Swedish luxury carmaker Koenigsegg said on Tuesday it was giving up its bid to buy Saab Automobile from its US parent General Motors (GM) because of costly delays, plunging Saab’s future into doubt.
“We regret that after six months of intense 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,” the head of the company, Christian von Koenigsegg, said in a statement.
Koenigsegg announced in September that it had teamed up with Beijing Automotive Industry Holding Co Ltd (BAIC, 北京汽車工業) to buy Saab from GM.
PHOTO: REUTERS
But it still needed a 400 million euro (US$600 million) loan from the European Investment Bank (EIB) and wanted the Swedish government to act as a guarantor.
Swedish media have suggested that Saab was running short of money to continue its day-to-day operations, and doubts have flourished among experts about whether Koenigsegg would have the 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 1 million euros each.
Saab, by contrast, employs 3,400 people in Sweden alone and sold just over 93,000 cars worldwide last year.
Koenigsegg initially announced its plan to acquire Saab in June, and the deal was originally expected to be concluded by the end of last month but has been repeatedly delayed.
The Swedish government, which has refused to take a stake in the struggling carmaker, as of Tuesday had still not decided whether to act as guarantor for the EIB loan.
“The time factor has from the beginning been critical for our strategy to breathe new life into the company,” von Koenigsegg said in the statement. “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.”
In an interview with Swedish news agency TT, he stopped short of blaming the government for the delay.
“I don’t want to point the finger. It’s an incredibly complicated process,” he said.
“We had a business plan, but when Saab is bleeding and can’t grow as long as we’re waiting [for a decision], the economic implications and outcome of our business plan become too unclear,” he said.
GM’s chief executive Fritz Henderson said the company was “disappointed” by Koenigsegg’s decision.
“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,” he said.
Saab spokesman Eric Geers said Koenigsegg’s decision came as “a surprise.”
“We’ll see what happens now. It’s up to GM,” Geers said.
The head of the influential IF Metall union at Saab, Paul Aakerlund, was dismayed by the news.
“This is a heavy time for all of us,” he said.
Under GM’s stewardship spanning almost two decades, Saab rarely posted a profit and last year lost 3 billion kronor (US$341 million at the time).
While some 3,400 people are employed at Saab’s factory in Trollhaettan, a town of 55,000 in southwestern Sweden, another 12,000 work for suppliers or subcontractors that directly rely on the automaker for their income.
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