Despite slashing costs over the last few years, Saab Automobile AB is now being reported to have made losses of up to US$300 million during 2005, up from US$200 million in 2004. GM appear to be standing firm behind Saab but this result can only lend more strength to Jerry York’s arguments for GM divesting itself of the Saab brand.
Not. Good. News.
I’ll let Reuters tell the story:
The Handelsblatt daily cited company sources saying Saab’s loss widened from nearly $200 million in 2004, but a GM Europe spokesman said the company does not break out earnings for individual brands and would not comment further on earnings before its quarterly report on January 26.
The spokesman said Saab had its best ever fourth-quarter sales at the close of last year and its highest annual sales in Europe in 2005.
"Having its best year ever from a volume standpoint, having the 9.3 Sport Combi (estate car) for a full year, having the new 9.5 (sedan) and the 20th anniversary of convertibles for the 9.3 in 2006 should bode well for the Saab brand and we expect that we will continue to gain momentum," the spokesman said.
"There is no question that the company has got a commitment to Saab," he added, citing its progress in cutting costs and in launching a new model offensive at the brand.
GM Europe President Carl-Peter Forster said at the Detroit car show last week that if orders continued at the pace of late last year, Saab could boost volume by between 10,000 and 15,000 units. It sold 82,100 in Europe plus more than 38,000 in the United States in 2005.
"I think (for) Saab there is potential for a step up in the cycle of performance," Forster said.
Thanks to Stefan for the initial tip about the results….