The first Saab prototype 92001 automobile sits on display at the Saab motor museum in Trollhaettan, Sweden last month.
Saab, which earned a loyal following over six decades with its stylish but idiosyncratic cars, failed to attract the buyer it needed most — a new owner for the company — leaving General Motors little choice but to announce Friday that it would shut down the brand.
Bigger car companies, which have been struggling with steep losses of their own, showed no interest because Saab was too small even though the brand is well regarded.
The last hope for Saab, which General Motors took control of in 1990, had been Spyker Cars, a tiny Dutch maker of high-end sports cars.
But some G.M. officials said that Spyker’s reliance on Russian financing for the Saab deal was a major factor in its decision to walk away.
“We discovered this week that there were issues that couldn’t be resolved and no additional time would overcome that,” said John F. Smith, a General Motors executive vice president.
He added that G.M. would still be willing to consider selling Saab if a new buyer were to emerge. If that does not occur, the process of winding down Saab will begin in January.
“I can’t rule it out, but the clock starts now,” he added.
Saab, which filed for bankruptcy protection in Sweden in February, has been a perennial money-loser.
It is among G.M.’s smallest brands, with sales of 93,000 vehicles worldwide last year, with just under 22,000 in the United States. G.M. also closed its Pontiac and Saturn brands this year.
Besides throwing the fate of some 3,500 Saab workers in Trollhattan, Sweden, into doubt, Saab’s expected closing also was more troubling news for Sweden’s industrial base.
Another famous Swedish automaker, Volvo, is being sold by Ford to Zhejiang Geely Holding of China. Both Volvo and Saab are based in the west of Sweden, and the region has a deep network of suppliers and contractors that will also be affected.
“This is of course a major blow to Sweden, though it wasn’t unexpected,” said Cecilia Werner, communications director for the Swedish Agency for Economic and Regional Growth.
She said there were nearly as many Swedes whose jobs were indirectly dependent on Saab as there were Saab employees. Moreover, she said, the company’s long history and distinctive automobile designs have made it part of the Swedish identity, especially overseas.
“They say ‘Ikea, Abba, Volvo and Saab,’ ” Ms. Werner said. “This company has been a part of Swedish pride, along with Volvo.”
In the auto world, as in Sweden, the announcement Friday was greeted more with sadness than with surprise.
Besides losing money for years, Saab was always on the periphery of G.M.’s empire. In the last year, management in Detroit had made it clear it wanted to dispose of the company.
In a conference call, Mr. Smith repeatedly declined to specify what problems came up during the due diligence process at Spyker.
An earlier deal to sell Saab to Koenigsegg, a Swedish maker of specialty sports cars, collapsed last month.
According to people close to the negotiations, G.M. was concerned about Spyker’s Russian financial backers as well as the fate of G.M.’s technology and other intellectual property under Spyker. The people declined to be identified because they were not authorized to speak publicly about the talks.
The main investor in Spyker is the Russian bank Convers Group, which is controlled by Alexander Antonov, a Russian tycoon. His son Vladimir, a 34-year-old banker who is a top executive at Convers, is chairman of Spyker.
Last month, G.M. pulled out of a deal to sell its European Opel and Vauxhall operations to a consortium led by Magna International, a Canadian maker of auto parts. The consortium was backed by the Russian state-controlled bank Sberbank.
“They’d been down the road with Russian investors before and that gave them reason for caution,” said one official, who insisted on anonymity because he was not authorized to speak publicly. “There was no visibility on when that might have been resolved.”
Another snag was the question of whether Spyker could qualify for a 400 million euro ($573 million) loan from the European Investment Bank that was part of the earlier deal to sell Saab to Koenigsegg.
A spokesman for Spyker declined to comment on the question of the company’s Russian ties, as did a spokesman for G.M.
In a statement, the chief executive of Spyker, Victor Muller, seemed to put the blame on G.M. for dragging its feet.
“We sincerely regret that we are not able to complete this transaction with G.M.,” Mr. Muller said. “We worked 24/7 for three weeks, but the complexity of the transaction in combination with the strict deadline simply did not allow us to complete the transaction.”
Saab will continue to honor warranties, while providing service and spare parts to current Saab owners around the world.
Nick Reilly, the president of G.M.’s European operations, said that the move was not a bankruptcy or forced liquidation, so he expected Saab to pay its debts, including those of suppliers. In all, 1,100 dealerships worldwide will be affected, including about 200 in the United States.
G.M. is taking other steps to further clean up its balance sheet. On Friday, it said it began repaying the money it owes to the American and Canadian governments. It paid $1 billion to the United States Treasury, toward a balance of $6.7 billion, and $192 million to Canada, which is owed $1.4 billion.
G.M.’s chief executive, Edward E. Whitacre Jr., said the company would continue making installments through June, when it would repay the entire balance, “assuming no downturn in the economy or business.”
Most of the $50 billion that G.M. borrowed from the Treasury’s Troubled Asset Relief Program was converted to a 60 percent ownership stake, which the government plans to sell in a public stock offering as soon as next year.
G.M. initially bought half of Saab in 1990 for $600 million, acquiring the rest in 2000 for $125 million. Under G.M.’s stewardship, Saab lost a large part of its Swedish identity as well as the technical prowess that earned it a loyal following in the 1980s.
“People will say they’re sad to see it go, but what they’re lamenting is the Saabs from the ’70s and ’80s,” said James Bell, executive market analyst for Kelley Blue Book.
“Since the mid-’90s it’s been a pretty irrelevant brand,” Mr. Bell said. “The only reason people would be excited about buying a Saab would be if someone was an enthusiast of the brand. And I think Saab was even pushing their patience.”
Terrorists fired rockets and arms at security forces patrolling in the area, which they effectively responded to. –File photo
