Proposed Saab Takeover Nixes Technology, Manufacturing Agreements, GM Says

GM, which still holds a stake in Saab, sees the deal as a risk to its market-leading presence in China.

James M. Amend, Senior Editor

November 7, 2011

2 Min Read
Proposed Saab Takeover Nixes Technology, Manufacturing Agreements, GM Says


General Motors likely stands in the way of a potential takeover of its former unit Saab Automobile by a pair of Chinese investors, saying it would not honor current technology licenses or vehicle-assembly agreements with the Swedish auto maker if the deal goes through.

“Although General Motors is open to the continued supply of powertrains and other components to Saab under appropriate terms and conditions, GM will not agree to the continuation of the existing technology licenses or the continued supply of 9-4X vehicles to Saab following the proposed change in ownership as it would not be in the best interests of GM shareholders,” GM says today in a statement.

Chinese dealership giant Pang Da and local auto maker Zhejiang Youngman Lotus Automobile reached an agreement last week with Saab’s parent, Swedish Automobile, to buy Saab in a deal valued at E100 million ($141.4 million).

The deal appeared to again save Saab from the brink of insolvency and would include big expansion plans in the Chinese market.

But GM, which still holds a stake in Saab, sees the deal as a risk to its market-leading presence in China.

“China, or anywhere else,” GM spokesman Jim Cain tells WardsAuto, “our agreement was with Saab, not some future owner.”

Michele Tinson, spokeswoman for Saab’s U.S. operations, tells WardsAuto in an e-mail, “We continue to negotiate the terms of the agreement with all parties involved.

It is premature to comment on a conclusion at this time. We remain optimistic on Saab’s future.”

GM would stem flow of 9-4X under proposed Saab takeover.

When GM divested Saab two years ago to Dutch millionaire Victor Muller, the Detroit auto maker agreed to maintain the flow of proprietary technology.

GM also said it would produce the new Saab 9-4X, developed jointly by the two auto makers before the split, on a contract basis.

Without GM powertrains for its current line of cars, Saab would not be able to restart its assembly plant in Trollhattan, Sweden, which has been idle for several months.

Cutting off builds of the 9-4X, a major product rollout for Saab in North America, would be another big blow.

GM was set to liquidate Saab before Muller stepped in with his $400 million offer. Taking Saab independent, however, has been financially difficult for Muller.

Delayed payments to suppliers and employees prompted Trollhattan’s shutdown and led to reorganization, the second in two years.

Muller originally landed Pang Da and Youngman as investors, offering the Chinese partners half of the company for E245 million ($350.6 million). But Saab’s mounting financial crisis forced last week’s all-out sale of the auto maker.

The auto maker employs about 3,700 people in Sweden. Saab markets and sells cars in about 60 countries.

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