Many in the auto industry, including Fiat S.p.A. CEO Sergio Marchionne have expressed skepticism about the audacious bid by Spyker Cars to buy Saab. Marchionne questioned the profit potential of serving a niche auto market, as Spyker is now in the position to do. “Marginal players will continue to be marginalized. We cannot build on hopes and dreams,” Marchionne said at an industry event in Stockholm on Tuesday. Marchionne made a bid for Saab last year as part of a package offer to buy Opel from Gm, but later retracted the offer.
The skepticism is mainly centered on the fact that neither manufacturer is profitable, and Spyker”s small size; they employ 100 people as opposed to Saab”s 3,400. Also, Spyker”s expertise lies in hand-made supercars, and they only produce about 40 cars a year at that.
Spyker is paying GM $74 million in cash, and $326 million worth of preferred stock, which will come to represent less than 1% of the voting rights in the new company CEO Victor Mueller is fully confident that company had the financing to support a three-year development cycle for Saab models.
Mueller himself noted the irony of the deal and had said that under a normally operating market, Saab would have been buying Spyker. He was optimistic though about the company”s ability to work through whatever needs to be worked through in order to bring the new company to profitability.
– By: Stephen Calogera
Source: Automotive News (Subscription Required)