Food Chain Reversed: Sweden's Koenigsegg to Buy Saab

(MoneyWatch)  Here's another example of "The World Turned Upside Down": General Motors announced it has reached a deal to sell Saab to Koenigsegg Automotive AB, a tiny, Swedish boutique maker of high-performance sports cars.

After more than 20 years of writing about the auto industry, I thought it was impossible for there to be a car company I never heard of. That's no brag. Unfortunately, my duties used to include covering would-be importers from Third World countries that never sold car No. 1 in the United States.

But I have to admit I never heard of Koenigsegg until a couple of years ago. I was writing a "World's Fastest Cars" feature story and discovered that Koenigsegg ?€"- which has not been available in the United States -- was right up there with household names like Porsche, Ferrari and Bugatti when it comes to acceleration and top speed.

Koenigsegg Automotive is named for its founder, Christian von Koenigsegg. He started the company in 1994. In 2000, Koenigsegg launched its first production car, the CC 8S. Koenigsegg Automotive may be tiny, but since then, no "Worlds Fastest Car" discussion has been complete without it.

Having said that, it's really, really tiny. Koenigsegg says on its web site that the company can produce up to seven cars at a time. That's the "World Turned Upside Down" aspect of Koenigsegg buying Saab. Saab is tiny in terms of global automotive brands, but it looks like a whale next to Koenigsegg.

Key to the deal is an expected $600 million funding commitment from the European Investment Bank, guaranteed by the Swedish government. GM is also expected to help support Saab's operations and investments in new Saab products that are already in the pipeline.

Saab filed for reorganization under Swedish Law in February 2009, in a process that resembles U.S.-style bankruptcy. Pending that outcome, the sale of Saab is expected to close by the end of September 2009.