They use the term wind-down, as they have done for a while, but in business terms, this is commonly referred to as Liquidation.
First up, here’s the text of the press release from GM.
GM Statement Regarding Saab
GM today confirmed it has selected AlixPartners to supervise the orderly wind down of Saab, and has requested approval of the selection by the appropriate authority in Sweden. The use of a wind down supervisor is a commonly-used process in Sweden and works in the interest of the shareholder.
The wind down process is expected to take several months, and will ensure that employees, dealers and suppliers are adequately protected. As stated previously, Saab customers can be assured that warranties will continue to be honored and that service and spare parts will continue to be available.
GM also confirmed that it has received several proposals for Saab and is continuing to evaluate these proposals. This evaluation is not affected by the appointment of AlixPartners.
So what happens, as I understand it, is that these people from Alix Partners (if they’re approved) come in (when told to do so), they replace management and they start making the decisions that will govern the orderly wind-down, or liquidation, of the business.
It is important to note that this is an extension of what they’ve previously, already talked about. They’ve been planning for this and we know that.
It is also important to note that the evaluation of bids for the sale of Saab continues.
With those bids and potential sale of Saab in mind, it’s is also important to note that this seem completely crazy and totally unnecessary at this point in time.
GM received at least 5 bids for Saab and there is absolutely no doubt, with the players that are involved in this and the time that’s been invested, that more than one of those bids represents a viable opportunity to sell Saab Automobile.
With that being the case, why did GM have to take this step and make this appointment?
Even with this announcement, it is unlikely that anything will take place on the part of Alix Partners this weekend. This is just the announcement of an appointment and the request for approval by the Swedish authorities. There is no timetable set out for the commencement of the liquidation process (although it would seemingly be quite soon if they’ve appointed someone). If GM select one of the bids that are currently on the table, then this process can be stopped.
But with that in mind, it makes absolutely no sense to do this if they do intend to sell Saab. No sense whatsoever.
Imagine someone is selling a car. They are undecided as whether they should sell it wreck it and sell for parts. You go along and make an offer on the car. In writing. They say they’ll get back to you.
Next day, you go back around to see what they have to say and the owner is removing the interior. You ask “what’s going on, I made you an offer” and the owner says “well, I’m still considering your offer, but I’m just dismantling the car anyway”
That’s the sort of thing that’s possibly about to happen, but with much bigger consequences. If you were the buyer, what would you do?
This announcement sends the absolute wrong message to the marketplace and to the bidders.
THIS is why we’ve been campaigning.
This is why we’ve been trying to keep the spotlight on General Motors and bring out the facts about Saab’s position – so they can’t just do stuff like this and justify it with a mealy-mouthed press release and a smile.
This is why it’s important to write to your government representatives in large numbers – because someone’s got to keep GM on a leash and make sure they act in good faith.
Swedes – you now have a big part to play here too.
Representatives from your government are flying to Detroit this weekend. It’d be handy if they knew with little uncertainty that a large number of people expect them to put in a strong showing.
Joran Hagglund is apparently going to let them know what will be available to a buyer and the timetable for it. I really hope he is more forthright than that.
In fact, Maud Olofsson should be at that meeting.
It ain’t over (still). This announcement from GM was totally unnecessary in light of the fact they received 5 bids from the company a matter of just hours beforehand.
The potential for damage to Saab in the public eye – just from this announcement alone – is greater than what you think, and why GM needed to do make this announcement at this precise time is known only to them.