Press GM to cover warranties by Saab dealers eye parts firm

LAS VEGAS – In North America at least 25 dealers met with Saab Cars to discuss the formation of a parts distribution company and the disposal of 2,200 new cars remaining in Saab's dealer inventory.

The remaining Saab dealers are also asking General Motors to cover warranty repairs for 2010 and 2011 models. GM says it will only honor warranties up to 2009, before its own bankruptcy and disposal of Saab.

Leonard Bellavia, a Mineola, N.Y., attorney who is representing 165 Saab dealers said, "There's a groundswell of frustration over GM's conduct" prior to its 2010 sale of Saab to the Dutch sports car company Spyker Cars NV. "The sentiment of dealers is that GM knew full well that Spyker wasn't adequately capitalized and didn't have the experience to carry the franchise forward."

Ray Ciccolo, president of Charles River Saab in Boston, and the NADA line representative for Saab, said Saab dealers have contacted Massachusetts Senators Scott Brown and John Kerry to help "get GM to sit down with our dealers."

It was stated by Bellavia that dealers will use a Chapter 11 bankruptcy petition, filed last month in Wilmington, Del., as a means to "investigate the circumstances surrounding the sale of Saab by GM to Spyker."

James Cain, a spokesman for GM, said: "Since the bankruptcy we've done a lot of work to be sure customers can get warranty repairs and that dealers can get paid to perform the work. But our obligation ends with the last Saab car built by General Motors and those were the 2009 models."

In December, Swedish Automobile said GM blocked a last-ditch rescue plan by Chinese investor Zhejiang Youngman Lotus Automobile. GM objected to supplying parts and technology to Saab if China's Youngman succeeded with the acquisition of the Swedish automaker.
Saab Cars North America told dealers at a meeting that it will not contest their move to place it in Chapter 11 bankruptcy.

"We're not going to fight the bankruptcy," said Tim Colbeck, president of Saab Cars North America. "Our No. 1 priority right now is insuring the flow of parts to North America."

Colbeck said he told dealers that he would work with them "as long as I could help."

Dealers described the meeting with Colbeck as cordial.

Caterpillar Logistics Services Inc. is handling the distribution of Saab parts now, but "someone has to order the parts and maintain a relationship with dealers," Colbeck said.

Saab dealers have more than just parts to worry about.

The remaining Saab dealers have 2,200 cars left in inventory and Saab North America has an additional 700. Ciccolo said dealers are worried that if Saab Cars North America sells its 700 cars at fire-sale prices, that it will hurt the market for the remaining 2,200 cars. Dealers report the cars are selling at 35 percent to 50 percent off MSRP.Automobile News