned that its technology would end up in the hands of Chinese competitors.
The final Chinese suitor, Zhejiang Youngman Lotus Automobile Co., said it pulled out after the last proposal for a solution was rejected by GM over the weekend.
“We were supporting them to the last moment, even up to 1 a.m. this morning we were discussing possible solutions by telephone, but due to GM’s position, in the end Sweden’s Saab filed for bankruptcy this morning,” said Rachel Pang, an executive director of a subsidiary company of Youngman and daughter of Youngman’s founder, Pang Qingnian.
Muller blamed the former administrator of Saab’s reconstruction, Guy Lofalk, for the collapse of the talks, saying Lofalk had led the Chinese investors to believe they could become sole owners of the company. Muller said he knew that was impossible given GM’s concerns about licenses.
“Until this problem arose the relationship with GM was excellent,” Muller said.
Calls to Lofalk’s office were not answered Monday.
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