Saab May Be Dead

Reports this morning indicate that General Motors' talks to sell Saab have failed. Now GM must decide whether to keep Saab, try to sell it again or wind it down. Just yesterday I mentioned GM's troubles. It's disappointing to see them continuing to struggle on such a fundamental level as to not even be able to sell its business units. But I think its problems selling Saab are particularly notable.

So now what happens to Saab? Bloomberg reports:

GM has a contingency plan for Saab similar to a process being used to wind down Saturn, the person said. Saab owners would continue to be covered by GM warranties and be assigned to a new dealership for service, the person said.

Saab isn't like Saturn. It's a brand originally founded back in 1937 in Sweden. It's also more of a luxury name. So this isn't some random experiment that GM started from scratch a few decades ago like Saturn. This was a well-established brand that GM managed to drive into the ground.

Of course, a more similar story could be told of Opel, another failed GM division sale. And that was founded even earlier -- back in the 1800s. Yet, GM had owned Opel for far longer than it had owned Saab -- since 1929 versus 1995. So it did its work very quickly with Saab.

But to be fair, Saab is also different from some of its peers in another way: it has a sort of cult following. At least, that's what I've observed over the years. There are those who love Saabs, those who hate Saabs and not many people in between. I'm sure GM has had a lot of trouble bridging the gap and trying to make Saab a more mainstream brand. And that's a shame, because anyone I've talked to who owned Saabs really liked them.

I find it bizarre that GM would be better off just winding down a brand like Saab rather than find someone to acquire it on the cheap. But perhaps GM really screwed up the brand so badly in 14 short years that buyers think it's beyond repair.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.

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