General Motors, the parent company of Vauxhall, will allow another subsidiary to collapse amidst the current economic turmoil. Saab could file for bankruptcy protection within days after GM have failed in their efforts to sell the brand and following the Swedish Government's decision not to intervene.
The desire to sell Saab is part of GM's massive restructuring programme to please the US Treasury as it seeks US tax payer assistance to the tune of $30bn (£21bn). Indeed, so compelling are the economics reasons to sell the Swedish car brand that the US car giant would rather see it disappear off the car showroom landscape.
The lack of support offered by GM has outraged Swedish politicians with Maud Olofsson, the Swedish Industry Minister, stating “I’m deeply disappointed in General Motors. They have in practice removed their hand from Saab [...] Instead, they are handing over responsibility to Swedish taxpayers.”
The decision to cut Saab adrift from the General Motors' portfolio represents one of the many cost cutting initiatives sweeping across its European activities. To make the business viable, GM has indicated that savings of up to $1.2bn in Europe alone need to be found starting with 47,000 global job cuts (26,000 outside of US soil). This is compounded by forecasts indicating that Europe will not produce a profit until 2011.
GM are actively looking for assistance from the Swedish, German, Canadian, Thai and British governments whilst also looking for partners to support Opel and Vauxhall.
