GM’s final no to Saab’s Restructuring Plan Kills Saab, Pangda pulls out, GM to guarantee warranties on GM era cars

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Saab’s life as a car maker was finally extinguished on Monday afternoon in a Swedish courtroom where the judge presiding over the case removed bankruptcy protection for the Swedish car maker which ended with Saab’s creditors forcing the company into bankruptcy. Saab is likely to be liquidated in early 2012 with the majority of its assets that do not belong to GM being sold in foreclosure. Saab’s run as a car company came after World War Two and largely ended in September 2010 when GM handed the car company over to Spyker, since then the company ran into liquidity issues where it was unable to pay its external bills or its workers salaries in time.

Saab’s energetic leader, Victor Muller, raced around the world looking for a buyer or a partner for the stricken company, he found in Hawtai but that deal quickly fell apart after a rapid shotgun marriage, later Saab would find Pangda who offered to buy Saab’s products if they could make them, then Saab teamed with Chinese bus maker Youngman to see if they could build cars in China. Youngman did have the car making ability, as it produces its own Proton range of vehicles badged up as Lotus Cars, but Youngman likely lacked the capital and government connections in China to pull off a partnership so it teamed with Pangda as an awesome trio, Youngman would make cars, Pangda would sell them.

Now that Saab is officially bankrupt the road looks unclear, creditors in terms of suppliers will likely be hit the hardest especially at a difficult time of year, Saab’s workers have likely seen the writing on the wall for a number of months. Youngman are likely to be interested in taking on Saab’s power train and chassis development center, although much of Saab’s IP belongs to GM, Saab had managed to work on its own Phoenix Platform that will be of extreme interest to Chinese manufacturers that are eager to get their foot in the car making door with an advanced platform.

Pangda has now officially pulled out of the deal in a statement made to the Shanghai Securities Exchange earlier today, the Chinese car dealer group was rumored to have pulled out earlier this month, however this mornings statement clearly states that they have pulled out of the Saab purchase, Pangda are also working hard to recover the 45 million Euros that they paid to Saab to deliver 9-3′s, 9-5′s and SUV’s to China. This money was likely used in a Letter of Credit and should be easily retrieved by Pangda.

GM’s official stance was that they could not support the restructuring of Saab which would have given Youngman access to the same IP that its partners in Shanghai Auto Industry Corporation currently use, a later deal shown to GM which apparently only gave Youngman access to a joint R&D facility which would have been located in the Netherlands however this arrangement was also not acceptable to GM and thus Saab was forced into bankruptcy.

GM have also guaranteed the warranties of any cars made under the GM era, which ended in September 2010. Saab’s were sold in small number in China and were largely confined to the Beijing and Shanghai areas, however Saab’s did stand out on Shanghai’s crowded roads as an alternative to Audi’s, BMW’s and Mercedes vehicles.

Although Saab has gone to the great auto maker heaven in the sky and is probably currently alongside Pontiac, Rover, and Saturn, the real argument over who gets what of Saab is currently just beginning. BAIC received the last generation Saab 9-3 and 9-5 platforms and IPR as well as powertrains in 2010 which gave Saab 180 million in cash but this was not enough to keep the company going for long, BAIC later also bought out key suppliers to Saab and will this month put its 9-3 based car, the C70, into production in China. Youngman are likely to be keen to take over certain assets, but other Chinese companies have been busy in the background as well by hiring political lobbying firms in Sweden to show that they are the rightful caretakers of Saab’s IPR.