Saab Faces Scrapheap as Sale Fails

Washington DC November 25, 2009; The AIADA newsletter reported that Koenigsegg Group AB said Tuesday it was backing out of a deal regarding its planned purchase of Saab, citing a series of costly delays.

The agreement with Koenigsegg was based on financial backing from the Swedish government, but in the end, taking on Saab proved to be too costly for a boutique car maker with no high-volume manufacturing experience.

According to the Wall Street Journal, many industry observers say the emergence of another buyer for the money-losing company is unlikely amid the car business's historic downturn.

Still, Saab on Tuesday received at least one expression of interest from a potential purchaser, according to one inside source.

The surprise collapse of the Saab deal means GM and its newly formed board of directors are faced with yet another tough decision on the company's global product portfolio.

In recent months, the board approved, then ultimately reversed, Chief Executive Frederick "Fritz" Henderson's plan to sell majority control of GM's Germany-based Opel unit. The 13-member board, which includes Henderson, will talk about Saab's future at a previously scheduled meeting next week, said people familiar with the situation.

Click here for more on WSJ's take on GM’s difficulty in selling its Saab brand.