LONDON -Swedish automaker Saab filed for bankruptcy protection yesterday and is looking to attract new investors after its troubled owner, General Motors, said it would cut loose the money-losing division as part of its vast restructuring.
Saab said it is seeking funding from private and public sources and that the reorganization, pending court approval, will be executed over a three-month period.
"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 Managing Director Jan Ake Jonsson said in a statement.
General Motors had warned of such a move when it laid out plans to Congress this week in an effort to get approval for up to $30 billion in low-cost loans.
GM said at the time that it wanted Saab to be independent by 2010.
Punting Saab into Swedish court protection is a final effort to prepare the brand for sale or spin it off into a separate company that isn't a constant drain on GM's cash. But the danger of Saab's collapse looms because neither GM nor the Swedish government appears ready to provide enough money to keep it as a freestanding entity.
GM hopes the three-month reorganization process will make Saab marketable, spokesman Chris Preuss said.
If not, GM says it will let Saab go and it might do the same with other unprofitable brands.
"We fully intend to be out of Saab by the end of the year," Preuss said.
Saab has made a profit only once since GM bought a 50 percent stake in the company almost 20 years ago and has continually struggled to draw customers to showrooms. GM now has full ownership of Saab.
Saab sales fell 35 percent to 21,368 vehicles in 2008 from the prior year. In January, sales plunged 46 percent from a year earlier to only 955 vehicles, less than even the much-maligned Hummer division sold during the month.
Stephen Pope, chief global market strategist at Cantor Fitzgerald Europe, said Saab's Detroit parent "oversaw the destruction of the Swedish car company's soul."
He pointed to Saab's 9-3 model as an example, saying it's a Saab body skin wrapped around the Vectra model of GM's mass-market brands Opel and Vauxhall.
"Did GM really believe that a potential Merc or Beemer buyer would have their head turned by a reskinned Opel?" Pope asked, referring to the Mercedes unit of Daimler and BMW.
Saab said its plan is to concentrate design, engineering and manufacturing in Sweden, which it will present to creditors within three weeks. Saab will continue to operate as usual.
Trollhattan-based Saab is not related to the publicly traded Saab, which makes aircraft engines.
GM shares, reflecting the dire state of the U.S. auto industry, closed at $1.77 yesterday, down 23 cents. During the day, the shares fell as much as 24 percent to $1.52, pushing through levels not seen in more than 70 years.
The Associated Press contributed to this article.