General Motors Co announced it would begin shutting down its money-losing Saab brand after last-ditch talks to sell it to a small Dutch sports car builder collapsed on Friday.
The move by GM to abandon the 60-year-old Swedish auto brand would eliminate 3,400 jobs in Sweden and drop 1,100 Saab dealers who have watched with increasing concern as 10 months of talks to sell the brand sputtered out in recent weeks.
Swedish government officials and representatives of GM had been negotiating as late as Friday morning in Stockholm before the automaker concluded that it was not going to be able to conclude a deal to sell Saab to Spyker Cars.
Swedish Enterprise Minister Maud Olofsson blamed GM for not doing enough to save Saab during the 20 years it controlled the brand and its losses mounted.
John Smith, the GM executive who steered Saab negotiations, said trying to complete a deal with Spyker against the month-end deadline for a deal set by the GM board had been a long shot he compared to trying "to make a shoestring catch."
GM said it would shut down Saab operations, including its production hub in Trollhattan, Sweden, starting in early January. It said Saab would satisfy debts, including supplier payments and honor warranties.
Saab has been a consistent money-loser for GM. The brand, which attracted a following of loyalists for quirky hatchbacks with turbocharged engines, lost about $340 million in 2008 and had projected a similar loss this year.
Autos analyst Erich Merkle of Autoconomy said GM was spread too thin before it decided this year to retain only the Chevrolet, Buick, GMC and Cadillac brands. It couldn't give Saab the sustenance it needed to compete, he said.
Reuters has contributed to the report.
The choice of the city of Helsinki is not incidental as the capital of Finland had hosted US-Soviet negotiations on the limitation of nuclear stockpiles in 1969