Saab Declares Bankruptcy, Needs New Investor To Prevent Extinction

The time is up for Saab. After 64 years in operation, parent company Swedish Automobile NV has filed for voluntary bankruptcy for its subsidiaries Saab Automobile, Saab Automobile Tools and Saab Powertrain. This regrettable, though not totally surprising, development follows General Motors' reiteration over the weekend that it will cancel the licensing agreements currently allowing Saab to produce cars using GM's architecture and technology if the buyer remains Chinese.

GM fears that the sale of Saab to Chinese firm Zhejiang Youngman Lotus Automobile, the last viable investor left on the table, would effectively transfer valuable proprietary technology to the rest of the Chinese car industry. GM's unwavering stance meant that Saab's board, led by Victor Muller, was left with little choice but to declare bankruptcy in the absence of new funding sources.

Muller, who personally submitted the application for bankruptcy to the Vanesborg district court in Sweden, described yesterday as “the darkest day in my career—possibly in Saab's history”. The Swedish court has since approved the bankruptcy filing and appointed two receivers to assess and sell off remaining assets to pay back creditors, most of whom are car parts suppliers to Saab.

Despite a mountain of debt owed to suppliers and months of unpaid wages, this may not necessarily be the end for Saab. Muller has expressed hope that Saab, along with its history and the jobs of 3500 employees, can be saved if a new investor is found in time. His optimism stemmed from the fact that five different parties had shown interest in Saab over the past year, though it is more than likely that no Chinese parties will be involved again.