GM’s Saab files for bankruptcy
The reorganization is a self-managed, Swedish legal process headed by an independent administrator appointed by the court who will work closely with the Saab management team. As part of the process, Saab will formulate its proposal for reorganization, which will include the concentration of design, engineering and manufacturing in Sweden. This proposal will be presented to creditors within three weeks of the filing. Pending court approval, the reorganization will be executed over a three-month period and will require independent funding to succeed.
“We explored and will continue to explore all available options for funding and/or selling Saab and it was determined a formal reorganization would be the best way to create a truly independent entity that is ready for investment," said Jan Ake Jonsson, Managing Director for Saab Automobile. “With an all new 9-5, 9-3X and 9-4X all ready for launch over the next year and a half, Saab has an excellent foundation for strong growth, assuming we can get the funding to complete engineering, tooling and manage launch costs. Reorganization will give us the time and means that help get these products to market while minimizing the liquidity impact of Saab on GM."
Funding for the restructured company will need to be secured during the reorganization process and will be sought from both public and private sources.
Saab will continue to operate as usual and in accordance with the formal reorganization process, with the Government providing some support during this period. The reorganization should have no impact on other GM operations. Details of the progress will be provided as milestones are achieved.
02/20/09 Sweden has been in the news lately. And so has General Motors (GM). But you may not have known that the two intersect. That's because Swedish car-maker Saab is a GM subsidiary — one that just filed for bankruptcy.
GM's viability is also seriously in question, thanks to its unrealistic financial projections. Perhaps the best solution is some kind of prepackaged bankruptcy that would let GM continue operating while it renegotiates contracts with workers, suppliers, dealers, and bondholders.
Sweden is also in the news because some are citing its 1990s temporary nationalization of the banking industry as a model for what should happen in the U.S. But those folks are barking up the wrong tree. How so? We have a dual problem here: We need to get lending going fast and we need to wind down failed financial institutions in an orderly way.