STOCKHOLM (Reuters) -- Saab's fight for survival intensified today as the General Motors unit won protection from creditors while trying to find a new partner and raise fresh funds.
GM, which itself faces mountainous debts and a future that hangs in the balance, refuses to continue funding Saab's losses. In a survival plan submitted to the U.S. Treasury this week, GM said the Swedish firm would become an independent business as of Jan. 1, 2010, after 20 years of GM control.
Saab lost about 3 billion crowns ($340 million) in 2008, according to documents filed with the Swedish court that granted the company a stay of execution. The automaker expects a similar loss this year, blaming slack demand, aging products, overcapacity and high costs.
The company said it needed a rapid restructuring in order to address the level of near-term losses and new funding from either private or public sources to launch more competitive models. Saab also said it had to find a new partner.
"We explored and will continue to explore all available options for funding and/or selling Saab," Saab Managing Director Jan-Ake Jonsson said in a statement. The company is seeking $1 billion (793 million euros) to be self-financing.
Any restructuring would need the approval of Saab's creditors, who will meet on April 6.
In its court filing for reorganization under Swedens self-managed court process, Saab said GM has said it "would not fund further the projected losses," but would provide liquidity while the company restructures. It was not immediately clear whether GM would cover this year's projected loss.
Swedish daily Dagens Industri said today that GM is prepared to pump in $400 million into Saab if the Swedish state guarantees a further loan of $590 million.
The funding package would target annual sales of 120,000-130,000 vehicles and a profit in 2011 or 2012, the newspaper said, quoting unnamed sources. The firm sold just over 93,000 cars in 2008 -- 21,368 of those in the United States. It was the lowest U.S. total since 1994.
Many analysts believe such sums would be far too little to turn Saab around, and question whether the brand has a realistic future.
Sweden said late last year it would provide its vehicle industry with up to 25 billion crowns in aid to help it through the current global crisis.
Talks with GM
The government said this week its talks with GM over state aid for Saab lacked a realistic basis, but a senior Swedish official told Reuters today the state had not closed the door to providing loan guarantees to the carmaker.
"That will depend on what the plans look like," said Joran Hagglund, state secretary at the Swedish Industry Ministry.
"If you provide loan guarantees to someone, you must be sure the company has a future."
Saab and rival car firm Volvo have helped shape Sweden's image abroad with their focus on safety, family motoring and high engineering standards.
But the current economic crisis has plunged the auto industry worldwide into crisis, adding to problems for carmakers in countries with high production costs such as Sweden.
Volvo Cars has been put up for sale by Ford Motor Co.
Saab and Volvo employ more than 20,000 people in Sweden with thousands more jobs at suppliers tied to the two companies.
Outside help needed
Chris Preuss, a spokesman for GM Europe, said GM was prepared to provide some funding for Saab but the brand needed outside money as well.
"GM has put a substantial amount of money on the table to sustain Saab's operations and to launch the products that are in the pipeline, he said. "We have asked the Swedish government for loan guarantees for $600 million to give Saab a balance sheet as an independent unit which will allow it to continue."
Preuss said funding for Saab is still intact. "We just need to see how funding can be secured from either government or private sources during the restructuring process," Preuss told Automotive News Europe.
GM's support would also extend to the development costs and tooling for the new 9-5, 9-4X and 9-3X, which will launch in the next 18 months.
GM will also continue to provide technical support to Saab and provide parts through licensing agreements, Preuss said, but there were limits to the aid GM would provide.
Preuss said that GM President "Fritz Henderson made it very clear that GM will be out of Saab one way or another by the end of this year."
GM bought half of Saab in 1990 and took full control in 2000. The brand has made a profit only in one year during GM's ownership.
Saab employs some 4,000 people in Sweden, mainly at its plant in Trollhättan in the southwest of the country. Another 25,000 jobs at suppliers depend on Saab.
John Revill contributed to this report.