Dutch automaker Spyker NV has filed a lawsuit on behalf of its subsidiary Saab against General Motors for $3 billion, claiming GM blocked Saab’s sale to the Chinese to force Saab into bankruptcy.
Filed with United States District Court in Michigan and intended to cover compensatory and punitive damages as well as legal fees and interest, the lawsuit says: “When Saab found a way to secure liquidity and continue as a going concern with the help of Chinese investors, GM was determined to scuttle the deal by any means necessary, including the publication of false information about its rights under the parties' contracts."
GM spokesman Dave Roman told reporters the company intends to defend itself against these baseless allegations.
In 1990, GM bought 50% of Saab, and purchased the other half in 2000. In 2010, GM sold the company to Swedish Automobile, which was then called Spyker Cars. However, when Saab faced financial trouble, Spyker Chief Executive Victor Muller sought a buyer and found Chinese automakers Zhejiang Youngman Lotus Automobile Co to be among those interested. Spyker claims GM blocked the deal, forcing Saab to declare bankruptcy in December 2011.
Saab is currently in the process of being bought out by the National Electric Vehicle Sweden AB consortium, which makes electric vehicles. Meanwhile, Spyker retains all legal rights until the sale is complete.
The lawsuit against GM is funded by an anonymous third party, and GM has 20 days from the lawsuit’s filing date to formally respond.
Analysts say it will be very difficult for Spyker to prove its case and that GM has a strong defence, adding that GM may not have been fair, but their actions were not illegal. The situation is comparable to when Delta entered into a deal to merge with Pan Am only to pull out of the deal, leaving Pan Am with no choice but to file bankruptcy.
Key Statistics - World Automotive Manufacturing (source: MarketLine)
- In 2011, the global automotive manufacturing industry had revenue totaling $1.4 trillion; over 2007- 2011, this represents a compound annual growth rate (CAGR) of 2.5%.
- Between 2007-2011, industry-wide consumption volumes increased, reaching over 136 million units in 2011 for a CAGR of nearly 3.5%.
- For the five-year period 2011–2016, the industry is predicted to grow by a CAGR of 7%. By 2017, the industry should be worth $2 billion.