- The Washington Times - Tuesday, January 12, 2010

DETROIT — The final decision on whether the Saab brand will live or die is likely to come later this month or in February, General Motors Co.’s top European executive said Tuesday.

The statement from GM Europe President Nick Reilly came as the Swedish government took another step toward ending Saab’s life, appointing two men who will replace its board and CEO while supervising Saab’s closure.

The men, Stephen Taylor and Peter Torngren, will meet with management, unions and other Saab stakeholders and start working on a plan to close the troubled brand, GM said in a statement.

The Swedish government becomes involved when companies are liquidated, according to the Web site of the agency that governs them, the Swedish Companies Registration Office.

GM started closing Saab operations last week but still is in talks with two possible suitors. The company hired a firm to oversee the sale of Saab’s assets, and CEO Ed Whitacre Jr. said last week that he was not optimistic that Saab could be saved.

Mr. Reilly said that while the negotiations continue, Saab continues to lose money.

“The longer it carries on as we start to wind it down, the more difficult it is for somebody to come along and buy it,” Mr. Reilly said.

He also told reporters at the Detroit auto show Tuesday that he expects to finish restructuring GM’s Opel operations this month. He said changes that combine GM Europe and Opel management will be announced Friday or Monday.

GM is trying to gain concessions from unions and loans from European countries as it restructures Opel.

He also said Opel lost money last year and probably will this year, but the restructuring is designed to get the brand to a break-even point at 13 million to 13.5 million sales in Western Europe.

The restructuring includes concessions from workers as well as job cuts and factory reductions, but Mr. Reilly also said it will include product investments. Workers could see profit sharing as compensation for the concessions, he said.

GM will need roughly $4.8 billion to fund the restructuring and may provide $869 million of that itself, but the rest would come from concessions and loans from European governments.

GM’s restructuring at Opel is expected to result in about 9,000 job cuts, but its engineering operations would remain intact, Mr. Reilly said. Opel employs about 45,000 people in Europe, about 25,000 of them in Germany.

GM has been trying to sell Saab for more than a year, but has entertained other bids after a deal with Swedish specialty car maker Koenigsegg collapsed last month.

Dutch automaker Spyker made a bid last week, as did Luxembourg private equity group Genii Capital, which also emerged as a new suitor, saying it had teamed up with British billionaire and Formula 1 tycoon Bernard Ecclestone.

But GM announced last week that it had hired a company to start winding down Saab’s operations. The automaker employs about 3,400 people.



Click to Read More

Click to Hide