GM Dumps Saab; Are Hummer and Saturn Next?

(MoneyWatch)  GM is officially dropping Saab Automobiles, after close to 20 years of failure to grow the quirky little Swedish car company into a bigger, more prestigious, more mainstream brand.

GM had Saab under "strategic review" but couldn't find a buyer. At the same time, GM is also seeking a buyer for Hummer. It is also downsizing the Pontiac brand, and it could drop the Saturn brand as well.

Swedish government officials were recently quoted saying that the Swedish government wasn't interested in bankrolling Saab, and that may have been the last straw for GM. With no alternative short of shutting down, Saab filed today for a Swedish court-supervised reorganization.

The company said its plan is to emerge as an independent company, but that's an awfully optimistic plan, considering Saab's small size, its inability to command a premium price, and the difficulty of unwinding Saab's long dependence on GM, including sharing product platforms with GM's Opel unit.

"After 20 years of foreign ownership, the future of Saab Automobile is once again in Swedish hands," the company said in a written statement.

"We are now recreating Saab Automobile as an independent unit. The road ahead will not be easy. Many have already suffered considerably as a result of the crisis in the automobile industry and sacrifices will be a part of our future, but after a period of tough decisions we will have laid the foundations for a new beginning," said Jan Ake Jonsson, managing director of Saab Automobile.

GM bought 50 percent of Saab in 1990, and the remaining 50 percent in 2000. Back in 1990, GM reportedly beat Ford to the punch. After "missing out" on Saab, Ford went on to buy Aston Martin, Jaguar and Land Rover, all of which it sold off in the present auto industry downturn.

Saab has never been more than a niche player in the United States, its biggest market ?€" bigger even than the home market in Sweden. Saab's U.S. sales record was just under 50,000. That was way back in 1986, which means Saab has missed out on two decades of growth in the United States for nearly every other luxury import brand.

It's hard to see how an even smaller Saab can survive without a bigger partner ?€" not that Saab was doing so well, even with a bigger partner. But it looks like Saab is going to try.