General Motors Corp (GM.N) is prepared to pump in $400 million to help make its Saab car unit profitable if the Swedish state guarantees an even bigger loan to the firm, Swedish daily Dagens Industri said on Thursday, citing unnamed sources.
The newspaper said GM had told unions at a Saab board meeting on Thursday it was prepared to put 3.5 billion Swedish crowns into the firm if the Swedish government guaranteed a 5.2 billion crown loan to Saab.
Part of the money would be used to launch new models and part to cover the loss made by Saab last year. The goal is to help it reach annual sales of 120,000-130,000 vehicles, which would make the firm profitable by 2011 or 2012, Dagens Industri said.
The Saab board is due to continue its postposed meeting from yesterday, sometime later today.
More on this shortly….
So – the proposal – as best as I can tell:
GM will act as guarantor for a $450m loan from the EIB and ask the Swedish government to guarantee a larger loan from the EIB in order to bring Saab’s new vehicles to market.
Saab will bring out the 9-3x, bring the 2010 9-5 and the 9-3 convertible production to Sweden. I assume this money would also cover the final costs of finishing and launching the 9-4x.
Saab would hope to sell it’s 9-3, 9-3conv and 9-3x as well as the new 9-5 and 9-4x in [much] better numbers through the end of 2010.
As I see it, the fault in the plan is that Maud Olofsson wants to see a sales rise straight away. This money they’re asking for is just to get Saab through this year, with very little in the way of new models to sell. It’s most likely going to be 2010 before Saab see a real sales rise as that’s when the new models are scheduled to come out.
It’s only a year, but it’s a year too long for the Swedes (and for GM, who want to cut Saab off Dec 31st, 2009).