GM to maintain ties to Saab after sale

General Motors Corp. consistently lost money on its Saab brand and ran out of cash as the bankrupt automaker was preparing to launch the next-generation of vehicles at the Swedish automaker, President and Fritz Henderson said today.

Henderson made the comments in a series of text messages with reporters hours after the automaker announced it had reached a memorandum of understanding to sell the Saab brand to luxury sports car maker Koenigsegg Automotive AB. Financial terms were not disclosed.

Under the agreement, Henderson said GM will continue to provide support for powertrain and other technologies, and that he expects GM will be asked to build the 9-4x compact crossover for Saab.

Since filing bankruptcy, GM also has reached deals to sell Hummer and Saturn as part of the automaker’s plan to focus on four core brands: Cadillac, Chevrolet, Buick and GMC.

One hundred percent “of our product, technology and marketing spend will now be focused behind the 4 core brands and 34 nameplates,” Henderson wrote during the text-based chat. “Each one needs to be a hit and that is our challenge/commitment.”

Pontiac, meanwhile, will not be sold and is scheduled to be phased out next year.

“We have had success in discussions with buyers — re Hummer, Saab and Saturn, but in the end we did not see the same potential to be honest for Pontiac,” Henderson wrote.

Saab sold just 93,000 vehicles last year — primarily in Sweden, Britain and the United States. Analysts say it is too small to attract interest from a global automaker seeking scale.

The automaker filed for court protection on June 1 under section 363(b) of the U.S. Bankruptcy Code. As part of the bankruptcy process, the Treasury Department plans to buy the automaker’s “good assets” and provide GM with an additional $30.1 billion to operate while in bankruptcy.

That would boost the government’s total investment in GM to $50.5 billion.

Henderson said GM will trim its executive ranks by 34 percent by the end of this year as part of the sweeping restructuring. Overall, the automaker plans to trim 20 percent of its U.S. white-collar workforce by the end of 2009.

Responding to complaints from Tennessee Gov. Phil Bredesen that GM wants a large cash payment for a commitment to build a new small car, Henderson said a final site selection will be based on 12 undisclosed criteria.

“Not simply one,” Henderson wrote today.

By the end of the month, GM is expected to select one of three sites: Orion Township; Spring Hill, Tenn.; or Janesville, Wis.

The automaker is negotiating with state and federal officials in Michigan, Tennessee and Wisconsin to build the small car at an idled factory.

Orion Township officials are offering a $44 million incentive that includes a 100 percent tax break on new machinery and equipment for up to 12 years.

Source:Detnews.com