May 30, 2009.
Look, I haven't made a big deal out of this because that's not really my way. I like to make my point as best I can in a reasonable manner and let it sink in.
But in this instance, time is near and this is important. Hence, I'm publishing it again.
------
May 11, 2009
Longest intro in history....
OK. Before I get on to addressing my concerns, I'd just like to acknowledge the fact that some people here won't agree with my stance on Renco and their bid for Saab. That's OK. People have their opinions and they're entitled to air them and have them taken seriously.
But this is an important moment. Saab's bidders are being considered right now. Not next week, but now. And I've got pretty solid info from several sources saying that the Renco Group are one of the bidders, and quite possibly in with a shot.
This is a situation that I don't think I can let pass without covering some information in the hope that decision makers will know that Renco have some opposition in the marketplace.
And let me say right now that whilst I introduced Renco the other day as being the company behind the introduction of the Hummer to the consumer market, my opposition to Renco taking over Saab has absolutely nothing to do with Hummers.
Read on.
And to those who'd prefer just Saaby stuff, I hope to get back to that soon. But this is a moment in time that can't pass without comment.
------
A few days ago I revealed here at Saabs United that an American private investment firm called The Renco Group was one of the bidders to take over Saab.
Earlier today I posted some pointers on who some of the decision makers are with regard to Saab's future ownership.
Right now I'd like to address one of those decision makers - the Swedish Government - regarding the character of one of those bidders: the Renco Group. The more I've looked into this group and the man pulling the strings, Ira Rennert, the more uncomfortable I am with the possibility of Renco being successful in their bid for Saab.
A few dot points, all of which are a quick Googling away if people would like to know more.
------
-- Mr Rennert was recently listed at #57 on Forbes' list of the Top 400 richest Americans with an estimated nest egg of $6 Billion. Bear that in mind when you read some of the things that follow.
-- Renco is a private holding company owned by Rennert and it has interests primarily based in the following six companies - a partial holding in AM General (makers of the Humvee), Doe Run Peru, Baron Drawn Steel Company, Doe Run Company (US), Unarco Material Handling and US Magnesium. As a private holding company, Renco does not have to disclose as much financial information as companies listed on the stock exchange do.
-- Of concern are Renco's dealings with Doe Run (the US company), Doe Run Peru, and the predecessor to US Magnesium, which was called Magnesium Corp.
-- Additionally, there is a long history documented online of Rennert financing the growth of his operations via junk bonds, using bankruptcies to avoid obligations and abandoning stakeholders and responsibilities. BusinessWeek have a comprehensive history of Rennert's methods, written a few years ago.
-- Renco was ready to walk away from pension obligations for a steel mill it owned until the US government began to persue his private assets to pay for the pension plan
------
Some more detailed info.....
-- Rennert was once labelled as "America's Worst Private Polluter" by the Environmental Protection Agency in the USA.
-- His former company, Magnesium Corp, was fined $900million for environmental breaches in Utah, which he escaped by placing the company concerned in Chapter 11 bankruptcy:
In 2001, the Justice Department and EPA took action against Renco, filing suit against the company. The agencies demanded nearly $1 billion in fines, alleging MagCorp (a Renco Metals Inc. subsidiary) dumped toxic waste in ditches and ponds on the Great Salt Lake, Utah. The suit claimed PCB-laced sludge and dust choked the plant's plumbing, wastewater ponds, landfill and ditches, where contaminants were 12 times the allowed limit for accidental release. MagCorp maintained it was exempt from the federal Resource Conservation and Recovery Act, which requires companies to monitor certain kinds of hazardous waste. Magcorp declared Chapter 11 bankruptcy shortly after the lawsuit began and a federal judge allowed Rennert to restructure MagCorp -- now U.S. Magnesium -- which exempted it from previous legal liability
-- The key issue with Doe Run and Doe Run Peru is the pollution produced by these operations.
-- The US Doe Run operation is in a town called Herculaneum in Missouri. Several years ago, Doe Run had to purchase $11 million of real estate and demolish it to create a safe zone around what is the largest primary lead smelter in the US. Prior to this purchase, lead and other heavy metals were a significant presence on homes there.
-- The US Doe Run operation is now a much cleaner operation. Renco have learned lessons in making it a cleaner, safer operation, lessons they should have applied in Peru.
-- Doe Run Peru operates another lead smelter in a town in the Andes called La Oroya. The smelter actually started operations in 1922 and was sold to Doe Run Peru by the Peruvian government for a bargain basement price on the condition that Doe Run clean up the smelter. Doe Run responded by stalling any clean up efforts and the Peruvian government were helpless to force the issue as the smelter is the primary employer in the area.
-- A summary from Wikipedia:
The Blacksmith Institute has placed La Oroya on its list of ten most polluted places in the world, along with Chernobyl, Ukraine. In August 2007, it was reported that air levels of arsenic levels were 85 times more than the "safe" level, cadmium 41 times, and lead 13 times more. Water levels of lead exceeded the "safe" lead level (as established by the World Health Organisation) as well. A study by St. Louis University scientists found that 97 percent of children in La Oroya suffer from mental and physical deficiencies related to their exposure to polluted air.
-- I can highly recommend that you watch the following videos about Doe Run Peru and the situation in La Oroya. Some of Doe Run's activities in Herculaneuum are also covered.
Renco know how to fix the problems at Doe Run Peru. They fixed them at Herculaneum. Yet despite the fact that they asked for a delay in taking any action to fix the situation at La Oroya, Doe Run Peru was still able to return tens of millions of dollars to Renco in royalties and management fees.
------
The Swedish government has pledged to provide loan guarantees for the successful bidder and as such will have a significant influence over who is successful in the bidding for Saab Automobile.
The question the Swedish government must ask themselves is this: is this the investor that they wish to pledge money to?
Sweden has a strong commitment to managing their natural environment. In fairness to Renco, their recent record includes cleaning up a lot of their own mess, with a 97% reduction in emissions from US Magnesium since 1989 and a similar reduction at Herculaneum. But they made plenty of money before doing this, and there's still La Oroya.
Do Sweden want to commit loans to someone labelled as the worst private polluter in the US?
And do Sweden want to commit loans to a company with a long track record of using other people's money to return significant 'management fees' to the corporate parent?
Will Saab be able to stand on a platform of environmental responsibility with a corporate parent that has this sort of record?
I'd like to urge the Swedish government - and all other decision makers in this process - to exercise the utmost caution and ensure that they give the greatest consideration to this matter.
------
If you've read this far, thanks for your patience. I know this was a huge one, but time is of the essence.
Decisions are being made right now, and as this is a major concern for me as a Saab enthusiast, I felt compelled to use this platform to air my concerns.
some here say it doesn't matter who buys SAAB, but I say, as You and many among us, it does matter!
Thank You for taking your time to bring the facts to the surface.
Me
Thank you.
Saab and it's new parent will indeed need support to make it.
To be crystal, I will not buy a Saab if Ira Rennert owns, in whole or in part, Saab. Given his history (EPA, etc) and what he continues to do in Peru, he could have the best car out there, I won't support anything he does, ever. Lead contamination (science word for poisoning) of people and children is morally reprehensible. Few in modern history have been worse.
Google also says he was a close friend of Bernie Madoff. Figures.
After watching the videos, I am sick.
The more I hear about bidders like Geely and Renco the more I hope that Fiat was serious about it's interest in Saab. From what I've heard about the bidders, it sounds like Saab could do far, far worse than end up under a European Auto company with big plans and the sales growth to make them happen.
It is far better to have more information on all parties involved than to find out after the fact. As in human behaviour, we can ascertain future behaviours and practices based only upon past practices. And until Renco has a much longer recent history of ethical and responsible behaviour, I also believe this is one investor that must be given utmost due diligence before any pen goes to paper.
Richard
At least they know what a car is !
Let's just think about how they will manage the whole thing. And specially the premium brands with Lancia, Alfa, Saab...
And it's easy, Lancia is essentially a dead brand outside of Italy, but they could treat it as a Lexus-like brand selling tarted-up Fiats as as luxury cars and have a chance at coming back.
Alfa Romeo is in a great position to be a sportier, trendier, more stylish alternative to BMW selling eye-catching RWD sports cars that stoke the passions of their buyers. Compared to BMW the cars would come with simpler powertrains and fewer gadgets, sort of playing Ferrari to BMW's Porsche.
That leaves Saab to fight Audi with gadget-laden AWD luxury/sports sedans that may not be able to deliver quite the level of driving highs that the Alfas do, but they'd do so in a more luxurious, more practical chassis that still hauls butt in a straight line.
It would work a hell of a lot better than any other alternative future that I've seen floated for Saab.
And will probably never be the same if it gets under chinese ownership, with a realistic chances of moving the production line to China in the future.
My guess is that if SAAB wants to survive, they better avoid FIAT and Chinese.
A cooperation with FIAT, sharing some engines and tech, that's fine, but ownership, noooo...
This is the MOST important aspect as Saab enters the next chapter of their life - IMAGE, regarding the environment.
Green is in, and will be even bigger as we move into the next decade. The Swedish government needs to keep in mind what is best for Saab, not what is best for their next owner.
Very nice read, Swade.
Rennert really seems to be the terrible face of capitalism, just incredible.
Of the known investor groups showing interest in SAAB, it would seem like FIAT is the better alternative even though even under FIAT, long term survivability would be up to if SAAB is capable of performing financially.
The question really is if the winning bidder is going to give SAAB a genuine chance and support the company in the process of making this effort.
'Lead poisoning' is absolutely disgusting. I learned about what happens biologically to humans exposed to these types of levels of lead, when my Iranian chemistry professor described lead poisoning cases in Iran. It was Horrifying...
If somehow it ends up that Renco does win this bid, I will have to give them the benefit of the doubt as there must be some sound reasons as to why their bid was accepted. But I think that Renco also owes the community an honest "cards on the table" discussion on their past and what they are doing to change that. At first glance, it appears that Saab and Renco are diametrically opposed in both management styles and corporate ethos.
Richard
My first Saab love, the 9000 was advertised in the early 1990's as a environmently concious car - before ANYONE else jumed on the green brandling wagon.
I will feel strongly if they were to chance that standing.
I too want a green oriented brand that is different and actually means something.
After seeing the videos, ZERO benefit of the doubt from me. That went away with Doe Run Peru. Shameful and gross. They buy, no more Saabs for me.
Same with any Chinese company. I also care about human rights and the environment fiasco there.
I don't care how much is paid to GM, I care about Saab.
With the speculation on the pool of buyers, it is obvious this is only about MONEY and not the least about Saab.
http://www.sweden.gov.se/pub/road/Classic/article/117/jsp/Render.jsp?a=70273&m=popup&l=en
Note that all correspondence through the clerks office is official and for all to see.
With all respect, nobody is looking for perfection, but the party mentioned here is creepy and beyond the pale. Out of 27 reported groups, there must be an normal alternative.
Hard to get excited about Mr. Pollution, and Bernie Madoff's BFF. That itself could lead to Saab closing for many passionate saabistas will never buy from Rennert. Sorry mates, not me. Not ever.
And can imagine a sale to Geely could result in Trollhattan closing.
We want Saab to thrive under a good group. If not, it won't survive.
For those who say if Rennart buys Saab they wont buy a Saab ever again, do you seriously mean that? I kinda doubt it!
Zippy - I do mean it. I draw the line at supporting major polluters who poison children.
Neil +1 Absolutely +1
And yes, I am one of the "somes" mentioned earlier in the comments...
Another thought. If Renco can’t get Saab, then maybe they still can do something good. They can chase Saab into the arms of Fiat!
Might be worth finding out who Renco's big customers are. Clearly they are supplying product to a price and the customers also are displacing the dirty responsibilities. Sort of like buying a Prius, you get the feel-green factor but there's environmental costs to be worn elsewhere.
Let's not leave out that auto manufacturing, maintenance and operation is a bloody dirty business. We all buy into that unless you walk or bike it everywhere. We all draw a line somewhere and can only hope for, and support, incremental changes in the right direction.
History shows that there's no 'big leaps' as far as autos are concerned.
http://e24.no/naeringsliv/article3070931.ece
That would be ideal, assuming mr. Eker has a worthy financial background to support SAAB in the future.
Look out Trollhattan.
Better than Rennert tho.
We can only hope the suspense does not last too much longer...my bet is the finalists are NOT anyone we have dissected here.
@Rune - saw your last comment - happy to take THAT dialog out of here. Saabsunited is one of the very few places where I do not have anxiety attacks of late.
Time to mow my lawn...with my pushable Craftsman (Sears) mulching lawnmower, Briggs&Stratton engine.
Clown is 100% right.
10 men can build a hand crafted car like K-segg, but to manufacture a far more complicated car like a SAAB, 10 is enough, but it takes 10-20 years ;)
At least in europe small series cars need less effort (test) to get homologated, beginning with crash worthiness.
And if clown says the truth about K-eggs cars, I wouldn't drive the car longer than 20 min at a time, and inspected every plastic part in the engine bay every second day.
And to Renco; I have a plan A, to buy me a 9-5 by 2011, so if the new owner is not what I would like I'll switch to plan B, and I'll buy me a 96 or a Viggen, depending on the market.
Although now there is a real dilemma ......... Renco , Geeley or FIAT ...... ?????
One with clearly questionable business practices .... One with potentially corrupt business practice & human rights issues ..... One which wants to strip out the best bits and shut numerous plants in three countries
What happened to the Koenigsegg / Norway thing ....I thought that had some merit as far keeping the Brand and Engineering in Sweden ?
Then again... perhaps I am just a naive optimist!
If Renco buys Saab, most of you won't buy another Saab.
If Fiat buys Saab, in a couple of years probably nobody will be able to buy a Saab.
The Koenigsegg thing is likely just pie in the sky.
It doesn't leave too many options!
And yes, while I love Saab, my future as a buyer remains in doubt with this list.
If GM sells Opel to Fiat, it can probably kiss it's Opel built Buick model goodbye.
Good digging Swade!
I could not say that I wouldn't buy a Renco-Saab, but I would feel more comfortable with a grener owner... I'm with turbin that most around cars is a bloody dirty job if you take a closer look. If we all drove electric we might have double atomic power plants and so on...
Lets not get too critical with every potential owner that comes up for the most important point is that Saab survives. A green owner won't help if they close down Saab. And you might find a skeleton in everyones closet.
But as far as we don't know who are the final bidders there is also the question whose favourites they are. Maybe GM wants Renco for they could get the most money out of the deal and Saab wants another for their own reasons...all just digging in the dark.
IMHO the best thing for Saab would be something like that Magna-thing at Opel. One with the understanding and one with the money working together to get the best efforts.
E.24.se reports union officials to be pleased with the bidder left at this point.. Would they be happy with an investor like Renco?
Could we all please have faith in that Saab and GM select an owner that go best with Saabs vision?
Cheers/A very cautious Tom
"According to Annette Hellgren the union has got no objections to the interestes buyers.
-We think it is looking positive and hopefull. THE SUITORS ARE SERIOUS. It looks good from the unions point of view.
She gets support from the bluecollar unions Chairman Paul Åkerlund.
-We have every reason to be optimistic, he say."
A question Lady and gentlemen.. Does that sound like there would be bad companies bidding?
If even the unions are pleased the bidders should be good ones, right. Maybe we should really have more faith in Saab and their weight in the decision and stay optimistic...
btw: just read that several guys frpm GM management including Forster and Lutz just sold their GM shares. GM didn't hesitate to say that that is not because of a lack of confidence in the company... got my own thoughts on that.
I think (like with Fiat) you can only see the reason if you know the plan.
I think that you can't predict a private investor's moves like those of a large private equity firm.
Give the company the shadow of a doubt before axing it.
http://www.rencogroup.net/news/recent.html
And if they do not deal with these kinds of metals.. Well then someone else will. And god forbid somebody out there have Mag wheels...
No, I´m not saying that Renco would be an ideal partner for Saab.. But the Axe have been out for many of you and that is not realy fair before looking more closely into Renco´s business.
As many of you have said, you think that maybe Vattenfall would make an ideal partner.. Why? Do you know Anything of their business?
I can´t say that I believe Vattenfall to be the soundest environmentaly countious company. They get their energy from Wind, Water, Neuclear plants.. AND FOSSIL FUEL PLANTS.
Vattenfall has helped to destroy the german countryside and Made people move. And not long ago their aquired a Dutch energy company that gets almost all energy from burning of Fossil fuels..
I don´t even think that Renco is in on the bidding for Saab.. But if they are.. Look more closely before judging.
Tom
We do not know the last bidders or their intentions.
I agree that Mr Rennert way of running companies is not a good reading in any aspect. However, if you start digging around every company that you are buying stuff from I think you will find things in the same league as Mr Rennert. The clothes you are wearing, are they made by a child 7 years old. Are they bleached by people in india that is working barefooted in acid and likely not see their 40:th birthday. Nothing of that is ok but then we need to be consistent.
In 2008 Renco wholly owned subsidiary Inteva Products makes the picture a bit more clear..... Inteva aquried Delphi interiors in 2008.
http://www.rencogroup.net/news/archive_2008-03-10.html
And for you that have a 9-7X I can tell you that the intrumentpanel comes from Inteva..
http://www.intevaproducts.com/documents/Inteva_GM_TPE_21Nov.pdf
That's just a theory.
Phoenix - you're dead right there. Any investor is likely to have a few decisions they'd rather not talk about. These ones from Renco were so much in the public domain, however, that I couldn't see them and not say something.
They'll have a point of view, too, and they're welcome to express it here.
http://www.gt.se/nyheter/1.1565861/har-ar-de-tre-budgivarna-pa-saab
and an analysis:
http://www.gt.se/nyheter/1.1565891/jan-erik-berggrens-analys-av-saab-koparna
Most of you will probably have to ask google for a translation =) or wait until Swade provides one
Geely is belivable, Fiat as a late entry maybe (altough probably not), a German bank with GM behind just to get the EIB loans, well, how stupid do GM think the swedish goverment actually is?
I'm with Tompa, don't put to much faith in the article. There doesn't seem to be any clear source for it, either.
Fiat- Very late in the process.. I wonder if it´s not to late. Do have technical qualitys and Fiat and Saab gets along fine. If they are in, they have agreed to move 9-5 production to Sweden and 9-3 Convertible to Sweden.. That can´t be changed.
Bank bidding for GM.. Hardly.. Does Expressen think that JÅJ is completely stupid?
One of many reasons is Jan Erik Berggren ,the jurno who wrote the article is pretty much a Saab-basher.
I like Collin better
I trust Swade. What do you expect their web page to say, "We did it"? The articles are all by independent groups including Vanity Fair, Businessweek, CNN and BBC. They are notorious, the Peru situation is unbelievable, and every company does not do what this guy does. For me, this guy is evil and a terrible fit for Saab.
As to why they would be interested? He bought Hummer and made a killing by selling a majority of it a few years back. Same playbook here.
No need to rationalize, some here are turned off. Sources obviously had a HUGE moral problem to come forward. God bless em.
If Rennco ends up buying Saab, I won't buy a Saab.
None, I just wanted for people to have a look themselves. I did not say I want Renco as a buyer. I didn´t even think they were in on a bid. I just said that media sometimes overdo it in their commenting. It´s a way of selling papers. Renco has probably done alot of ill things but there are others acting just like Rennert.
On the final suitors..
My vote for a buyer now is Geely. I don´t want Saab/Opel in the same team again.. If it turns out Fiat will control Opel that is.
And before saying anything about chinese quality, communism, oil, inhumanity etc.. Geely is a private company and I´m sure that the owner is a capitalist and only vote for the communist party just because it´s mandatory.
Geely will have alot to gain in trust building vehicles in Sweden and keeping R&D for Saab in Trollhättan. They are smart enough and have the money enough to still be in the running.
The GM-China scared thing.
Buick being in China and having patents in China would make it imposible for Geely to copy GM patents. They can produce cars with GM parts.. And that would only make GM a profit. So why worry about that?
Let's hope Expressen is right.
I understand your point, my friend. As Karen said, Rennert is a particularly nasty fellow with a long history of being a creep. Others may be acting the same but I don't want them either. There are good people out there do things the right way. I just want to buy a new Saab from a group that doesn't make me puke.
I'm no fan of China due to human rights and unbelievable pollution and am very suspicious of state owned firms. I don't know much about Geely but some of the other auto firms have very poor worker and safety records.
We are not in opposition, we both love Saab.
Geely would buy Saab with the help from a bank and maybe a private financier. And as it now has surfaced Geely does have monay to spend. And they do not get help from the chinese government as state controlled Chery does.
Surely Saab surviving and continuing to produce great cars is the priority.
I am pretty sure if you look hard enough at anything or anyone, there will be negative things, but on the other hand, Saab still exists.
Having said that, go koenigsegg!!
Come on people... chant with me.
preaching from their high horse
I disagree with your view, my friend. That's no surprise. I won't call you names or demean you for your views. Buy a Saab from Ira Rennert, that;s your choice. I won't, thats mine.
@vagabond This Old Lady asks, how do you know how much they have and are willing to commit to Saab? Just guessing? Renco has a history of bleeding their investments, not investing heavily in them. Check the bankruptcy record, my friend.
fair comment?
@VBond Nobody (including you) knows who is willing to step up with anything approaching $500M and, in the shape Saab is in, I don't believe many would. Even JanAke has commented on Saab needing to be wise with money. This old lady agrees with management.
With all due respect SWade, only media sources writing about Renco Group are quoting unanmed source. which could be you.
having a still open mind, will wait to see what happens, if only to avoid None repeating his 'never again' position, which he is entitled to have. Personally, Audi lost me when they became official luxury car of the New York Yankees because of the park destruction and willful disdain for local residents surrounding the new Yankee Stadium.
Until we know with certainty who the bids are from and what that means for Saab, maybe having an open mind is the Saabish thing to do.
Go see Terminator Salvation - puts what is happening in the real world in perspective PLUS a Saab 900 is the first auto relic destroyed by the machine at the 7-11 in the desert...
I have lawn to mow...
Comment edited - deemed offensive - SW
Karen, I guess we old ladies are sub-standard. Don't need to repeat the position - only did so on this Renco repost. I did revisit some of Swades posts here and am sick again with Peru, but I alway got sick with kids dying and all.
Karen, I guess we old ladies are sub-standard. Don't need to repeat the position - only did so on this Renco repost. I did revisit some of Swades posts here and am sick again with Peru, but I alway got sick with kids dying and all.
'None' if you're so sick of kids dying, I suggest you park your Saab, like I did, in front of one of those abortion racketeers mills and say some prayers.
But it gave me an understanding what Renco is about.
Good reseach Swade.
Good writing.
Can see the moral conflict with the green-wishing saab-brand arise.
But I guess (good) morality will play just a minor part in the whole bidding-proces.
But does bad personal greed & moral disapprovable behaviour affect a brand directly? Well if you stick your nose into the daimler-benz history, BlueTec will loose it green sympathetic character fast. The same goes for BMW's efficient dynamics.
Surely Saab jets dropped bombs somewhere sometimes.
It is not all black & white.
If you want some perspective - this is the first time I've felt motivated to have a word with a fellow commenter in nearly 5 years on this blog. Lift your game.
If the email address you've used to comment is a real one, then please check your email. Please also check the "About Comments" entry I've just posted on site.
Others, I'd thank you if you leave this issue alone now, please.
Sure Hope the Government has paid attention to this thread.
Thanks Kroum.
And if that were to happen, it wouldn't have been to do with anyone else. Your comments are up to you.