Saab North America to be run by outside administrator
DETROIT -- Saab Cars North America has appointed an outside administrator to operate the company and potentially wind it down after parent Saab Automobile filed for bankruptcy protection in Sweden on Monday.
The move by the automaker's U.S. sales arm -- designed to avoid bankruptcy or immediate liquidation -- was announced today during a conference call with reporters by Tim Colbeck, COO of Saab Cars North America, which handles sales, distribution and marketing for the Swedish brand.
"We believe this is the best and most appropriate course of action for our stake holders, to keep this action out of court," Colbeck said. "We feel this is the best solutions for creditors, dealers and customers."
McTevia & Associates -- a specialist in corporate turnarounds and financial management -- was named as the administrator and will attempt to resume operations, Saab said.
No timetable was given.
Colbeck said the other option would have been a bankruptcy proceeding, resulting in possible liquidation.
Saab's 188 U.S. dealers have 2,400 cars and light trucks in inventory.
Colbeck acknowledged that Saab North America could be forced by creditors into bankruptcy -- or it could opt to file for court protection down the road -- if a buyer for the parent company does not come forward.
"We've basically stopped our business in an effort to not incur any additional debt or develop any additional receivables," Colbeck. "At this moment in time we have stopped business with dealers and we look to restore that business very shortly."
Colbeck said the administrator was appointed to assure creditors that they will be treated fairly.
"And as long as they are comfortable with that, we can continue on this path," he said. "At a certain point in time it could transition into something like liquidation."
Colbeck said the automaker is working with dealers to create a plan to dispose of inventory.
"We want to make sure that everybody has the most favorable outcome to what is a sad chapter here for Saab," he said.
The automaker is in the process of determining whether the new cars can be sold as "new" without a warranty or whether they must be marked as "used."
"I think a lot of that has to do with the direction everything takes in the next couple of months and our ability to warrant the cars," he said.
Colbeck said the company that handles Saab parts, which is located in Sweden, is not in bankruptcy.
"We are looking at ways to immediately get our business back up and running in parts," he said.
On Monday, the company told U.S. dealers that all warranties were suspended.
"We are aggressively looking at ways to reopen our warranty business in North America," Colbeck said. "You have also seen where GM has come in an offered to honor warranties on '09 and prior year vehicles which is per our agreements with them. We are happy that they are doing that."
As for employees, there are no plans to make cuts.
"We have to do our due diligence and continue the day-to-day operation of keeping our dealers supplied with parts and figure out solutions to some of these other issues that we are up against," Colbeck said.
"We have made no announcements so our employees are still here. We plan on being here. Certainly as time goes by and the likelihood of a buyer diminishes, then our activities may change to more of a wind down."
Colbeck, asked it he was angry that GM blocked several proposals to save the company, said: "Angry is a strong word. I would have liked to see a different outcome but GM thought that is what they needed to do and they were able to do it.
"No, life is too short to be angry. We have to move on and do what we can to keep this brand going."