GM seals Saab Deal with Spyker at last?

"Spyker is very close to finalising this deal," Genii/Ecclestone coordinator Lars Carlstrom stated today.

The deal could involve as many as a hundred separate agreements given how much Saab was integrated into GM.

It's an odd coupling. Spyker employs around 130 workers and makes hand-built sports cars in small numbers.

Saab, meanwhile, employs around 3,500 people in Sweden and sold around 93,000 cars last year. It has been on a downward trajectory under GM ownership, with sales sliding and the marque tarnished by bland GM platforms which have knocked the shine off a once proud, innovative and sporty brand.

Sadly, the GM-Saab operation highlighted all that was wrong with platform sharing. Indeed, last year it sold fewer cars than MG Rover did in its last year of operation, such has been the slide in Saab sales.

Spyker will no doubt want to transform Saab into a stand-alone and profitable firm; that will mean having to shift the brand up-market and repositioning Saab as a niche brand. That all depends on the quality of the products of course.

Saab and Koenigsegg previously reckoned they could break even at 100,000 units by 2012. Such a figure may be doable in the short run as Saab - unlike MG Rover back in 2000 - has a range of new models about to be launched which will buy it some time.

Yet longer term it needs to develop new models and it's not clear how Spyker will be able to do this on limited volumes given the R&D costs involved in new model development unless Saab shifts upmarket considerably and/or it finds a partner to develop models jointly.

This is my own hunch but - as suggested previously - given the GM links here, Saab and Shanghai Auto (SAIC) could potentially team up - with possible benefits in developing joint Saab and MG models. Indeed, as the AR-Online website reported last summer, it has been rumoured that Shanghai is giving 'serious consideration' to adopting GM's Epsilon II platform for the MG 7/ Roewe 750 replacements.

This platform underpins both the Opel/Vauxhall Insignia and Shanghai's Chinese variant of the Buick Regal. And, the new Saab 9-5 is based on a long wheelbase variant of Epsilon II, which may be what Shanghai is now also looking at.

Unlike with the previous failed bid, the Swedish government has already lined up a €400 million EIB loan for Saab payable at normal rates for seven years. The government has repeatedly emphasised that it won't buy a stake in Saab or help it in any way other than possibly providing guarantees for the EIB loan.

Whilst the deal may offer short-term hope, as we saw with MG Rover, this is no guarantee of long-term survival, and the firm faces many of the same challenges that faced a newly independent MG Rover back in 2000.

Saab faces a rough road ahead. But the key thing is that a deal will avert immediate closure and allow a more structured downsizing of the firm, giving everyone time to adjust. Whether the firm survives longer-term, that in itself is a key benefit for the local economy, as we saw with the MG Rover closure.

Saab Timeline
1937 - Svenska Aeroplan Aktiebolaget (SAAB) founded in 1937 in Trollhattan, Sweden, to produce high-performance aircraft.
1946 - Car production started.
1968 - Saab 99 launched.
1969 - Saab AB and truck manufacturer Scania-Vabis AB are merged to become Saab Scania AB.
1978 - Saab 900 launched.
1990 - Saab's car division is restructured into an independent company, Saab Automobile AB, with headquarters in Sweden. GM takes a 50% stake alongside AB.
2000 - GM takes full control, buying the other 50% stake.
January 2009 - GM has been in talks to sell its struggling Saab unit, GM Europe chief Carl-Peter Forster says. The Swedish government says it will not take a stake in Saab or offer aid.
February 2009 - Saab granted bankruptcy protection from creditors while it tries to find a new partner and raise funds. Saab estimates 2008 losses at around $340 million, expected similar losses in 2009, given falling demand, old products, overcapacity and high costs.
March 12 - Saab axes 750 jobs.
June 2009 - GM Europe announces a preliminary deal for Koenigsegg to buy Saab.
June 2009 - The bankruptcy court OKs a 75 percent write-down of Saab's $1.28 billion debt (owed mainly to GM).
August 2009 - Koenigsegg seals a deal with GM to buy Saab, pending Swedish government support for an EIB loan application, but the deal falls through.
December 2009 - deadline for sale passes and GM announces a wind-down. Swedish government appeals for more time.
January 2010 - GM extends deadline and in talks with Spyker and Genii Capital. Spyker expected to seal deal at last