Saab stories aren't always sad
The Saab logo at a car dealership in Miami
TEXT OF INTERVIEW
Steve Chiotakis: And GM's Swedish unit, Saab, has its first court hearing with creditors today. Detroit has made no bones about its desire to dump the subsidiary as soon as it can. But things on that front seem to be looking up.
Our man in London, Stephen Beard, joins us right now. Stephen, not-too-long ago, it appeared Saab was down for the count.
Stephen Beard: That's right. GM threatened to dump it unless the Swedish government bailed it out. The Swedish government said, no sorry, we can't afford it. GM said well we can't afford it either, and we're going to cut loose the company next year, just turn our backs on it, abandon it to its face. Saab went for a kind of Chapter 11 bankruptcy, and the company meets its creditors in court today.
Chiotakis: And the creditors want their money back, Stephen, how are they going to do that?
Beard: Well, the creditors of course want their money back, but they're being asked to write off a big chunk of it. Saab says if they do, the European investment bank will put in about $600 million, GM itself will write off $400 million worth of debt and also let Saab keep some of its production equipment. So essentially they're saying to the creditors really, we can get through this, you're just going to have to write off quite a bit of the debt.
Chiotakis: It sounds like their whole mentality now is upbeat, is that right?
Beard: It is, and more surprisingly, the court-appointed administrator is sounding upbeat. Their are 20, 20 potential buyers looking at the company, and a deal is expected by June. The administrator says that with the restructuring that is currently underway, the company can lower its break even level to about 130,000 cars a year, it'll be in profit by 2011. Pretty optimistic forecast in the current climate, but that's what the administrator is saying.
Chiotakis: All right, our European correspondent, Stephen Beard, joining us from London. Stephen, thank you.
Beard: OK, Steve.