Automaker Saab files for bankruptcy
After six decades of building cars renowned for their teardrop designs and quirky features, cash-strapped Saab Automobile gave up its desperate struggle for a lifeline Monday and filed for bankruptcy.
Saab chief executive Victor Muller said "the last nail in the coffin" was previous owner General Motors Co.'s rejection of a Chinese company's attempts to gain control of the ailing Swedish brand. Muller personally handed over the bankruptcy petition to a Swedish court, which approved it late Monday.
Though a theoretical chance remains for a new buyer to step in during the bankruptcy process, analysts said Saab's troubles underline how difficult it is for a small, niched carmaker to survive in today's competitive global market.
"I think it does kind of reflect the situation in the industry that scale is everything," said IHS Automotive analyst Ian Fletcher. "Everyone else has been snapped up," he said, while Saab was still "waiting to dance with someone and . . . didn't have the right partner."
Volvo Cars, Sweden's other carmaker, is presently ramping up production after China's Geely Holding Group bought it from Ford Motor Co. last year.
Muller, a Dutch entrepreneur, used his luxury sports carmaker Spyker Cars to buy Saab from GM in 2010 for $74 million in cash plus $326 million worth of preferred shares. He vowed to gradually increase production while restoring Saab's Swedish identity -- which critics said was diluted under GM ownership. But the company ran out of money just a year later.
As production stopped and salary payments were delayed, Muller fended off bankruptcy by selling Saab'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., pulled out after the last proposal for a solution was rejected by GM over the weekend.
