GM Sure Has Trouble Getting Rid of Its Losers

Last Updated Feb 25, 2010 11:43 AM EST

General Motors has had as much trouble getting rid of Hummer, Pontiac, Saab and Saturn as it had trying to run them profitably -- which is to say, a lot.

A deal for GM to sell Saab to Dutch boutique automaker Spyker Cars finally went through on Feb. 23. That was after a proposed deal fell though in November, to sell Saab to Sweden's Koenigsegg Group AB, another microscopic sportscar maker.

In my opinion, Saab is done for anyway. As much as I like the brand, it's too small to achieve economies of scale, and not prestigious enough to command the high prices that make economies of scale unnecessary.

It also seems to me that, despite the sale, GM is going to get dragged into Saab's ongoing affairs and financial liabilities more than either GM or Spyker would like. That's because Saab's products today are pretty well integrated with GM's Opel lineup in Europe.

Saab is not a standalone business, with all its own factories, engineering, design, and supplier base. When things start going wrong with the new Saab, and they will, it's going to be difficult for GM to stay away.

For one thing, GM will continue to sell parts to Saab. For another, keeping Saab on its wheels helps GM to spread its development costs over the largest possible volume of cars.

At least Saab got bought. That puts it ahead of GM's other discards.

A deal to sell Hummer to a Chinese manufacturer fell through this week and Penske's offer to buy Saturn disintegrated last October. As for poor Pontiac, once an iconic brand, no other manufacturer has even shown interest.

Having all this out in the open makes you realize just how thin the pre-bankruptcy façade must have been at General Motors, with then-Chairman and CEO Rick Wagoner insisting right up until his dismissal in March 2009 that every day in every way, things were getting better and better.