A federal judge has tossed out a lawsuit seeking $3 billion in damages from General Motors, accusing the U.S. giant of taking illegal steps that ultimately led to the failure of Swedish automaker Saab.
The suit was filed last August by Spyker cars, the Dutch firm that bought Saab from GM in 2010. Spyker’s effort was soon revealed to be underfunded and it quickly went looking for outside investors, including several Chinese companies that were interested in taking a stake in Saab or perhaps taking over the failing Swedish maker. But GM blocked the sale by refusing to allow Saab to transfer its intellectual property to the Chinese.
Saab’s only products, at the time, had been developed by GM and largely used the U.S. maker’s components.
“General Motors had a contractual right to approve or disapprove the proposed transaction,” declared U.S. District Court Judge Gershwin Drain, following a hearing in Detroit. “The court is going to grant a motion to dismiss the matter.”
The news comes as a serious setback to Spyker and its Chief Executive Victor Muller. The Dutch company had lost a significant amount of money on the failed effort to revive Saab, going so far as to briefly rename itself Swedish Automobiles. Muller reportedly lost millions on the deal, as well.
Earlier this year, Muller told TheDetroitBureau.com he was looking to a victory in court – or at least a settlement with GM – to raise some cash that could put Spyker’s own aspirations into gear. Since Saab’s bankruptcy, the Dutch firm has struggled to revive its own carmaking efforts, revealing a prototype sports car dubbed the B6 during last winter’s Geneva Motor Show.
While a GM spokesman said the maker was “pleased” with what it described as the “appropriate result” of the hearing, Muller later said he is “waiting (to) assess” what, if any options he and Spyker now have, possibly including an appeal.
Muller had earlier said that the hearing was a critical one that would perhaps give Spyker the leverage to negotiate a settlement with GM if the courts had allowed the lawsuit to proceed.
Long a major money loser for General Motors, Saab was one of four brands the maker decided to abandon during its bankruptcy, either selling or closing them off. In the end, GM shuttered Saturn, Hummer and Pontiac but sold the Swedish maker to Spyker which was backed by a European Investment Bank, or EIB, loan.
But the new owners found the situation more difficult than expected. It took months to restart production at Saab’s plant in Trollhattan, Sweden. And within months, the company had run up so much debt suppliers staged a boycott which shut down the factory yet again – a situation from which it would never recover.
Saab’s owners began searching for assistance, all the more so when the EIB froze its loan. It came up with a series of potential partners, including several Chinese firms. Among the most promising was Zhejiang Youngman Lotus Automobile Co. which aspired to become a truly global manufacturer.
But GM declined to authorize the sale which would have included intellectual property such as the design for the newest Saab models, the 9-5 sedan and 9-4X crossover. Efforts to convince GM the deal would not involve its intellectual property.
After repeated efforts to win GM over, Saab was forced into bankruptcy and declared insolvent in December 2011.
GM’s veto was the equivalent of “a sniper shot to Saab’s heart,” contended Ben Chew, Spyker’s attorney.
Ironically, most of the remaining assets of Saab have since been purchased by National Electric Vehicle Sweden, or NEVS, a new Chinese-Japanese consortium. The company says it hopes to start building an electric vehicle based on Saab’s old platforms which will be introduced into the Chinese market late next year.
For his part, Spyker CEO Muller has suggested his Dutch company may be able to use a new platform developed for Saab, dubbed the Phoenix, to produce its own new products. Whether that would be possible without funds raised by the GM lawsuit is unclear, now.