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Friday, February 20, 2009
General Motors' loss-making Swedish subsidiary Saab filed for bankruptcy on Friday after it was cut loose by the American company as part of its deep restructuring plan. Under the Swedish law, the reorganization is a self-managed process headed by an independent administrator appointed by the court who will work closely with Saab's management team to present a proposal to creditors within three weeks of the filing. During this period, Saab said that it will continue to operate "as usual and in accordance with the formal reorganization process, with the Government providing some support during this period".
"We explored and will continue to explore all available options for funding and/or selling Saab and it was determined a formal reorganization would be the best way to create a truly independent entity that is ready for investment," said Jan Ake Jonsson, Managing Director for Saab Automobile.
"With an all new 9-5, 9-3X and 9-4X all ready for launch over the next year and a half, Saab has an excellent foundation for strong growth, assuming we can get the funding to complete engineering, tooling and manage launch costs. Reorganization will give us the time and means that help get these products to market while minimizing the liquidity impact of Saab on GM," Jonsson added.
The problem is however that GM will completely cut Saab's funding meaning that unless the Swedes manage to secure some serious government cash, the company's survival is at question.
