Friday, December 18, 2009

Saab Story

General Motors just announced it is discontinuing the Saab brand. And by that, I mean GM is shutting down the Swedish carmaker that it bought out a decade ago. There will be no more Saabs in any way, shape, or form (ironic, given Saab's history of unorthodox shapes in forms in its styling).
GM had hoped to find a buyer for the brand, turning first to consortium led by the Swedish sports car maker Koenigsegg Group AB. When those talks broke down last month, GM tried its luck with Spyker Cars, a firm from the Netherlands. When those talks broke down, it became obvious that two strikes were out in this case and GM decided that Saab need "a quick resolution." And so Saab will join other European niche carmakers such as NSU and Simca atop the dustbin of history.
Saab, originally an automotive division of an airplane company (Svenska Aeroplan AB, from which the name was derived), was ripe for a takeover when GM purchased half of its stock in 1989. Its sales were weak, and GM saw opportunities for expansion. The Detroit automaker modernized the brand's lineup and acquired the whole company by the year 2000, but its sales have suffered again of late and GM could not afford to keep it going. In the end, GM's European operations - at one point almost reduced to minority stockholder status in its other brands, Opel and Vauxhall - had no choice.
This is a sorry chapter in automotive history. GM learned the hard way that expansion isn't always good. Also at fault is the Swedish government, which could have bailed out Saab and saved people's jobs in Sweden but chose not to. Also, as smaller firms get bought out and liquidated by the giant car companies of the world, automotive innovation - historically spurred by smaller companies - will be less evident. As for Saab, it - and its Swedish rival Volvo, now owned by Ford - have long been celebrated for their safety innovations. Saab, in particular, made seat belts standard on its GT 750 model in 1958, and they developed the first headlight wipers, the first passenger compartment air filter, and cholro-fluorocarbon-free air conditioning. These are the kind of innovations that bureaucracy at large companies doesn't allow. Indeed, bureaucratic gigantism almost destroyed GM. Now GM is retiring Saab. What a sad irony.

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