Saab said it intends to appeal to the European Investment Bank for an emergency loan. The Swedish automaker could file for bankruptcy this month if it does not receive additional funding, its parent company, GM, said.
Saab needs money and its owner GM isn't in a position to provide it
Swedish Enterprise and Energy Minister Maud Olofsson told Swedish television on Tuesday, Feb. 17, that "it is clear that GM wants to sell Saab." Olofsson also said the government was prepared to guarantee any loan made by the EIB to Saab.
General Motors officials said Tuesday that if Saab does not receive additional support, the Swedish carmaker would file for bankruptcy protection "as early as this month."
"Given the urgency of stemming sizeable outflows associated with Saab operations, GM is requesting Swedish government support prior to any sale," GM said. "While GM is hopeful that an agreement can be reached with the Swedish government to support this direction, the Saab Automobile AB subsidiary could file for reorganization as early as this month."
Saab independent by 2010
GM is mulling the sale of some of its non-American brands
US auto giant GM, which is also seeking another bailout from Washington, had said it planned to sell Saab, but the loss-making Swedish brand needs extra funding to secure its survival.
"The company has developed a specific proposal that would have the effect of capping GM's financial support, with Saab's operations effectively becoming an independent business entity effective January 1, 2010.
Discussions on securing a loan initially took place between Saab, GM and the Swedish government at the start of December. Saab would need to borrow as much as 475 million euros ($600 million), according to press reports.
Meanwhile, GM is expected to speed up its timeline for restructuring over the next 18 months, including the possible sale of its Hummer and Saturn brands as well as Saab. The carmaker announced 10,000 job cuts last week and may offer buyouts and early retirement to another 22,000 workers.
The American carmaker on Tuesday asked the US government for $16.6 billion more aid and said it plans to cut 47,000 jobs worldwide and close 5 more US plants. GM was granted $13.4 billion and Chrysler $4 billion in emergency government loans in December.
Volvo Cars, which is owned by US automaker Ford, already requested a loan of 475 million euros from the EIB at the end of January.
Around three-quarters of a rescue plan for the Swedish car industry amounting to 28 billion kronor (2.7 billion euros) consists of Swedish government guarantees for loans from the EIB.