Saab files for reorganization
02-20-09, 06:47 AM
#1
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Saab files for reorganization
Swedish car manufacturer Saab, a fully owned subsidiary of General Motors, announced Friday that it will "file for reorganization ... to create a fully independent business entity."
Under the Swedish court system, an independent administrator will be appointed to work closely with the Saab management team to formulate a reorganization proposal, which will be presented to creditors within three weeks of the filing.
Saab said 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.
"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."
General Motors said this week that it plans shed tens of thousands of employees, close factories, cut product lines and wants billions of dollars in government funding to stave off bankruptcy.
When all is said and done, GM said that by 2011 it could need a total of $30 billion, which includes the $13.4 billion in Treasury loans it has already received.
In the near term, GM will most certainly need $9.1 billion in additional loans and could require an additional $7.5 billion in the next two years if auto sales don't improve.
http://edition.cnn.com/2009/BUSINESS...l?eref=edition
Under the Swedish court system, an independent administrator will be appointed to work closely with the Saab management team to formulate a reorganization proposal, which will be presented to creditors within three weeks of the filing.
Saab said 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.
"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."
General Motors said this week that it plans shed tens of thousands of employees, close factories, cut product lines and wants billions of dollars in government funding to stave off bankruptcy.
When all is said and done, GM said that by 2011 it could need a total of $30 billion, which includes the $13.4 billion in Treasury loans it has already received.
In the near term, GM will most certainly need $9.1 billion in additional loans and could require an additional $7.5 billion in the next two years if auto sales don't improve.
http://edition.cnn.com/2009/BUSINESS...l?eref=edition
02-20-09, 06:55 AM
#3
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GM unit Saab files for protection from creditors
By KARL RITTER, Associated Press Writer Karl Ritter, Associated Press Writer – 19 mins ago
STOCKHOLM – General Motors Corp.'s Swedish-based subsidiary Saab went into bankruptcy protection Friday so the unit can be spun off or sold by its struggling U.S. parent, officials said.
The move comes after Sweden turned down GM's request for government help for Saab.
An application to reorganize the brand was filed at a district court in Vanersborg, in southwestern Sweden, Saab spokeswoman Margareta Hogstrom said. It was approved later Friday.
The Swedish government on Wednesday rejected a request from loss-making GM to inject money into the carmaker. GM, which is seeking help from the U.S. government to avoid bankruptcy at home, has been looking for buyers for Saab but said it needs more funding to spin off or sell the division.
"We explored and will continue to explore all available options for funding and/or selling Saab and it was determined a formal restructuring would be the best way to create a truly independent entity that is ready for investment," Saab's managing director, Jan Ake Jonsson, said in a statement.
The move would give Saab protection from creditors while it restructures in a process similar to a Chapter 11 bankruptcy in the U.S.
GM said in a statement that Saab would continue operating normally. Fearing that parts suppliers would stop shipping, Detroit-based GM said it would make sure they are paid.
"GM is fully committed to maintaining a viable and successful local and global supplier base during the Saab reorganization," Bo Andersson, GM group vice president for purchasing, said in a statement.
Saab said that pending court approval, the reorganization would take place over three months and would require independent funding. The automaker said it would seek funding "from both public and private sources."
However, government officials seemed to rule out financial assistance. "I'm not sure what they're referring to, because support in the form of money is not on the agenda," Industry Ministry spokesman Hakan Lind said.
Industry Minister Maud Olofsson told Swedish news agency TT it was "very hard to say what our role will be."
On Wednesday, Olofsson rejected GM's plea for state funding for Saab, saying it was up to the U.S. automaker to save the brand.
In its own restructuring plan, GM said Tuesday it would need up to $30 billion from the U.S. Treasury Department, up from a previous estimate of $18 billion and including $13.4 billion it has already received. It also said it would need to cut 47,000 jobs worldwide and close five more U.S. factories
GM said it needed about $6 billion in support from the governments of Canada, Germany, Britain, Sweden and Thailand to provide liquidity for its overseas operations in those countries.
The Detroit automaker said it had developed a proposal that would cap its financial support of Saab with the Trollhattan-based automaker's operations "effectively becoming an independent business entity" by Jan. 1, 2010.
Saab has around 4,500 workers in more than 50 countries. Its main markets include the U.S. Britain, Sweden, Germany, Italy, Australia, France, the Netherlands, and Norway, with most of its production located in Sweden.
With three new models ready for launch in the next 18 months — the 9-5, 9-3X and 9-4X — managing director Jonsson said Saab has "an excellent foundation" to grow, assuming it can get funding for engineering, tooling and launch costs.
"Reorganization will give us time and means that help these products to market while minimizing the liquidity impact of Saab on GM," Jonsson said.
But analysts questioned whether Saab could survive on its own since it is a small player in the battered global auto industry.
"It doesn't have the economies of scale or the deep pockets," said Stephen Pope, chief global markets strategist for Cantor Fitzgerald. "Perhaps they're just trying dress it up for buyers."
Originally an aircraft maker, Saab started manufacturing cars after World War II. General Motors bought a 50 percent stake and management control of Saab Automobile in 1989 and gained full ownership in 2000. The aircraft division remains a different company.
GM's other European brands are Opel in Germany and Vauxhall in Britain. GM also markets its Chevrolet brand in Europe.
German officials have indicated that they are willing to help keep open Opel plants, but are insisting that the company outline a long-term plan for the division first.
Economy Ministry spokesman Steffen Moritz said in Berlin Friday that the automaker is expected to produce that concept "by the end of next week."
By KARL RITTER, Associated Press Writer Karl Ritter, Associated Press Writer – 19 mins ago
STOCKHOLM – General Motors Corp.'s Swedish-based subsidiary Saab went into bankruptcy protection Friday so the unit can be spun off or sold by its struggling U.S. parent, officials said.
The move comes after Sweden turned down GM's request for government help for Saab.
An application to reorganize the brand was filed at a district court in Vanersborg, in southwestern Sweden, Saab spokeswoman Margareta Hogstrom said. It was approved later Friday.
The Swedish government on Wednesday rejected a request from loss-making GM to inject money into the carmaker. GM, which is seeking help from the U.S. government to avoid bankruptcy at home, has been looking for buyers for Saab but said it needs more funding to spin off or sell the division.
"We explored and will continue to explore all available options for funding and/or selling Saab and it was determined a formal restructuring would be the best way to create a truly independent entity that is ready for investment," Saab's managing director, Jan Ake Jonsson, said in a statement.
The move would give Saab protection from creditors while it restructures in a process similar to a Chapter 11 bankruptcy in the U.S.
GM said in a statement that Saab would continue operating normally. Fearing that parts suppliers would stop shipping, Detroit-based GM said it would make sure they are paid.
"GM is fully committed to maintaining a viable and successful local and global supplier base during the Saab reorganization," Bo Andersson, GM group vice president for purchasing, said in a statement.
Saab said that pending court approval, the reorganization would take place over three months and would require independent funding. The automaker said it would seek funding "from both public and private sources."
However, government officials seemed to rule out financial assistance. "I'm not sure what they're referring to, because support in the form of money is not on the agenda," Industry Ministry spokesman Hakan Lind said.
Industry Minister Maud Olofsson told Swedish news agency TT it was "very hard to say what our role will be."
On Wednesday, Olofsson rejected GM's plea for state funding for Saab, saying it was up to the U.S. automaker to save the brand.
In its own restructuring plan, GM said Tuesday it would need up to $30 billion from the U.S. Treasury Department, up from a previous estimate of $18 billion and including $13.4 billion it has already received. It also said it would need to cut 47,000 jobs worldwide and close five more U.S. factories
GM said it needed about $6 billion in support from the governments of Canada, Germany, Britain, Sweden and Thailand to provide liquidity for its overseas operations in those countries.
The Detroit automaker said it had developed a proposal that would cap its financial support of Saab with the Trollhattan-based automaker's operations "effectively becoming an independent business entity" by Jan. 1, 2010.
Saab has around 4,500 workers in more than 50 countries. Its main markets include the U.S. Britain, Sweden, Germany, Italy, Australia, France, the Netherlands, and Norway, with most of its production located in Sweden.
With three new models ready for launch in the next 18 months — the 9-5, 9-3X and 9-4X — managing director Jonsson said Saab has "an excellent foundation" to grow, assuming it can get funding for engineering, tooling and launch costs.
"Reorganization will give us time and means that help these products to market while minimizing the liquidity impact of Saab on GM," Jonsson said.
But analysts questioned whether Saab could survive on its own since it is a small player in the battered global auto industry.
"It doesn't have the economies of scale or the deep pockets," said Stephen Pope, chief global markets strategist for Cantor Fitzgerald. "Perhaps they're just trying dress it up for buyers."
Originally an aircraft maker, Saab started manufacturing cars after World War II. General Motors bought a 50 percent stake and management control of Saab Automobile in 1989 and gained full ownership in 2000. The aircraft division remains a different company.
GM's other European brands are Opel in Germany and Vauxhall in Britain. GM also markets its Chevrolet brand in Europe.
German officials have indicated that they are willing to help keep open Opel plants, but are insisting that the company outline a long-term plan for the division first.
Economy Ministry spokesman Steffen Moritz said in Berlin Friday that the automaker is expected to produce that concept "by the end of next week."
02-20-09, 07:49 AM
#4
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http://www.worldcarfans.com/9090219....rom-bankruptcy
Saab may be less than two weeks away from going belly up, according to parent company General Motors. GM asked the Swedish government for financial assistance to the tune of $568 million.
But getting the money from the Swedes will probably not happen. Swedish Industry Minister Maud Olofsson said neither she, nor the Swedish government, would bailout the company.
4,500 people work at the Saab Trollhaettan factory in the south of Sweden. Going bust would mean the loss of those jobs, and thousands more who work for suppliers that rely on the company.
GM requested the money to keep Saab above water long enough to seal a sale of the brand. Olofsson responded to this by saying, "The Swedish state and taxpayers in Sweden will not own car factories."
Olofsson puts the blame squarely on GM for Saab's current problems, saying GM concentrated on products people don't really want. She also said that if GM had been more innovative, and developed more fuel efficient vehicles sooner, they would not be in this mess. GM took a majority stake in Saab in 1990, and acquired the rest of the company ten years later.
Olofsson continued to say that Saab "has been running at a loss for so many years it would be irresponsible for me to stand here and say, sure, we are going to use taxpayer money in this way."
Saab's Board of Directors is reportedly in secret talks this week to discuss what to do with the company. They have the opportunity to file for reorganization, which allows them protection from creditors as they attempt to create a plan to make them profitable. As opposed to bankruptcy, creditors have to be convinced that a writedown of the debts they are owed is in their best interest. If they agree, they cannot attempt to force a liquidation. If they disagree, the reorganization process will halt.
Should they proceed with reorganization, they may sever legal ties to GM, and continue to press the Swedish government for assistance.
http://news.bbc.co.uk/1/hi/business/7899244.stm
Quote, originally posted by BBC »
The board of the Swedish carmaker Saab, which is owned by General Motors, has held an extraordinary board meeting to consider its future.
Local media reports have suggested Saab was considering taking measures to seek protection from creditors.
There have been doubts about the future of Saab since the Swedish government rebuffed GM's call for financial aid for the car maker.
It was later reported that the meeting had been adjourned.
Micael Lindell, a union representative at Saab, said the board meeting had broken up and would reconvene at some point, but could not say when this would happen.
Saab itself has refused to confirm that the meeting took place.
'Cash demands'
GM plans to make Saab an independent business by the start of 2010.
The reorganisation process is the Swedish equivalent of going into Chapter 11 bankruptcy in the US.
The company applies to the district court for a reorganisation ruling.
If it is granted, an administrator is appointed, but the current management continues to run the company.
The administrator helps negotiations with the company's creditors to decide how much of their money they will receive.
The reorganisation lasts three months and may be renewed by the court, up to a maximum of one year.
During that period, the company is not allowed to pay off any debts that were accumulated before the reorganisation was declared.
GM has been looking for a buyer for Saab, and said on Wednesday "given the urgency of stemming sizeable cash demands associated with Saab operations" it would need support from the Swedish government prior to any sale.
But the country's Enterprise and Energy Minister Maud Olofsson told Swedish public radio that "voters picked me because they wanted nursery schools, police and nurses, and not to buy loss-making car factories"
Saab may be less than two weeks away from going belly up, according to parent company General Motors. GM asked the Swedish government for financial assistance to the tune of $568 million.
But getting the money from the Swedes will probably not happen. Swedish Industry Minister Maud Olofsson said neither she, nor the Swedish government, would bailout the company.
4,500 people work at the Saab Trollhaettan factory in the south of Sweden. Going bust would mean the loss of those jobs, and thousands more who work for suppliers that rely on the company.
GM requested the money to keep Saab above water long enough to seal a sale of the brand. Olofsson responded to this by saying, "The Swedish state and taxpayers in Sweden will not own car factories."
Olofsson puts the blame squarely on GM for Saab's current problems, saying GM concentrated on products people don't really want. She also said that if GM had been more innovative, and developed more fuel efficient vehicles sooner, they would not be in this mess. GM took a majority stake in Saab in 1990, and acquired the rest of the company ten years later.
Olofsson continued to say that Saab "has been running at a loss for so many years it would be irresponsible for me to stand here and say, sure, we are going to use taxpayer money in this way."
Saab's Board of Directors is reportedly in secret talks this week to discuss what to do with the company. They have the opportunity to file for reorganization, which allows them protection from creditors as they attempt to create a plan to make them profitable. As opposed to bankruptcy, creditors have to be convinced that a writedown of the debts they are owed is in their best interest. If they agree, they cannot attempt to force a liquidation. If they disagree, the reorganization process will halt.
Should they proceed with reorganization, they may sever legal ties to GM, and continue to press the Swedish government for assistance.
http://news.bbc.co.uk/1/hi/business/7899244.stm
Quote, originally posted by BBC »
The board of the Swedish carmaker Saab, which is owned by General Motors, has held an extraordinary board meeting to consider its future.
Local media reports have suggested Saab was considering taking measures to seek protection from creditors.
There have been doubts about the future of Saab since the Swedish government rebuffed GM's call for financial aid for the car maker.
It was later reported that the meeting had been adjourned.
Micael Lindell, a union representative at Saab, said the board meeting had broken up and would reconvene at some point, but could not say when this would happen.
Saab itself has refused to confirm that the meeting took place.
'Cash demands'
GM plans to make Saab an independent business by the start of 2010.
The reorganisation process is the Swedish equivalent of going into Chapter 11 bankruptcy in the US.
The company applies to the district court for a reorganisation ruling.
If it is granted, an administrator is appointed, but the current management continues to run the company.
The administrator helps negotiations with the company's creditors to decide how much of their money they will receive.
The reorganisation lasts three months and may be renewed by the court, up to a maximum of one year.
During that period, the company is not allowed to pay off any debts that were accumulated before the reorganisation was declared.
GM has been looking for a buyer for Saab, and said on Wednesday "given the urgency of stemming sizeable cash demands associated with Saab operations" it would need support from the Swedish government prior to any sale.
But the country's Enterprise and Energy Minister Maud Olofsson told Swedish public radio that "voters picked me because they wanted nursery schools, police and nurses, and not to buy loss-making car factories"
02-20-09, 01:03 PM
#6
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You know, GM had to know that Saab was going to file bankruptcy within 72 hours of them giving that plan to Congress to demonstrat their "future viability". Funny, they didn't seem to stress the point that they have done nothing but lose money owning Saab. Well, I guess we will see if it is true that people won't buy a car from a bankrupt company. Bye bye Saab.
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