General Motors’ European brands are near collapse, with Germany’s Opel in need of more state funding and Sweden rejecting Saab’s plea for state aid until its business plan is sound.
Filing for protection from creditors on Friday, Saab said it would present a reorganization proposal within three weeks. Court filings revealed Saab estimates its losses in 2008 and 2009 at around 3 billion Swedish crowns ($340.1 million).
Stockholm’s industry minister Maud Olofsson said the information received about Saab’s situation on Friday was not enough for the Swedish government to provide the carmaker with loan guarantees.
“I have told GM we have doubts about this business plan,” Olofsson told a news conference.
Opel became the first European carmaker to seek a government bailout since the economic crisis began. It requires a total of 3.3 billion euros ($4.15 billion) in liquidity to keep it afloat through the end of 2011, a company source said.
GM’s viability plan presented to the U.S. Treasury on Feb. 17 introduced a totally new and unpredictable variable into Opel’s financing equation.
For example, the new Insignia, manufactured in Russelsheim, Germany, with right-hand drive and a Vauxhall badge, is priced for the UK market according to a stronger sterling-euro exchange course.
“We end up losing a couple of thousand euros per car,” the company source said.
Opel is suffering from a continued plunge in European car markets and a painful weakening in key currencies.
Opel finance chief Marco Mollinari confirmed to Reuters the company now requires more than the initial 1.8 billion euros in guarantees.
A source at the German government said Opel had warned the situation could become dramatic by March with its cash tight and a threat looming of balance-sheet insolvency.
A person familiar with the matter said the German governent was informed in advance of growing problems at Opel.
“It’s entirely clear that (Opel) cannot become a bottomless hole,” the source said. “When you talk about a plan, then there must be one sum that can sustain a business model until time ‘X’ without any ifs, ands or buts.”
Sweden’s Olofsson called GM’s business plan for Saab “still too optimistic” and warned the government would not hand out guarantees to companies not sound or solid.
Olofsson, who has repeatedly ruled out owning carmakers, demanded that GM answer how it plans to make Saab profitable and provide the resources necessary to launch new car models.
In a first step of goodwill, GM’s global purchasing boss, Bo Andersson, said the parent would establish a “mechanism” that ensures suppliers to Saab are paid in a timely fashion.
Proposing to concentrate design, engineering and manufacturing in Sweden, Saab said Friday the court-appointed administrator’s reorganization would take three months and require independent funding as it seeks a new investor.
“Even though we have not been actively searching for new partners, we have had many knocking on our door showing interest in Saab,” its chief executive, Jan-Ake Jonsson, told a news conference in the carmaker’s hometown of Trollhattan.
The crisis has come at a tough time for Saab, just as it is scheduled to launch badly needed new models, like the 9-5, designed to rejuvenate its elderly product range.
Opel plans to roll out the fourth generation of its bestseller, the Astra hatchback, and all-new versions of the Meriva and Zafira minivans in the coming years.
Source: Automotive News Europe