Saab files for bankruptcy

SAAB Automobile filed for bankruptcy yesterday after attempts by
Chinese investors to take over the loss-making brand were blocked by
previous owner General Motors Co.

Saab chief executive officer
Victor Muller personally handed in the bankruptcy application to a
court in southwestern Sweden, ending his two-year struggle to revive the
more than six-decades-old car maker, known for its rounded sedans and
quirky design features.

The Vanersborg District Court was expected to approve the application later in the day.

While experts say the company is likely to be chopped up and sold in
parts, local officials in the town of Trollhattan, where Saab employs
more than 3,000 people, were holding out hope that a new buyer would
emerge to salvage the brand.





"Our absolute hope is that the bankruptcy administrator will aim for a
solution where the company is sold in its entirety," Trollhattan Mayor
Paul Akerlund said in a statement.

Muller, a Dutchman, used
his luxury sports-car maker Spyker Cars to buy Saab from GM in 2010,
promising to restore its Swedish identity, but the company ran out of
money just a year later.

Even as production stopped and salary
payments were delayed, Muller fended off bankruptcy by selling the
company's real estate and lining up financing deals with investors in
Russia and China. He bought time by placing the company in a
reorganization process under bankruptcy protection.

But the
deals fell through, blocked by regulators or by GM, which still owns
some technology licenses for Saab. The US car maker was concerned that
its technology would end up in the hands of Chinese competitors.

The final Chinese suitor, Zhejiang Youngman Lotus Automobile Co,
pulled out after the last proposal for a solution was rejected by GM
over the weekend, according to Saab owner Swedish Automobile, Muller's
company which was formerly known as Spyker Cars.

Originally an
aircraft maker, Saab entered into the car market after World War II
with the first production of the two-stroke-engine Saab 92. It soon
became a household name in Sweden and in the 1970's it released its
first turbocharged model - the landmark Saab 99.

To auto
enthusiasts, Saab was known for its quirks such as placing the ignition
lock between the front seats and becoming the first car to have heated
seating in 1971.

The carmaker - which began life in 1937 as an
aircraft manufacturer, something which became evident in the
aerodynamic, sporty shape of its first concept car designs - was forced
to halt production in April as suppliers stopped deliveries over
mountains of unpaid bills.

Saab's some 3,700 employees, whose
salaries have been delayed five months running, did not receive their
November paychecks. Once the bankruptcy filing is approved, they will
be paid through a state wage guarantee. AFP