General Motors can’t get brand exit strategies right regardless of who is running the show there. Government Motors held a press conference today to discuss the death of the Saab Automobile brand.
The company noted this morning, “General Motors announced today that the intended sale of Saab Automobile AB would not be concluded. After the withdrawal of Koenigsegg Group AB last month, GM had been in discussions with Spyker Cars about its interest in acquiring Saab. During the due diligence, certain issues arose that both parties believe could not be resolved. As a result, GM will start an orderly wind-down of Saab operations.”
GM claimed that the due diligence period required could not be completed in a reasonable period of time, but noted that the Saab unit needed a quick resolution. There is a fairly simple reason why Government Motors said this. The creative math that would have been needed to make the dollars and cents turn into sense does not exit yet.
Now GM said it is working with the Saab organization to wind down operations “in an orderly and responsible manner.” Government Motors is claiming that this is not a bankruptcy nor a forced liquidation. GM also noted that Saab will continue to honor warranties and offer service and spare parts to current Saab owners around the world. Will that keep the Blue Book values from plummeting? Doubtful.
Saab Automobile AB announced last week that it had closed on the sale of certain Saab 9-3, current 9-5 and powertrain technology and tooling to Beijing Automotive Industry Holdings Co. Ltd., and that is not affected by today’s actions.
It is almost impossible to not have a cynical take on anything out of Government Motors these days. The value of the brands that are being kept alive is just much less than it used to be, and frankly this is a fair question: Is there really any value at all without the implied government guarantee?
GM did not always own Saab. But it was on watch when this one hit the guard rail at 120 miles per hour. Another GM brand is disappearing. Now the saying from the 1980’s is more true than ever…. There really is a tear with every Saab.
JON C. OGG
Top Gaining Stocks
Top Losing Stocks