Detroit News: Saab NA hires consultant
December 21, 2011 in News
Washington -Saab North Americas said Wednesday it will not file for bankruptcy, even as its parent company in Sweden has sought court protection this week.
Saab NA’s president and chief operating officer Tim Colbeck said the company had hired Bingham Farms-based McTevia & Associates as an outside administrator to ensure that all creditors are treated fairly.
Parent company Saab Automobile AB filed for bankruptcy in Sweden on Monday after its former owner General Motors Co. blocked a deal to sell the company to a group of Chinese investors.
The company, acquired by Dutch luxury car company Spyker Cars in February 2010, has produced few vehicles since March and struggled to raise enough cash to pay bills.
Colbeck, who is a former Subaru executive, acknowledges Saab has “not very good odds” to keep the company from liquidating.
Jim McTevia, the company’s managing member, said he plans to conduct a 30-day or longer review of Saab North America’s operations, before offering the company guidance on its next steps. “I am going to keep the company operating as long as it has the capital,” McTevia said in an interview.
He said Saab North America accounts for more than 35 percent of Saab’s worldwide sales. “There is a tremendous amount of value here,” McTevia said. He’d like to keep the company operating long enough to find a new buyer for its parent company in Sweden – and says it is smarter and cheaper to keep Saab North America out of bankruptcy.
Colbeck said the best chance for survival would be if a company purchased Saab out of bankruptcy in Sweden. He said it’s disappointing that the “hard-fought battle to save this brand” hasn’t succeeded.
Saab has been forced to suspend all warranties and dealer incentive payments. It hopes to restart its parts business.
Saab is working to restart warranty coverage for vehicles in dealer showrooms, Colbeck said.
Saab’s 188 U.S. dealers have 2,400 Saab vehicles in showrooms and last month sold just 356 vehicles.
Colbeck acknowledged that Saab North America could be forced by its creditors into bankruptcy — or it could opt to file for court protection down the road — if no buyer emerges for its parent company.
Under the terms of its sale of Saab in February 2010, General Motors Co. will underwrite warranties for all Saab vehicles sold before February 2010.
Colbeck declined to answer questions about the fate of Saab North America’s 50 employees at its Royal Oak headquarters or answer detailed questions about current financial situation.
Without a new buyer, Saab — the quirky company that produced thousands of turbo hatchbacks and pioneered many safety advances — will go out of business.
Saab is the only one of the four brands that GM exited during its 2009 bankruptcy restructuring that has made it this far. Pontiac, Hummer and Saturn have all gone out of business.
Thanx Bernard for the tip! =)