GM to scupper Saab China deal
American car giant, General Motors CO, says it will sever its ties to Saab and its committment to supply it with auto components, technology and licenses to sell its 9-3, 9-5 and 9-4x models if its deal with two Chinese companies goes ahead. GM says it does not want its intellectual property to fall into the hands of competitors in China. The Chief Executive of Saab's owner, Swedish Automobile, Viktor Muller, says "it's back to the drawing board."
GM retained preference shares in Saab after selling the Swedish brand to Swedish Automobile (previously known as Spyker) for $400 million, giving GM a final say in any sale of Saab. It still supplies Saab with the majority of its vehicle components and technology.
"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 spokesman Jim Cain said in an e-mail statement picked up by AFP News.
GM is concerned about its competitive position in the Chinese market, now the largest in the world.
The statement hits the proposed rescue plan for Saab and affects its chances of survival.
"Now it's back to the drawing board," said Saab's Chief Executiver Viktor Muller to Aftonbladet. Muller said that discussions with the prospective Chinese owners would take place on Tuesday.
GM spokesperson Jim Cain later told the TT news agency that the decision was definitive.
"This was no easy decision for us to take. And it is definitive."
Cain told TT that GM did not want its technology to fall into the hands of competitors.
The Chinese buy-out needs approval from several third parties, GM, Chinese authorities, the European Investment Bank and the Swedish debt office.
Pang Da Automobile Trade Co and Zhejiang Youngman have agreed a deal to buy Saab from from its current Dutch owner, Swedish Automobile for $142 million.
According to Saab's reconstruction plan, 60 percent of the brand would be taken over by Youngman and 40 percent by Pang Da. Two new daughter companies would be formed in China - one for production and one for distribution.
Saab was given court protection from creditors in September.