Beijing Automotive plans to 'move fast' on GM's Saab

“Stay tuned,” Beijing Auto President Wang Dazong told reporters today in Nanjing, eastern China, when asked whether the company would bid alone for Saab or as part of a group. He declined to say whether a bid would be submitted before GM's board discusses the unit's future at a meeting tomorrow.

Beijing Auto previously offered to buy GM's Opel unit to tackle what Wang today called a lack of “technology depth” at the Chinese automaker. While GM directors might opt to keep Trollhaettan, Sweden-based Saab, as they did with Opel this month, GM has a contingency plan that calls for winding down the brand, people familiar with the plan have said.

“If Beijing Auto bought the technology, they wouldn't have anyone who understood it,” said John Zeng, a Shanghai-based analyst at IHS Global Insight. “It would be a big challenge for them to make it a success.”

Koenigsegg Group AB last week walked away from a Beijing Auto-backed bid for Saab, saying it ran out of time to complete a transaction. Beijing Auto, Merbanco Inc. and Renco Group Inc. have since made approaches about Saab, two people familiar with the situation have said. Wang declined to say whether Beijing Auto has made an approach.

“I can't control GM's timetable,” Wang said. “We want to move fast.”

New Bids?

Beijing Auto and Merbanco may make a joint offer for Saab, Swedish newspaper Dagens Industri reported today, citing unidentified people with knowledge of the plan.

Zheng Gang, a Beijing Auto spokesman, declined to comment on the report. Merbanco President Chris Johnston didn't immediately return an e-mail seeking comment.

Merbanco, a Wyoming-based investor group, was one of the three final suitors for Saab in June, together with Koenigsegg and Renco, people familiar with the situation have said.

Johnston said in a Nov. 26 interview that he would be willing to help Saab. When asked whether that could include acquiring a majority stake in the carmaker, he said: “that could be one way.”

“I do not believe that the company should be closed,” Johnston said in the interview. “Whoever buys Saab, or if GM keeps Saab, there's a lot of work ahead but I believe that the company should survive.”

Opel, Volvo

In the past, Merbanco has acquired companies in industries ranging from financial services to agricultural equipment, he said. “We are turnaround people,” he said. “We are very interested in companies that are stressed. We really like to work with talented management teams to fix companies. We are very hands-on, we are very involved.”

Beijing Auto's bid for Opel failed because the companies couldn't come to an agreement over intellectual property rights to car designs and technology, Beijing Auto said at the time.

Chinese carmaker Geely Holding Group Co., which is in talks to buy Ford Motor Co.'s Volvo, said last week that the Swedish unit would retain ownership of technology following a sale.

Asked if Beijing Auto would follow Geely's example with Saab, Wang said: “We don't see a need to buy a new plant. I don't see a need to buy a building; I don't see a need to buy a robot. So what's left? You figure it out.”

Two Decades

At Saab's peak of popularity in the 1980s, it appealed to buyers who sought a European brand mixing safety, reliability and innovation. GM bought half of Saab in 1990 and the rest in 2000.

Saab has been unprofitable for most of the time under GM control. As the U.S. carmaker slid toward bankruptcy it decided in February to dispose of the Swedish unit. Saab sold fewer than 100,000 vehicles worldwide last year.

Saab's U.S. sales slumped 62 percent this year through October, with just 513 deliveries last month, and the European total plunged 59 percent.

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