'Koenigsegg backs out of Saab deal'

Tabnabs

A group headed by Swedish sports car maker Koenigsegg has broken off negotiations over the purchase of Saab Automobile, the prospective buyer said in a statement.

"We regret that, after six months of intensive and goal-oriented work, we have come to the painful and difficult conclusion that we are not going to be able to carry out the acquisition of Saab Automobile," said company chief Christian von Koenigsegg.

Koenigsegg announced in September that it had teamed up with Beijing Automotive Industry Holding Co Ltd (BAIC) to buy Saab from GM.

But it still needed a a €400 million ($600 million) loan from the European Investment Bank and wanted the Swedish government to act as a guarantor.

Swedish media have recently suggested that Saab was short of money to continue its day-to-day operations, and doubts have flourished among experts and commentators about whether Koenigsegg would have the necessary expertise to run a major car company.

Koenigsegg Group, founded in 1994, has just 45 employees and produces 18 high-end sports cars a year at more than a million euros ($1.4 million) each.

The Swedish government had as of Tuesday still not decided whether to act as guarantor.

"The time factor has from the beginning been critical for our strategy to breathe new life into the company. Unfortunately, delays in completing the deal have led to risks and uncertainties that prevent us from successfully carrying out our business plan for Saab Automobile," Christian von Koenigsegg said.

General Motors said on Tuesday it was "disappointed" that had terminated a deal to buy its Saab brand.

"We're obviously very disappointed with the decision to pull out of the Saab purchase," GM President and CEO Fritz Henderson said in a statement.

"Many have worked tirelessly over the past several months to create a sustainable plan for the future of Saab by selling the brand and its manufacturing interests to Koenigsegg Group AB," Henderson said.

"Given the sudden change in direction, we will take the next several days to assess the situation and will advise on the next steps next week."

GM said the proposed sale of its Swedish mark was "terminated at the discretion of the buyer."

TT/AFP/The Local (news@thelocal.se)
source

It's a shame, it would have potentially been a very interesting and individual car manufacturer!

unkel

Is von Koenigsegg playing hardball to get the Swedish government to cough up or guarantee, or has he pulled out for good?

Tabnabs

Sounds like Koenigsegg wanted to bit off more than they could chew?

unkel

Dunno. In an interview linked here a few months ago, he sounded very realistic.

galwaytt

....isn't it amazing: Governments, the world over, cannot react to any kind of emergency, with any kind of urgency. Irrespective of whether they'd support the deal or not, to spend this long, and still not give an indication of whether they would/not, is just endemic of governments, generally.

Sounds like our shower, tbh.

And, if SAAB does go under, the Swedish government will be paying 1000's of employee's their (v.high, Scandanavian) social welfare anyway........it doesn't take a genius to figure out it'd be cheaper to pay the same people to make the cars - at least then they'd have some sort of income to offset the cost !

Marlow

I don't think von Koenigsegg is the problem. He's a business man that knows the way forward and has proven so often enough.

It's purely the swedish Government and swedish mentality to have meetings until the problem disappears (swedish way of dealing with problems) instead of taking a decision.

Sad. Might give the government a kick in the balls to make a decision, might be too late.

/M

mumblin deaf ro

www.saabsunited.com has the full details.

The Swedish govt has been reluctant to intervene from day one. Hard to read through the lines on this but my gut feeling is that GM were much keener to get rid of Saab in the midst of a crisis but having been dragging their feet since a solution came on the table. Perhaps with the new 9-5 on the way they reckon they could claw some money back on their investment. Bad news for Saab.

VolvoMan

galwaytt wrote: »

And, if SAAB does go under, the Swedish government will be paying 1000's of employee's their (v.high, Scandanavian) social welfare anyway........it doesn't take a genius to figure out it'd be cheaper to pay the same people to make the cars - at least then they'd have some sort of income to offset the cost !

It wouldn't surprise me if they didn't to be honest. Apparently the government they have in there at the moment is very similar to the Thatcherite one of 1980's Britain, except with a tree hugger in charge. They don't give a toss about industry and are resting on their laurels while they see one of their biggest companies be swallowed up by Communists.