General Motors Company (GM) is the second largest car producer in the world. But due to the recession and the economical crises, the company got up in troubles itself. Begin June 2009 it asked for Chapter 11 bankruptcy proceedings and GM started with a reorganization. General Motors decided to concentrate on their US brands and started to sell their other participations, like Opel.
26 January 2010 General Motors declared that it had reached a deal with Spyker Cars about Saab. Spyker would pay 74 million dollar in cash and GM will receive 326 million dollar preferred shares in Saab.
Spyker is a small Dutch luxury carmaker and sold only 43 cars in 2008, which give them a loss of 35 million dollar. But it has made a compromise with the Swedish government, which will warrant a 563 million dollars loan from the European Investment Bank for Saab Automobile.
First of all, I think it’s good news for the employees, dealers and customers that Saab, a carmaker with a large history is saved from bankruptcy.
But on the second place, if you ask me, the marriage between Spyker and Saab is a lost cause.
Because Spyker is just a small firm and it’s used to produce a few cars every year and Saab has to produce thousands.
Could a firm which never have realised profits improve Saab, that lost 412 million dollar in 2008?
In maths, the sum of two negatives numbers will always be negative, why should it be different in this case?
My conclusion is that General Motors is succeeded to sell Saab, but the future of the Swedish carmaker is not without risk. The Swedish government will try to save their national icon. The future will show if this was a good solution.
Based on following article:
http://news.bbc.co.uk/2/hi/business/8481621.stm
Benny De Meyer, 2FV4
1 opmerking:
In my opinion it isn’t a good case that GM sells Saab to the Dutch firm Spyker because Spyker is, like you have said, a very small car manufacturer with a small production . For me these two companies have not the same vision . Saab was a worldwide spread producer compared with Spyker which has a very small sale.
The only positive thing in this takeover is that GM has received a lot of preferred shares in Saab so they are still able to keep an eye over Saab
The main reason why GM has decided to sell Saab is a large need for new capital.
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