Like so many ill-considered marriages, GM’s entanglement with Saab was destined to end badly. We conclude the story of this unhappy union.
Having taken full ownership of Saab Automobile AB in 2000, GM was free to continue its planned transformation of the company into a premium competitor to Audi, BMW and Mercedes-Benz. The existing 9-3 was looking dated, appearing little different to the New Generation 900 launched in 1994, and its five-door format was out of step with its intended competitors, the A4, 3 Series and C-Class.
A new 9-3 was developed in parallel with the Opel Vectra C, based on the new GM Epsilon platform. Both cars were launched at the Geneva Motor Show in March 2002. The 9-3 adopted a four-door Sport Saloon format. A convertible followed in 2004 but the arguably more important SportWagon estate didn’t arrive until late 2005 as a 2006 model.
The new 9-3 was well received and Saab sales increased to around 176,000 in 2005. That would prove to be the high-water mark for the company and sales fell back to just 133,000 in 2006 and continued to decline thereafter.
Profits were still proving elusive* and GM, assailed by problems with its US domestic brands, was losing patience with its remote Swedish outpost. It realised the limitations of Saab’s existing narrow model range and sought a quick and expedient way to bring additional models to market.
In 2004, it launched the 9-2X, a Subaru Impreza estate with a Saab-style nose and different interior trim. The Saabaru was greeted with incredulity by the market and sold poorly, shifting only around 10,500 units before being discontinued after just two years. GM tried again with the 9-7X, a Chevrolet Trailblazer with Saab trimmings, launched in 2005. This did a bit better, selling around 86,000 units before becoming a casualty of GM’s bankruptcy in 2009.
These modest additional sales came at the expense of destroying Saab’s credibility as a serious premium brand. GM inflicted further reputational damage on the marque by cancelling both the planned 2005 replacement for the 9-5 and a five-door Combi version of the 9-3, delaying the introduction of all-wheel-drive versions of the 9-3 until 2008 and floating the idea of moving Saab production from Trollhättan to the Opel plant in Rüsselsheim. By 2006, Bob Lutz, GM’s Vice-Chairman, was lobbying hard internally for the disposal of Saab to anyone who would take it off GM’s hands, but GM’s CEO Rick Wagoner still believed it could be turned around.
The 9-5 received a second and highly controversial facelift in 2006. The restyled front end was ridiculed by some who christened it the Dame Edna because the heavily chromed headlamp surrounds resembled the gaudy spectacles worn by Australian comedian Barry Humphries’ female alter ego. Almost nobody considered the revisions to the 9-5’s appearance an improvement.
In an attempt to boost flagging sales, Saab also facelifted the 9-3 in June 2008. Over 2,000 changes were said to have been made, but most noticeable was a new front end with a clamshell bonnet and larger light units that wrapped around the front wings, giving the car a more distinctive appearance that reprised both the Classic 900 and (pre-facelift) 9-5 models. Just six months later in December 2008, GM announced that Saab’s future was “under review” and floated the possibility of selling or closing down the company.
The effect of this announcement and the Global Financial Crisis on Saab was catastrophic: annual sales more than halved from around 93,000 in 2008 to 39,000 in 2009. In February 2009 the Swedish courts approved the appointment of an administrator to protect Saab from its creditors and allow time to reorganise its finances. Industry reaction to this was scathing of GM. Stephen Pope, Chief Global Strategist at US financial services firm Cantor Fitzgerald summed up the feelings of many when he said that GM “oversaw the destruction of the Swedish car company’s soul”.
GM’s sales negotiations continued and, in June 2009, Koenigsegg Automotive AB, a Swedish manufacturer of high-performance supercars, announced a deal to buy Saab. Koenigsegg was backed by Norwegian investors and Chinese automaker BAIC. This deal unravelled in November when the parties failed to agree a financing plan with the European Investment Bank and Swedish National Debt Office. BAIC did, however, buy the IP rights to the 9-3 and outgoing 9-5 for $197 million, providing Saab with vital working capital.
GM had itself filed for Chapter 11 bankruptcy protection by this time and had been recapitalised by the US and Canadian governments to the tune of $40 billion. A condition of this refinancing was that Saab would be disposed of, and talks continued.
Saab was finally sold to Dutch automaker Spyker N.V. in February 2010. GM would receive cash of $74 million and shares in Spyker worth $320 million, while Spyker would sell its small sports car business to concentrate on its new acquisition. In a bizarre twist, having finally sold Saab, GM began building its new mid-sized crossover, the 9-4X, at the GM plant in Mexico. This shared the new Theta Premium platform with the Cadillac SRX and only 738 examples were produced before production stopped late in 2010.
Saab sales fell further to just 32,000 in 2010 as confidence evaporated. Just a year after the GM sale, Saab again ran out of money and Spyker couldn’t continue to provide funding. Takeover talks between Spyker and different Chinese automakers were frustrated by GM’s repeated refusal to licence its IP to any Chinese competitor. This would lead in 2012 to a $3 billion lawsuit from Spyker against GM, which was dismissed by the US courts.
Saab finally filed for bankruptcy in December 2011, with net debts of over $1.5 billion.
Ironically, by far the best GM-era Saab was launched in the midst of these crises in late 2009. The new 9-5 was a handsome A6, 5 Series and E-Class rival. Early cars were less than fully developed and suffered from a brittle and harsh ride, but the potential of the new model was clear. A SportCombi estate version was shown in early 2011 but never entered series production. A total of just 11,280 9-5 saloons were sold before production ceased in March 2011. They are now a reminder of what might have been and are still sought after by Saab enthusiasts.
The corpse of Saab has been disinterred on a few occasions since, notably in the form of the Chinese NEVS EV project. These events are recorded in a DTW series of contemporary news pieces entitled Death’s Revolving Door and make interesting further reading.
* It is difficult to ascertain Saab’s ‘true’ profitability under GM ownership because of arcane internal accounting practices concerning payments in respect of intellectual property, royalties and licensing. GM is no different to many other multinational companies in this regard.
More on the subject of Saab here.