Saab Story: GM Looks to Unload It

The board of the Swedish automaker is meeting amid reports it may file for bankruptcy.
Publish date:

Updated from 11:33 a.m. EST

General Motors

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is moving ahead with plans to sell its Saab operating unit and may sell a stake in Opel.

The European auto sales environment "is every bit as severe as the U.S. environment in terms of primary demand and the challenges we face," president Fritz Henderson told analysts on a conference call Wednesday. In the viability plan it submitted to the Treasury on Tuesday, GM said it will cut 47,000 jobs, including 26,000 jobs outside the U.S., this year.

Regarding Saab, the company's objective "is to create an entity that is stand-alone and self financing," Henderson said. "If we cannot find common ground, we could find our Swedish business may need to file for reorganization, perhaps this month."

GM wants to sell Saab and "given the urgency of stemming sizeable outflows associated with Saab operations," it is seeking Swedish government support, according to the viability plan. GM has proposed capping its own financial support, "with Saab's operations effectively becoming an independent business entity effective January 1, 2010."

CEO Rick Wagoner noted "the responsiveness and professionalism of government officials we've dealt with around the world has been impressive," citing Germany and Sweden, among other countries, during a conference call with reporters on Tuesday.

The Saab board met Thursday, a union representative told


, amid reports that the company was set to file for reorganization, a method of gaining protection from credits without an outright bankruptcy filing. The board was set to meet with union representatives this morning,




reported that the Swedish government on Wednesday ruled out owning carmakers and responded negatively to GM's overtures.

GM bought 50% of Saab in 1989, then bought the remainder in 2000. The company, which accounts for about 1% of GM's worldwide volume, has not made a profit since 2001.

Regarding Opel, "management is willing to consider strategic third-party partnerships, alliances and equity stakes in case such an approach is seen as beneficial for GM Europe and Opel's viable and sustainable future," Europe President Carl-Peter Forster said Thursday, the

Detroit News

reported. Forster said the automaker is seeking $1.2 billion in labor cost savings, on top of existing measures, including a wage freeze.

Meanwhile, German newspapers are reporting that the German government is willing to take a stake in Opel and that German states with Opel factories are willing to participate. GM acquired Opel nearly 80 years ago.

GM shares were trading late Thursday morning at $2.07, up 1 cent, while shares in


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were trading at $1.68, up 1 cent.