Saab owners seek $3bn payout from GM

The owners of bankrupt carmaker Saab are suing General Motors for $3bn, claiming the US company blocked a sales and production deal in China that would have kept the Swedish brand afloat.

Netherlands-based group Spyker filed suit against GM in the United States District Court in Detroit on Monday, seeking compensation for “unlawful actions GM took to avoid competition with Saab Automobile on the Chinese market”.

The legal action marks the latest in a long series of mishaps around the failed Swedish car brand, which GM sold to Spyker in 2010 and which was declared bankrupt in December of last year.

Faced with dwindling sales and cash reserves, Spyker last year agreed a deal with Zhejiang Youngman Lotus Automobile that would have seen the Chinese group pump money into Saab in exchange for equity in the Swedish concern and the right to make and sell its cars in China.

GM, which retained some preferred shares in Saab after the sale to Spyker, opposed the agreement because it thought it could jeopardise its existing interests in China, where it makes cars and commercial vehicles with Shanghai Automotive, or SAIC.

Saab built cars such as its flagship 9-5 based on GM technology, and the US carmaker was also nervous about having its intellectual property transferred to third parties in China.

Spyker on Monday claimed that it had suffered “massive damages” as the result of what it claimed were unlawful actions on GM’s part.

“We owe it to our stakeholders ourselves that justice is done and we will pursue this lawsuit with the same tenacity and perseverance that we had when we tirelessly worked to save Saab Automobile, until GM destroyed those efforts and deliberately drove Saab Automobile into bankruptcy,” said Victor Muller, Spyker’s chief executive.

Spyker said that it had secured the money needed to pursue the lawsuit from an unnamed third-party investor and would seek “a very substantial share” of Saab’s award if it was successful.

“We have reviewed the complaint, and it is completely without merit,” GM said on Monday. “We will vigorously defend the company against these baseless allegations.”

The Detroit carmaker decided to wind down Saab in early 2009 as it prepared to file for reorganisation in bankruptcy protection in the US.

Even at the time, industry participants doubted that any new investor would succeed in building a viable business out of a niche volume-car brand with fewer than 100,000 annual unit sales, especially given Saab’s reliance on GM for its intellectual property.

When Saab announced its deal with Youngman, analysts also expressed scepticism that China’s government would have signed off on its investment in the Swedish concern.

In June, Saab’s bankruptcy receivers sold the carmaker’s assets to a group of Chinese and Japanese investors, who said they planned to make an electric car based on the brand’s small 9-3.