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Saab USA Studying Ways to Rescue Warranties

China’s Pang Da abandons plan to buy bankrupt Swedish brand.

by on Dec.21, 2011

Saab USA hopes to resume warranty coverage.

Saab officials are looking for a way to resume warranty coverage for customers who purchased the maker’s 2010 and ’11 products.

The maker announced yesterday it would be forced to suspend coverage for those who bought a Saab after the company was purchased from General Motors in early 2010. The Swedish maker declared bankruptcy on Monday after months of efforts to find a buyer who could save the cash-short company.

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Separately, the Chinese dealer group Pang Da announced on Wednesday that it had abandoned its efforts to purchase Saab.  Pang Da and the Chinese automaker Zhejiang Youngman Lotus had both proposed a rescue plan – but the proposed deal was vetoed by Saab’s former parent, GM refusing to allow its intellectual property to be transferred to the Chinese.

“We’re committed to develop a way to handle warranties for all owners of 2010 and 2011 Saab models,” Tim Colbeck, CEO of Saab Cars USA, told today.  The goal is to “reinstate (warranty coverage) as quickly as we can.”

But it is currently unclear how that can be accomplished in light of the parent company’s bankruptcy filing. The Swedish executors ordered a halt to warranty coverage shortly after the carmaker announced it would go into liquidation.

If there’s any good news it’s that neither Saab Cars USA and Saab Parts, the subsidiary that provides everything from spark plugs to replacement sheet metal, have gone into bankruptcy themselves.  Parts needed for warranty work or repairs for vehicles outside of warranty coverage will continue to be available, Colbeck explained.

Nonetheless, owners who purchased a vehicle since February 2010 remain in limbo, he acknowledged, adding that should they need repairs, “They can go to the dealer but at the moment we are unable to reimburse the dealer for the work so the dealer has the choice of whether to do the work or ask the customer to pay.”

Customers who purchased a Saab product prior to the sale of the brand by General Motors will continue to be eligible for covered warranty repairs, GM announced on Tuesday.

What comes next for Saab USA is equally uncertain.  The subsidiary has chosen to avoid the court-ordered liquidation route, if possible, according to Colbeck.  It has hired the financial advisory firm, Detroit-based McTevia & Associates, to decide what to do next.

Colbeck said he and his management team continue to hold out hope that a buyer will come in to rescue the assets of the 67-year-old Saab, though he conceded there isn’t much more time left for that to happen.  While the announcement by Pang Da closes another door Swedish government officials have noted they have fielded several preliminary inquiries from potential buyers.

Saab has not built new cars at its headquarters plant in Trollhattan, Sweden since suppliers began a boycott last March.  A small number of 2011-model 9-4X crossovers were produced at a GM plant in Mexico.  Production of the 2012 9-4X was put on hold pending resolution of Saab’s financial problems.

The executors for Saab have told dealers that all vehicles left in inventory must be sold “as is,” meaning no warranty coverage will be offered.

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