Saab: Why Gm Sent In Its Ace Mechanic

After seven years, quality is up but losses are mounting

There is nothing like red ink to focus the mind. Mounting losses at Saab Automobile have prodded General Motors Corp., which owns half of the Swedish company, to send in top troubleshooter Robert W. Hendry as CEO. For Hendry, a close confidant of GM Chairman John F. Smith Jr., Saab's problem is one of basic math. Consumers buy only about 100,000 Saabs every year, even with heavy discounting in key markets such as the U.S. Sales need to hit 140,000 a year before Saab turns a reasonable profit. The latest losses: $64.6 million for the 1996 first half on sales of $1.5 billion.

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