D-day for GM – where it’s at for Saab

It’s the 17th in the northern hemisphere and that means it’s time for GM to hand in their homework assignment as set by their old schoolteacher, George W Bush. Of course, he’s retired since the assignment was handed out and there’s a new teech in town, but that doesn’t mean GM’s off the hook.
Here’s a quick look as to where all the various players are at right now:
General Motors
They’ll receive the next instalment of their funding today, another $4billion, regardless of how complete their assignment is. I’m surprised some in the autoblogosphere are getting all antsy about this as it was part of the original plan. GM won’t actually be graded on their assignment until March 31. If they pass, they get a lifeline and if they fail they get their loan called in.
There’s some talk that one of GM’s proposals will effectively be a structured bankruptcy with the US government providing financial backing whilst everything’s reorganised. This will effectively kill off the dealerships and union worries troubling them right now, but it’s a path their reluctant to walk down due to the bad blood it would cause in the community.
As is traditional with anything big like this, GM will most likely wait until the stock exchange closes before submitting their report. That’s 4pm in New York.
General Motors Europe
There have been renewed calls for Opel to be spun off from the mothership as a separate entity. Given that Opel make up the core of GM Europe, you can pretty much say that the whole entity wants a separation. Taking Opel out of the group would leave the cheaper Chevrolet brand, which is growing, but isn’t enough to house all the design staff etc that having Opel allows.
Those calls for separation throw worries about protectionism out the window, by the way, with the German unions being very up front about their desire to see the state take control of the company.
Other plans state that GM are looking to close at least three plants in Europe in order to cut costs. Make that four plants if they dump a certain little Swedish manufacturer.
Saab are busily but quietly going about their business, which takes three main forms right now:
1) Continuing talks with the Swedish government about support for loans that GM are yet to apply for from the European Investment Bank.
2) Work to finalise the upcoming vehicles that will form the basis for Saab’s future, and
3) Somewhere amongst all this they’re still building and selling cars.
TTELA report that Jan-Ake Jonsson has been busier than a one legged man in an ass-kicking contest (my description, not theirs), formulating the desired plans for Saabs future. They report that those plans have been presented and that the ball is in the government’s court……..but…….
The Swedish Government
……the Swedish government are reported as saying that they haven’t received a satisfactory plan from GM (i.e. Saab) and that the ball is in their court.
The Swedish government are playing the role of guarantor here. They don’t actually have to hand out the money that Saab needs. That will come from the European Investment Bank. They will, however, under the provisions they passed some time ago, be providing guarantees for the money that’s lent to Saab. They have standards they want met before they go ahead and provide those guarantees.
GM say they’ve done the plan and the decision rests with the government. The government say they haven’t seen a satisfactory plan and the work rests with GM.
The state of play, then, is seemingly a stalemate.
One thing that’s important to remember here, is that despite GM having to hand in a plan to the US government today, that doesn’t necessarily mean that it’s D-Day for Saab. That plan will state intentions but the execution (pardon the pun) of those plans is still some time away. It’ll take the US advisory panel until March 31st just to grade them and make a decision about them.
Regardless of what’s said about Saab in that paper, Saab still have time to negotiate with the Swedish government and find a way to satisfy their requirements in order to obtain those loan guarantees. The sooner, the better, but the important bit is that today isn’t The End.
It’ll still be a big day once the news is know, but the full effects will not be immediate.
Saab have a bit of time, and they have what we believe to be great models in the pipeline. They just need to make the Swedish government see that, which they’re working on at a fever pitch.