General Motors Co will wind down operations at Saab, its money-losing Swedish unit, after a last-ditch attempt to sell it to small Dutch luxury carmaker Spyker Cars failed, the automaker said on Friday.
GM had been in exclusive talks with Spyker to sell the 60-year-old auto brand since December after an earlier deal with Swedish luxury car builder Koenigsegg collapsed last month.
GM said it would start an orderly wind-down of Saab operations. It said Saab would satisfy debts, including supplier payments and honor warranties as it begins to shut down.
Saab has around 3,400 workers centered on its production hub in Trollhattan, Sweden. The brand also about 1,100 dealers.
With the collapse of the Saab sale, GM has seen two planned sales of its auto brands fail and reversed a decision to sell another as the automaker restructures after a U.S.-government sponsored bankruptcy process completed in July.
Under new Chief Executive Ed Whitacre, GM had set a deadline of end-December to find a buyer for Saab with financing to complete the deal in place by that time.
Nick Reilly, GM's president for its European operations, said it had become clear that the talks with Spyker could not reach a deal under those terms.
Despite the best efforts of all involved, it has become very clear that the due diligence to complete this complex transaction could not be executed in a reasonable time, Reilly said. In order to maintain operations, Saab needed a quick resolution.
Reilly said discussions with Spyker and representatives of the Swedish government had continued until Friday morning.
He declined to detail the issues during due diligence discussions with Spyker that convinced both sides a deal could not be closed.
Spyker last year sold 43 of its luxury cars at prices of 200,000 euros ($294,200) and above. Its primary backers include Russian banking tycoon Vladimir Antonov and his Convers Group.
Saab has been a consistent money-loser for GM during the past 20 years. Saab lost about $340 million in 2008. GM has not released more recent financial information for the brand.
GM had been in talks to sell Saab to niche luxury carmaker Koenigsegg, with the backing of China's BAIC.
But the deal fell through in November, and GM said it would consider other offers until the end of the year.
Earlier this week, BAIC completed a deal to buy some assets from Saab, including the tooling and the intellectual property for older versions of the 9-5 and 9-3 sedans.
The Saab deal is the latest in a failed run of negotiations for GM on the brands that it had planned to drop as part of a U.S.-government directed restructuring that included $50 billion in aid.
First, Detroit-based dealership group Penske Automotive Group pulled out of a deal that would have had it acquire GM's Saturn brand in late September.
Then last month, GM's board shifted course on a planned sale of the company's European Opel unit, rejecting a deal that former Chief Executive Fritz Henderson had backed and helped broker.
A tentative deal to sell GM's Hummer SUV brand to a partnership led by Chinese machinery maker Sichuan Tengzhong Heavy Industrial Machinery has not yet closed and remains subject to review by the Chinese government.
(Reporting by Bernie Woodall, Soyoung Kim, Helen Massy-Beresford, editing by Marcel Michelson, Dave Zimmerman)