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GM denies problems selling Saab brand

Saab Automobile owner General Motors on Thursday rejected reports it was having trouble finding any buyers interested in acquiring the troubled Swedish car brand.

Published: 9 January 2009 06:36 CET

“It’s still early in the process,” one GM official familiar with the proceedings told AFP.

“It’s going to take some time.”

As recently as last summer, GM chairman Richard Wagoner said the company intended to keep Saab in the GM family and re-tool its North American product line.

But as GM’s financial crisis deepened when sales collapsed this fall, GM put SAAB up for review as part of the restructuring plan it presented to Congress in early December in order to obtain $13.4 billion in loans.

GM Vice Chairman Bob Lutz recently told the trade publication Automotive News that the term strategic review is “code for ‘we realize they’re not working and something needs to be done.'”

The plans presented to Congress indicated GM was unwilling to make additional investment in Saab products.

GM put its Hummer brand up for sale back in June and so far has failed to finalize a deal, although the hulking brand has attracted some interest from potential buyers.

Paul McCarthy, a consultant with PricewaterhouseCoopers in Detroit, noted that merger and acquisition activity in the automotive sector has declined since the mid-2008.

“Everything is for sale but there haven’t been many deals,” said McCarthy, citing tight credit markets and uncertainty over the ultimate fate of GM and Chrysler as the key reasons for decline in automotive sector deals.

As part of the survival plan, GM also said it will trim its Pontiac line and review the future of Saturn.

GM bought half of Saab in 1989 and the rest of the company a decade later.

About 75 percent of the Swedish brand’s sales are in Europe.

Saab sold 21,368 vehicles in the United States in 2008, down 34.7 percent from 2007, while the overall market dropped 18 percent.

The current exchange rate between the euro and the dollar means that nearly every Swedish-built Saab sold in the United States is sold at a loss to GM, according to Automotive News.

The Swedish government has announced plans to provide up to $3.19 billion in credit guarantees and emergency loans to Saab and Volvo, which Ford Motor Co. put up for sale last month in a bid to raise additional funds.

From lizards to water, eco-bumps snag Tesla's giant Berlin car factory

Tesla's gigafactory outside the doors of Berlin. dpa-Zentralbild | Patrick Pleul

“When I saw on TV that the Tesla factory was going to be built here, I couldn’t believe it,” said Steffen Schorch, driving his trusty German-made car.

The 60-year-old from Erkner village in the Berlin commuter belt has become one of the faces of the fight against the US auto giant’s first European factory, due to open in the Brandenburg region near Berlin in July.

“Tesla needs far too much water, and the region does not have this water,” said the environmental activist, a local representative of the Nabu ecologist campaign group.

Announced in November 2019, Tesla’s gigafactory project was warmly welcomed as an endorsement of the “Made in Germany” quality mark – but was immediately met with opposition from local residents.

Demonstrations, legal action, open letters – residents have done everything in their power to delay the project, supported by powerful
environmental campaign groups Nabu and Gruene Liga.

Tesla was forced to temporarily suspend forest clearing last year after campaigners won an injunction over threats to the habitats of resident lizards and snakes during their winter slumber.

READ MORE: Is Germany’s Volkswagen becoming ‘the new Tesla’ as it ramps up e-vehicle production?

And now they have focused their attention on water consumption – which could reach up to 3.6 million cubic metres a year, or around 30 percent of the region’s available supply, according to the ZDF public broadcaster.

The extra demand could place a huge burden on a region already affected by water shortages and hit by summer droughts for the past three years.

Local residents and environmentalists are also concerned about the impact on the wetlands, an important source of biodiversity in the region.

Tesla Street

“The water situation is bad, and will get worse,” Heiko Baschin, a spokesman for the neighbourhood association IG Freienbrink, told AFP.

Brandenburg’s environment minister Axel Vogel sought to play down the issue, saying in March that “capacity has not been exceeded for now”.

But the authorities admit that “the impact of droughts is significant” and have set up a working group to examine the issue in the long term.

The gigafactory is set to sprawl over 300 hectares – equivalent to approximately 560 football fields – southwest of the German capital.

Tesla is aiming to produce 500,000 electric vehicles a year at the plant, which will also be home to “the largest battery factory in the world”,
according to group boss Elon Musk.

In a little over a year and a half, swathes of coniferous forest have already been cleared to make way for vast concrete rectangles on a red earth base, accessed via the already iconic Tesla Strasse (Tesla Street).

German bureaucracy

The new site still has only provisional construction permits, but Tesla has been authorised by local officials to begin work at its own risk.

Final approval depends on an assessment of the project’s environmental impact – including the issue of water.

In theory, if approval is not granted, Tesla will have to dismantle the entire complex at its own expense.

But “pressure is being exerted (on the regulatory authorities), linked to Tesla’s significant investment”, Gruene Liga’s Michael Greschow told AFP.

In early April, Tesla said it was “irritated” by the slow pace of German bureaucracy, calling for exceptions to the rules for projects that help the environment.

Economy Minister Peter Altmaier agreed in April that his government “had not done enough” to reduce bureaucracy, lauding the gigafactory as a “very important project”.

Despite Germany’s reputation for efficiency, major infrastructure projects are often held up by bureaucracy criticised as excessive by the business community.

Among the most embarrassing examples are Berlin’s new airport which opened last October after an eight-year delay and Stuttgart’s new train station, which has been under construction since 2010.

Brandenburg’s economy minister, Joerg Steinbach, raised the possibility in February that the Tesla factory could be delayed beyond its July planned opening for the same reason.

SEE ALSO: Tesla advertises over 300 jobs for new Gigafactory near Berlin

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