GM selling Saab assets in Sweden?

November 22nd, 2008 · 9 Comments

As part of their efforts to gain as much liquidity as possible, GM have looked into selling off unrequired property, leasing some of it back in necessary. There were reports last month about them looking for a financial arrangement of some description with their own corporate headquarters in Detroit.

UK publication Property Week has a story today about GM doing some property deals and most notably for us, some of them are in Sweden:

JLL (Jones Lang LaSalle) confirmed that its corporate finance division had been appointed to advise General Motors on its asset strategy for its non-manufacturing sites in Europe, but declined to comment further.

The European headquarters of some of General Motors’ key brands, from Chevrolet to Vauxhall, could be put on the market.

The first property to come to the market is a Saab site in Sweden. The commercial offices of Saab are based in Gothenburg and Trollhattan.

It is likely to investigate the sale of the Vauxhall headquarters in Luton, Bedfordshire, in the UK, as well as other key properties, including General Motors’ headquarters on Sandyford Business Estate in Dublin.

The individual sales should raise between €5m and €50m (£4.2m and £42.1m) each. General Motors owns more than $43bn (£29bn) of real estate worldwide, including factories, totalling hundreds of millions of square feet.

Ummmm. Scary. Just a little.

I’m sure Saab acquired plenty of real estate in and around Trollhattan and Gothenburg over the last 60 years and I’m sure that some of that property is no longer used or necessary or could be operated on a leaseback arrangement if the property is sold.

As per the GM Media website, Saab currently has the following faciltites based in those two cities:

Trollhattan: Head office, product developement, manufacturing of Saab 9-3 and Saab 9-5.

Gothenburg: Design, Sales & Marketing, Transmission plant for Saab Automobile Powertrain AB

With all that said, having so little detail is a but unsettling. ny moves that loosen the ties between Saab and Sweden are distateful moves IMHO.

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Tags: Saab News

9 responses so far ↓

1 aeronaut // Nov 22, 2008 at 1:09 pm

What is the inside news on Mark Webber? Looks like he has been injured at a rally in Tasmania.
http://www.news.com.au/heraldsun/story/0,21985,24689370-11088,00.html
2 ctm // Nov 22, 2008 at 7:03 pm

Ehh… GM is burning billions every months. How exactly should the sale of a few small buildings for a few millions (if lucky, the real property market is cold) help?
3 ctm // Nov 22, 2008 at 8:39 pm

Uhm… Something changed here…

Not. Back to normal layout again
4 PT // Nov 22, 2008 at 9:53 pm

Agreed Swade, its not a good look but as CTM said, GM is in WAY bigger trouble than selling a few plants can fix. Besides, I’d guess that part of the deal would be that Saab (or others) remain as tenants in order to sweeten it for a potential buyer. The actual functioning businesses won’t be gogin anywhere. There’s also the possibility that some large entity ( the Swedish government) would buy the assets in order to settle the Saab business down a little.

On balance, I would see this as a finance-driven move designed to improve cashflow & increase liquidity.
5 Dippen // Nov 22, 2008 at 9:55 pm

ctm: that was the thing i was wondering to.

According to BBC, GM ( and the others) has until 2 Dec to present a cost cut plan in front of Congress.

So i guess maybe it is time to really cut the corners.
6 ctm // Nov 22, 2008 at 10:19 pm

Now I get it. By selling those properties, GM could renew the leases on the corporate jets for Mr. Lutz and Mr. Wagoner. Do’h.
7 Joe Lobo // Nov 23, 2008 at 12:43 pm

Right at the minute, GM’s top brass has to be seen as “doing something to salvage their business”. Otherwise congress won’t gi’vem a penny. Selling real estate assets in balance sheet terms means that there will be less exposure to loose any such assets in case there are some potential liabilities in future. That’s what most bean counters will tell anyone that owns/runs a business. So, trim it as fast as possible so that your sheet looks better and the loans can flow through !!! Disposing of RE assets also reduces your higher selling value. So, this may be not so bad after all but besides this, I don’t think there will be a rush of buyers interested in buying any motor car company right now. Even if the prancing horse maker of red cars was for sale, it’s bad and risky business !!!
8 Tobias // Nov 23, 2008 at 11:07 pm

Not a big thing really, I work with real estate and sale and lease back is comon. There is really no point of owning office space for Saab and GM.

The real estate is not good for the comapnies balance sheet so it is probably worth a look. The trouble is that the should have sold the office for 14 month ago…

They wont get much money today…
9 Joe Lobo // Nov 24, 2008 at 8:47 am

Tobias mirrors my points but also stresses as he is in the RE game, that measures such as these should have been taken and executed well before the current crisis is on top of everyone. This is a desperate move done by desperate people. Anyway, anything to make improvements is good !!!