banktime.com

Struggling U.S. automaker GM was thrown into turmoil recently when the expected buyer of its Saab subsidiary backed out of the purchase deal. Today in Paris, a European spokesperson for General Motors announced news that Koenigsegg Automotive of Sweden would not be purchasing the GM imprint, which is also Swedish in origin. The representative commented that the entire company is “very disappointed” to have seen the deal fall through, which I’ll guess to be a major understatement. GM is also currently in the midst of a frustrating effort to restructure its Adam Opel division overseas. Fritz Henderson, GM’s chief executive, stated that the company will “take the next several days to assess the situation and will advise on the next steps next week.”

For Koenigsegg’s part, the Swedish automaker has tactfully suggested that delays on GM’s parting the process of completing the sale have led at least in part to their decision to terminate the purchase agreement. A representative commented to national media that “[D]elays in closing [the] acquisition [of Saab] have resulted in risks and uncertainties that prevent [Koenigsegg] from successfully implementing the new Saab business plan.” Koenigsegg would not comment on the likelihood of revisiting the possible acquisition in the future, but did say that the Swedish government would not be stepping in to help. A Swedish GM representative denied that the company caused any undue delays that might have held up their end of the contract.

The GM-Koenigsegg deal has been in the works since June. At the time that the deal was initially brokered, its success depended upon some six hundred million dollars in financing being made available to the Swedish automakers from the European Investment Bank and Swedish government guarantees. Some experts in the field wondered at that time why on Earth Koenigsegg – which sports just forty-five corporate employees, remains unlisted, and releases just a handful of high-performance sports auto models every year – would take an interest in such a massive company and whether Koenigsegg even had the capacity to step up its production and manpower to handle the demands of the Saab name.

It seems that Koenigsegg may have decided to turn its interests elsewhere during the length of the alleged wait for GM to finish their end of the deal. Back in September, the Swedish company inked a “memorandum of understanding” with a Chinese auto company, Beijing Automotive Industry Holdings, that would have the latter holding a minority stake in Koenigsegg’s holdings. Together, Beijing Automotive and Koenigsegg will endeavor to consider and capitalize upon “growth opportunities in the Chinese and international markets.” There is also the possibility that the Swedes developed cold feet with the issue of known risks when it comes to Saab, which has not been profitable in years and sells less than one hundred thousand units annually. Saab filed for reorganization protection in bankruptcy court back in February. The Chinese partners may not have been happy with the idea, either.

Meanwhile, GM will continue to seek help and support from European national governments in its quest to overhaul Opel. This comes after months of GM trying to unload the company, and nearly reaching an agreement with the German government. As many as forty thousand jobs could be cut in the process of Opel’s reorganization and effort to cut costs.