Business OpportunitiesGod natt Saab
GM/Saab: Is General Motors about to pull an Opel on Saab? The sale of its Swedish subsidiary to Koenigsegg has fallen through, and directors are considering whether to keep it going. There may be some on the Detroit carmaker’s board who reckon GM should bring Saab back into its garage — just as the company did earlier this month with its main European operations. They should resist the temptation.
- GM-Opel"s threatened loss of jobs strains EU principles - GM generates $3.3 billion, will repay loans - GM sees $1.2 bn loss in Q3; to accelerate loan repayment - GM plans to start govt loan repayment later this yr: report - IOC depot fire spews all-round destruction - GM chief apologises for the handling of Opel, Magna deal
Granted, General Motors is in better shape after its restructuring. But the Motown manufacturer still has more than enough fine-tuning of its own to do. While it managed to generate $3.3 billion in cash and $1.5 billion of Ebitda last quarter, many of its plants were idle for much of the summer and a wad of bills were paid in early July by its bankrupt predecessor.
That means it’ll be hard to replicate the performance without an uptick in sales. And GM still has to cut more of its staff and dealers. The last thing it needs is the distraction of taking on another struggling niche operation. Opel, it can be argued, was a special case. GM was going to keep a third of the European mass-market carmaker anyway and was concerned about sharing technology with prospective buyers Magna and, via Sberbank, Russian carmaker Gaz.
That’s not the case with Saab. As sad as it will be for Swedish manufacturing, GM should send Saab to the junk yard.