Saab Moves To Separate From GM

Automaker Saab filed for bankruptcy protection Friday and has applied to be spun off from its parent company General Motors Corp., officials said.

An application to reorganize the Swedish-based unit was filed at a district court in Vanersborg, in southwestern Sweden, Saab spokeswoman Margareta Hogstrom said.

The move comes after the Swedish government rejected a request from loss-making GM to inject money into the carmaker. GM has been looking for buyers for Saab but said it needs more funding to put the brand up for sale.

"We explored and will continue to explore all available options for funding and/or selling Saab and it was determined a formal restructuring would be the best way to create a truly independent entity that is ready for investment," Saab's managing director, Jan Ake Jonsson, said in a statement.

The process is similar to a Chapter 11 bankruptcy in the U.S.

"Pending court approval, the reorganization will be executed over a three-month period and will require independent funding to succeed," Saab said.

On Wednesday the Swedish government rejected GM's plea for state funding for Saab, saying it was up to the U.S. automaker to save the brand.

GM said it needed about $6 billion in support from the governments of Canada, Germany, Britain, Sweden and Thailand to provide liquidity for its operations in those countries.

GM and Chrysler LLC, two venerable titans of American industry, will burn through $17.4 billion in government loans in three months and want billions more to stay alive.

The ink is still drying on their new requests for an additional $21.6 billion, but for President Barack Obama's month-old administration, there are no easy answers.

Click here to see the highlights of viability plans put forward by GM and Chrysler LLC to the Treasury Department in Washington earlier this week.