STOCKHOLM – After six decades of building cars renowned for their teardrop designs and quirky features, cash-strapped Saab Automobile gave up its desperate struggle for a lifeline Monday and filed for bankruptcy.
Saab CEO Victor Muller said “the last nail in the coffin” was previous owner General Motors Co.’s rejection of a Chinese company’s attempts to gain control of the ailing Swedish brand. Muller personally handed over the bankruptcy petition to a Swedish court, which approved it late Monday.
Though a theoretical chance remains for a new buyer to step in during the bankruptcy process, analysts said Saab’s troubles underline how difficult it is for a small, niched carmaker to survive in today’s competitive global market.
“I think it does kind of reflect the situation in the industry that scale is everything,” said IHS Automotive analyst Ian Fletcher. “Everyone else have been snapped up. … Saab unfortunately were the last people waiting to dance with someone and they didn’t have the right partner.”
Volvo Cars, Sweden’s other carmaker, is presently ramping up production after China’s Geely Holding Group bought it from Ford Motor Co. last year.
Muller, a Dutch entrepreneur, used his luxury sports carmaker Spyker Cars to buy Saab from GM in 2010 for $74 million in cash plus $326 million worth of preferred shares. He vowed to gradually increase production while restoring Saab’s Swedish identity – which critics said was diluted under GM ownership. But the company ran out of money just a year later.
The news was grim for Saab’s more than 3,000 employees, torn between hope and despair for the past three years.
“This is the most unwelcome Christmas gift I could have imagined,” said Fredrik Almqvist, 36, who has worked at Saab’s assembly line for nearly 17 years.
While experts say the company is likely to be chopped up and sold in parts, local officials in Saab base Trollhattan – about 46.6 miles north of Sweden’s second-largest city, Gothenburg – were hoping a new buyer would emerge to salvage the brand.
Saab has sold just 5,305 vehicles in the U.S. so far this year, down sharply from a peak of 48,250 in 1986, according to the Los Angeles Times.