General Motors to phase out Saab

NEW YORK — General Motors is killing off another well-known brand — Saab, a quirky line of cars known for angular roof lines and ignition keyholes between the front seats — after talks with a Dutch would-be buyer collapsed.

SAAB Managing Director Jan Ake Jonsson attends a press conference in Trollhaettan

NEW YORK — General Motors is killing off another well-known brand — Saab, a quirky line of cars known for angular roof lines and ignition keyholes between the front seats — after talks with a Dutch would-be buyer collapsed.

GM, Dutch automaker Spyker Cars and the government of Sweden, where Saabs are made, were in discussions as late as Friday morning. Spyker said the sale was too complicated to complete quickly. GM declined to elaborate on why the deal failed.

“We worked 24/7 for three weeks, but the complexity of the transaction in combination with the strict deadline simply did not allow us to complete the transaction,” said Victor Muller, CEO of Spyker, a producer of exotic sports cars.

The announcement almost certainly means the death of a brand with a small but devoted following.

Enthusiasts appreciated touches like placing the ignition lock between the front seats rather than on the steering column. Saabs were also known for unusual design, with flatter front windshields and sloping rear windshields that gave the cars an almost backward silhouette.

Saab was also a pioneer in turbocharged engines, beginning with the release of the Saab 99 in the 1970s, and the first carmaker to offer heated seating, in 1971. In his namesake sitcom, Jerry Seinfeld was a proud Saab owner.

GM bought a 50 per cent stake and management control of Saab for US$600 million after it split from Swedish truck maker Scania in 1989. It bought full ownership in 2000 for $125 million more.

Even after the GM takeover, Saab remained closely associated with Sweden and its history of making safe, reliable cars. But GM never made money on the acquisition. Industry analysts complained Saab lost its distinctiveness in the crowded market for luxury cars under GM, which stripped it of its angular design.

“More and more frequently, they were using GM platforms and sheet metals, moving away from that uniqueness based on styling,” said Tom Libby, an independent Detroit-area auto analyst. “There were styling cues that were unique to Saab — you see them and you say right away, ’Oh, that’s a Saab.”’

It’s the third time this year GM has failed to sell an unwanted brand. In September, auto industry magnate Roger Penske scrapped plans to buy Saturn after he was unable to find someone to make them when GM stops making them in 2011. GM is phasing out Saturn.

And last month, GM halted a deal to sell the European Opel brand to a group led by Canadian auto parts maker Magna International Inc. GM will keep Opel, which, unlike Saab, it considers critical to its international plans.

GM did successfully sell Hummer, which will go to Chinese heavy equipment maker Sichuan Tengzhong Heavy Industrial Machinery Corp. With Pontiac also closing, that leaves GM with just four brands: Chevrolet, Cadillac, Buick and GMC.

GM has endured an excruciating 2009. It came through bankruptcy and accepted more than $50 billion in government assistance, handing the government a majority stake. CEO Fritz Henderson was ousted in December, the second CEO to be forced out this year.

“This is a year that we’d choose not to repeat,” GM Vice-President John Smith told reporters Friday.

Saab employs about 3,400 people worldwide, most of them at its main plant in Trollhattan, Sweden. It also has a parts distribution centre and a design centre in separate locations in Sweden and an engine plant in Finland.

The brand has 1,100 dealers, who GM said will continue to honour warranties as the brand dies off.

“It’s devastating. It was a very unique brand,” said Ray Ciccolo, owner of two Saab dealerships in the Boston area, one of which has been in business since 1957.

Smith would not rule out the possibility that Saab might live on in some form, with some vehicles in development now that “might be attractive to some folks.”

But no buyers have stepped forward, and GM plans to begin liquidating the brand in early January.

The Swedish government called the decision surprising and regrettable.

“It’s GM who took this decision, on their own grounds, and they have to answer to that by themselves,” Enterprise Minister Maud Olofsson said at a news conference in Trollhattan. Stefan Lofven, head of the Swedish industrial workers’ union IF Metall, said the news came as a shock.

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