Bankrupt Auto Company Hopeful for the Future

Posted By San Diego Bankruptcy Pros || 19-Jun-2012

Saab, a Swedish car manufacturer, filed for bankruptcy in 2011. Now, the company is being bought by the National Electric Vehicle Sweden (NEVS) for an undisclosed sum of money. Saab has been manufacturing cars since 1947 – 65 years – and was eventually sold to General Motors. When GM filed for bankruptcy in 2008, Saab was sold to a Dutch group called Spyker. Ever since it was bought by GM about in 1990, Saab and its loyal fan base have struggled to survive in the midst of larger, competitive companies.

Saab is responsible for a variety of technological advancements in the automobile industry, and NEVS hopes to put Saab's technological potential to good use in the electric car industry. On Wednesday, bankruptcy administrators decided to sell the company to NEVS instead of a Chinese group called Zheijang Youngman Lotus Automobile.

NEVS plans to introduce Saab into the electric car market. "Marketing and sales will be global," said NEVS's chief executive and main owner, "but initially we will focus on China." The owner, who is a China-born Swedish citizen, has taken great interest in power production from biomass in China. "It's there we see the biggest market for electric cars."

Saab's former union boss and the mayor of Trollhattan remains hopeful for Saab's future. "Saab has risen again," he said. While some employees are optimistic, the company has obviously suffered a giant setback – instead of the 3,500 employees that it used to require, Saab's new operation will only take 200 employees. The company plans to hire more workers as the company nears production of Saab's new electric car models.

NEVS said that it wants to design a new electric car based on Saab's already manufactured 9-3 model. They plan on improving the design and launching an entirely new model of electric car in the next few years – hopefully by 2013 or 2014. The new car will use a Japanese-based technology, setting an expectant state for Saab's future technological advancements.

At the moment, NEVS does not actually own all of the rights to Saab's designs. NEVS claims to have purchased most of Saab's assets, but not every part of the bankrupt business. The 9-3 models were included in NEVS's purchase, but other models, such as the 9-5 and 9-4x were not included in the deal. "The issues that were at stake revolved around the 9-4x and the 9-5 technology license," said a GM spokesman, "that was the big issue impacting the previous transaction."

Even though Saab has a fairly loyal following of fans, analysts have been expecting it to go bankrupt for several years. Catering to a niche audience of buyers, Saab is comparable to Volvo. In the past, Saab has failed to produce up to its full potential. Even still, the company remains hopeful about next few years. "Through the purchase of Saab we begin a new era in the auto industry," said NEVS's chief executive and owner.

Categories: Bankruptcy

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