Beijing Automotive Buys Saab Technology from GM
General Motors (GM) recently made a deal with Beijing Automotive Industry Holding Corporation (BAIC) to buy Saab's car and engine technology to begin producing Saab models. The deal is a great compromise for GM because the company has been trying unsuccessfully to sell its Saab division all year.
Several companies have looked at buying Saab, such as European automakers Koenigsegg, Spyker, and Renco. A poor economy and the state of Saab's books had caused those deals to fall through. The BAIC deal gives Saab a large cash infusion that may make it more appealing to potential buyers. It is believed GM would have closed the Saab division next month if this deal had not taken place.
The cost of the sale has not been made public, but Reuters reports that BAIC now has a new credit line with the Bank of China for 20 million Chinese yuan. That's about $3 million US dollars.
The Times Online reports that both GM and BAIC are thrilled with the deal. BAIC says, "The deal is an important milestone in BAIC’s cooperation with Saab. It has laid a fairly good foundation for the two sides to further explore win-win co-operation." Jan-Åke Jonsson, Saab's managing director, was also pleased and said the sale is "excellent for both parties."
BAIC has similar deals with both Daimler and Hyundai but has only been producing trucks under these arrangements. The Saab deal gives BAIC the chance to begin building passenger sedans as well. They will start production of Saab models 9-3 and 9-5 using the engine, transmission, and production equipment technology they purchased.