Saab Automobile declared bankruptcy Monday morning after a 9 month long battle for financing. The car manufacturer has been making cars for over 60 years but stopped production in April of this year. The decision for bankruptcy came after former owner, GM, rejected a rescue plan funded by China’s Zhejiang Youngman Lotus Automobile Co for the struggling car maker. GM still owns some of the technology licenses used in the Saab automobiles and the automaker was concerned that this technology would be used by their Chinese competition. The offer for support from Zhejiang Youngman Lotus Automobile was pulled after GM rejected the plan.
Saab created its first prototype vehicle in 1947 and built a small niche following. General Motors bought 50 percent of the car manufacturer in 1990 and the rest in 2000. Saab was sold to Swedish Automobile in 2010.
Swedish Automobile, Saab’s owner, said in a statement that “The board of Saab Automobile subsequently decided that the company, without further funding, will be insolvent and that filing bankruptcy is in the best interests of its creditors”, according to Reuters.
Swedish Automobile shares had been suspended but fell 71 percent when trading resumed on Monday morning. Saab employs around 3,500 employees but the effects of the bankruptcy will be felt by the suppliers as well.
