General Motors has said that it would stop supplying parts and vehicles to Saab under a proposed sale of the brand to Chinese owners, a rejection that threatened to kill a pending rescue plan for the Swedish automaker.
The statement represented a hardening in GM's opposition and called into question the survival of a niche brand beloved by enthusiasts for its early use of technology like turbocharging and its distinctive Scandinavian designs.
Victor Muller, chief executive of Saab's embattled owner Swedish Automobile, said GM's rejection of the proposed rescue plan would mean that negotiators would have to “go back to the drawing board” with Chinese investors Pang Da Automobile Trade Co and Zhejiang Youngman Lotus Automobile.
A deal for the Chinese companies Pang Da and Youngman to rescue Saab had been awaiting approval from Chinese government officials.
Muller told Reuters that he expected to discuss the GM rejection with the Chinese companies today.
GM, which operates in China in a partnership with state-run carmaker SAIC, basically decided that continuing to supply vehicles and technology to Saab's new owners would be against the best interest of its own shareholders.
LURCHING BETWEEN CRISES:
On Friday, GM had said that it would be difficult to support a sale of Saab if it hurt GM's competitive position in China and other key markets.
The proposed rescue deal for Saab had to be approved by GM, which still has preference shares in Saab and has supplied the Swedish carmaker with crucial components.
It would also have required approval from BMW, which has agreed to supply Saab with 1.6-liter engines for future vehicles.
Saab has lurched from crisis to crisis in the past year and has not produced a car in months. The company was given court protection from creditors in Sweden in September. It was the second time Saab received protection from creditors in two years.
Saab has sold just under 5000 vehicles in the US this year through October. By contrast, Volvo sold about 57 000 vehicles in the same period. -Reuters