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GM could sell Saab for $1; Ecclestone-backed Genii to make new offer

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Report: GM could sell Saab for $1; Ecclestone-backed Genii to make new offer

01/19/2010, 10:28 AMBY ANDREW GANZ

A consortium backed by both businessman Lars Carlstrom and Formula One chief Bernie Ecclestone says that it plans to make a new offer for Saab that shows its ability to support the brand for an extended-range period. The offer is said to include a nominal $1 offer for Saab, which would spare GM the $145 million task of shutting the brand down, as well as the long-range plans to keep the small Swedish automaker running.

The consortium – which is a little confusing in terms of the number of players involved – includes Carlstrom and Ecclestone, as well as Luxembourg-based Genii Capital. The offer is said to be capable of providing more long-term growth opportunities for Saab than Spyker’s offer. GM has indicated that Spyker’s cash offer is acceptable, but that the supercar builder would not be capable of running Saab for the long term.

“We are trying to reach agreement with GM on several outstanding issues,” Spyker CEO Victor Muller told Dow Jones Newswires. He said that Spyker expects a final offer from GM later this week.

Saab rallies

Last weekend, more than 5,000 Saab fans across the world staged various protests and “support Saab” rallies, the largest of which drew about 1,500 enthusiasts to Saab’s Trollhattan, Sweden, hometown.

Whether the rallies will have any affect on GM’s decision to sell the brand is unclear. Genii says that GM’s liquidator has not begun to dismantle Saab’s factories. The automaker will continue to produce cars through at least the end of next week, according to IF Metall Union chief Paul Aukerlund, and dealers in Europe are still instructed to accept orders for new Saabs.

link:

http://www.leftlanenews.com/report-gm-could-sell-saab-for-1-ecclestone-backed-genii-to-make-new-offer.html

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I don't understand GM's calculus here; if someone is willing to pay them $0 and assume full control of the brand, why is GM so concerned about the new owner's ability to make the brand a long term going concern? It's not theirs anyway, and they save the wind down costs, as this article says. The only things I can think of are GM being on the hook for warranty work and lawsuits from dealers.

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I don't understand GM's calculus here; if someone is willing to pay them $0 and assume full control of the brand, why is GM so concerned about the new owner's ability to make the brand a long term going concern? It's not theirs anyway, and they save the wind down costs, as this article says. The only things I can think of are GM being on the hook for warranty work and lawsuits from dealers.

I don't understand it either.

I mentioned it to someone at work, and they suggested that maybe GM is afraid of (1) losing customers to Saab and/or the new Saab marketing their vehicles toward GM and taking some of that market share and also (2) Saabs have a lot of parts from the GM parts bin, so GM would still be in the mix if the new owners fail to make Saab successful. However, I don't at all agree with (2) because GM could create a clause saying that after maybe 2-3 years, the parts that comprise the Saab vehicles would have to be all non-GM parts. And, with (1), of course GM is going to lose customers, there's no doubt about it, but I don't see Saab taking any additional marketshare from GM since it's kind of a niche brand.

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