GM's Saab unit files for protection from creditors

STOCKHOLM -- The move is a last-ditch effort to get Saab in order for sale, but the danger of a collapse still hovers over the ailing brand because neither GM nor the Swedish government appears ready to provide enough money to keep it going as a freestanding entity.

An application to reorganize the brand was filed at a district court in Vanersborg, in southwestern Sweden, Saab spokeswoman Margareta Hogstrom said. It was approved later Friday.

GM, which is seeking help from the U.S. government to avoid bankruptcy at home, hopes the three-month reorganization process will put the Swedish brand into shape for a sale, GM spokesman Chris Preuss said. "We fully intend to be out of Saab by the end of the year," he said.

Preuss said $1 billion was needed to keep the company running, of which GM was ready to pay $400 million. The U.S. automaker had asked the Swedish government to guarantee the rest, but "the guarantees have not materialized," he added.

The Swedish government, which insists that Saab's survival is GM's responsibility, rejected the request because GM's business plan wasn't "realistic," Industry Minister Maud Olofsson told The Associated Press on Friday.

"I spoke to GM today and told them that 'you have to go through this and present a credible and sustainable alternative,'" she said after a news conference in Stockholm. "For that, more capital is needed. GM or someone else needs to provide that capital."

Managing Director Jan Ake Jonsson, said Saab Automobile would be recreated as an independent unit, adding it wouldn't be easy.

"Many have already suffered considerably as a result of the crisis in the automobile industry and sacrifices will be a part of our future, but after a period of tough decisions we will have laid the foundations for a new beginning," he said in a statement.