GM May Close Saab After Buyer Backs Out

The sale of Sweden’s number two automaker, Saab, to a consortium headed by tiny supercar manufacturer Koenigsegg Group AB always looked a little shaky—David swallowing Goliath—but now it’s off completely as the buyer backed out, citing GM foot-dragging over the deal as a primary reason.

Things now look so dire that Saab may simply be closed, sharing the fate of Saturn (once considered to have a bright future under Roger Penske, who also backed out of a deal) and Pontiac.

Koenigsegg was to have worked with Beijing Automotive Industry Holdings (which would have gotten a minority stake in Koenigsegg), as well as Norwegian investor Baard Eker and a former Russian telecom executive, Augie K. Fabela II of VimpelCom. The European Investment Bank was also expected to make a commitment, guaranteed by the Swedish government.

In a statement, Koenigsegg implied that the economic climate was now too uncertain and full of “risks and uncertainties” for the deal to be consummated.  Koenigsegg said that “time always played a critical factor in our strategy for reviving the company.” Chairman Augie Fabela told Bloomberg, “We came to the decisions after deliberations over the past few days that time just ran out for us to make the deal happen. It’s up to GM now.”

GM CEO Fritz Henderson said that the company is “obviously very disappointed” and will wait a few days before announcing its next move.

Saab has a long and colorful history that reached a peak in the 1980s, but the company is on life support now. The U.S. division of the company sold 7,441 cars in the first 10 months of 2009, and just 513 in October. The 218-strong dealership network was being shrunk 37 percent in a plan announced November 15.

Photo: Flickr/Mr. Littlehand