DBRS Comments on GM’s Saab Filing for Reorganization

DBRS notes that Saab Automobile (Saab), a unit of General Motors Corporation (GM or the Company), has today filed for reorganization in its native Sweden. These developments follow previous unsuccessful efforts by GM to have the Swedish government assume an equity stake in Saab or provide some other form of assistance. DBRS notes that Saab’s filing has no impact on the ratings of GM. The Saab unit has consistently incurred losses and is expected to continue to do so over the near term. However, Saab’s scale is relatively minor, as its 2008 total sales of 93,000 units accounted for just over 1% of GM’s global vehicle sales.

Saab’s reorganization filing represents an effort to ultimately create an independent entity. DBRS is of the opinion that this is likely modestly beneficial to GM, as it potentially removes a distraction from senior management of the Company and affords them more opportunity to focus on the continuing revitalization of the core GM brands and operations.

In 2008, Saab, according to estimates, incurred a loss of approximately three billion Swedish kronor. The unit employs in the range of 4,400 people; the majority of production is sourced in Trollhättan, Sweden.

Notes:
All figures are in Swedish kronor unless otherwise noted.

The applicable methodology is Rating Automotive, which can be found on our web site under Methodologies.

This is a Corporate (Autos & Auto Parts) rating.