I wrote last week of my opinion that the battle for Saab was basically down to Renco and Fiat.
That was before the Opel decision. And I think that Opel going to Magna basically takes Saab out of Sergio Marchionne's calculations. Saab would have made a nice compliment to Opel if he'd got his hands on the German manufacturer. It would have given him a premium, though small-ish, dealership network in the US and some extra value in terms of cars that had tie-ins with other cars he'd be building already. Now it'd just be a whole lot of extra red-tape and negotiations for little extra margin, and that's not what Serge is about.
I think Fiat's most likely out of the game now. But that's just my opinion.
So bar any epiphany that sees Deutsche Bank go back to previous bidders that might have been good for Saab, that would suggest that Saab is Renco's for the taking. Renco have storm clouds hovering, though, and that's as good a reason as any to hope that Dagens Industri were telling the truth last week when they said that Koenigsegg are working like a one-legged man in a butt-kicking contest to prove that they are a viable buyer for Saab.
So here's a few thoughts about the whole issue about GM, selling Saab and selling Saab to Koenigsegg in particular.
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GM Bankruptcy
Today is most likely GM's last day as the company we've all come to know and love. Or whatever. Tomorrow (Monday June 1st), Fritz Henderson will do whatever it is that head honchos do to enter Ch 11 bankruptcy proceedings and GM will be changed forever.
Talk to Saab executives in Sweden and they'll tell you they're not totally sure how that's going to play out, but they're confident it doesn't mean there will be large scale (if any) effect on Saab's current process.
Saab have funds set aside for the rest of their reconstruction and these are accessible to their administrator, Guy Lofalk. They have increased orders, will be ramping up production and will move production of the convertible back to Trollhattan in the next few months.
So all should be OK, but then again GM did throw a few curve balls into the Opel negotiations, didn't they?
One bankruptcy lawyer in Sweden raised concerns that GM wouldn't agree to Saab's debt reduction requirements once they (GM) are in bankruptcy, saying they'd want to recover every penny. I'd point you towards Greg Abbott's wise words on that issue. In summary, if GM were in liquidation, that might be the case. In restructuring, it shouldn't be an issue.
Selling Saab
I don't know about you, but I'd feel a lot better if they'd hurried up a little and got this process over and done with prior to GM going tango-uniform.
Prime Minister Fred Reinfeldt's recent words wouldn't have made potential investors any more confident either.
Swedish carmaker Saab is in a difficult position after being left out of the deal by General Motors to sell its German unit Opel, Prime Minister Fredrik Reinfeldt was quoted as saying on Saturday."I believe that anyone who has followed this closely realizes that this is a very vulnerable and difficult position that Saab is in," the local TT news agency quoted him saying.
Actually, the fact that he came out as he did, after several weeks of confidence-inspiring words from other Swedish officials, was quite a surprise. To use his own words, anyone who has followed this closely would have known that Fiat were outsiders to get Opel, and that Fiat were the only bidder for Opel that was interested in acquiring Saab as part of the bargain. So it was always odds-on that Opel and Saab were going to end up under separate roofs (rooves, roofii???).
With the Swedish government most likely to be required to provide loan guarantees, Mr Reinfeldt's words ring like a hollow note of no confidence in the rest of the bidding field.
Koenigsegg
The rest of the world read DI.se's report on Koenigsegg and all they saw and reported on was the headline. Koenigsegg are in the process - cool!
It is cool, but there was more to the story than that.
First of all, the Swedes want a long term owner for Saab. I can't see Koenigsegg being anything but long term. Anyone who wants to get into Saab and flip it in a few years better have some deep pockets. Koenigsegg are car builders. They will want to build cars. Plus, if they ditched Saab for whatever reason, their own people would hunt them down and do bad bad things to them.
Secondly, they're professing in that story to have a very solid consortium of financiers to get this deal done. I don't know how much it will take to carry Saab through until new models arrive, but Koenigsegg should know that by now and they're still in the game.
One thing that's been raised in comments and in chats that I've had with various people off-site, is the concern as to whether Koenigsegg will have the international big business skill set needed to run a company of Saab's size.
Apparently Koenigsegg sold less than 20 cars in 2008. If I recall correctly, Saab can build around 27 cars per hour in a normal day. Whilst I don't believe this difference in scale is an issue in ongoing manufacturing terms (Saab management can run a factory efficiently) I do still believe that there are other scale issues to worry about - and these are the things that I hope Koenigsegg are working on.
Making 150,000 cars and selling them on all major continents involves a lot of international exchange, a spread out dealer network and a bucketload of finance needs. Saab may have done this themselves in the past, but it was probably a long time ago. Those big back-office tasks were assumed by GM some time ago and if Koenigsegg are going to take over the reins, they're going to have to hit the recruiting offices pretty quickly or make use of whatever high-powered networking contacts they've made in the last few years/months/weeks.
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The upside to them being able to pull this off off would be huge. As the DI.se article mentions, a strong Swedish bid would be a dream outcome for the Swedish government. But is the Koenigsegg bid a strong one?
It'd be a dream outcome from a marketing point of view as well. The positive bounce Saab received just from the Koenigsegg breaking cover last week was just huge. You've all read Saab reviews in the last few years, right? Just the absence of negative GM references would be a bonus in itself, even if they're not replaced with saliva-inducing K-Segg references.
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I still believe that if the players today are Renco and Koenigsegg (I think the Chinese have bailed or just aren't being seriously considered) and there's no extra-big backers behind Koenigsegg, then Renco might win the day.
But I'm praying, collecting rabbit's feet, four leaf clovers and doing anything else I can in the hope that this isn't the outcome. I'm sure I can learn to live with Renco if I need to, but I'd rather not cross that bridge any time soon.
My head says Renco, but my heart flies with the hope that Koenigsegg can work hard, get the right people involved, and build a great, Swedish car company.
"However, Marchionne said on Friday Fiat was interested in seeking a deal with Saab if its Opel bid failed."
Automotive News Article
Fiat and Renco should join forces and go and buy Saturn, Daewoo, Holden and GM South America.
Saab management - They go with anything but GM and are willing to try it alone for a few years with a wealthy owner. But in the end, I guess they want to be part of something bigger to be able to share costs.
GM/Deutsche Bank - They want some money out of it and would gladly trade the debts against production of guaranteed production of 9-4X and 9-5 containing lots of GM parts and juice license agreements. What happens after that is of absolutely no interest to them.
Swedish Government - They want someone who can guarantee jobs in Trollhättan, preferably without requiring too much EIB loans. Exactly what they produce in Trollhätten is of no relevance - just keep the plant going, please.
Personally, I couldn't care less about supercars.
But I think, Koenigsegg could decisively contribute to the making of the NEW SAAB - in terms of image, in terms of technology and in terms of attitude.
I'd really like to see them involved.
What is unknown to me is the answer to the question, who is behind Koenigsegg.
Who are these investors, what are their long-term intentions, how much can and how much do they want to invest?
For SAAB, the decisive question is: Will our new owners provide us with the funding we need to bring the brand back to rentability - and then, to take all the steps that will be necessary to meet the challenges of a rapidly changing industry?
In ten years from now, the car industry will be different. New technologies, new distribution channels, new mobility concepts - all these things will need a new way of thinking - and they will cost a lot of money.
I really want SAAb to be still around then.
I hope, the new owner will meet these challenges.
http://watch.bnn.ca/headline/may-2009/headline-may-29-2009/#clip177868
Just forward to 3:54. The interviewer mentions SAAB and then Marchionne says just one or two words about SAAB.
And I love me an underdog. Go Koenigsegg!
His connection and stubordness together with Saabs management and staff skills will make this dream come true.
Renco? Well hopefully not, but I can´t say that I would hold any grudge towards Saab but still support the brand and it´s new birth. Or should I say, this continuation of what once was the right route.
All is well in the kingdom of De..Sweden.
Cheers/Tom
And he does not want that.. now does he?
Go Christian!!!!!!!!
Depends on what you mean about underestimating Saab. They have been saved by others that last 40 years. And I guess most of us do not underestimate Koenigsegg as such. They have done one heck of a job. But there is more to it than just scrape together some money with optimistic business plans to be able call oneself owner of Saab Automobile. I want a long-term solution, not just some rich people looking for an exciting project - but in a few years time reality hit because the optimistic plans didn't come true and then Saab is once again up for sale (or, even worse, has been raided of all that's worth something). I think some sound skepticism is healthy. The Swedish Government sure had that, and that is because they know how it looks like. That's why they met with GM and US Govt. already in January about it. Then one can always argue about how the Govt. should have acted earlier this year knowing how it looks like at the moment, But again, they have seen the books and know about the mess behind the GM curtain.
Another important issue is the EU directive that new cars should average 120g CO2/km in 2012 or something. Undoable for K on its own, but with Saab they could achieve that.
For Renco I don't have a clue what they would get from Saab. No synergy, no shared tech/costs. Why would Renco buy Saab? I can only imagine that they'd split up and salvage Saab.
From Reuters:
Majority of GM bondholders agree to swap
http://www.reuters.com/article/newsOne/idUSN3044658620090531
Cheers/Tom
@saabista63: I do not think it will take ten years for the transformation you describe. happening now.
the wild card is whether people buy and keep longterm in a totally new pattern, especially in the U.S.
@tompa - that bondholder agreement enables the Government Motors restructure to proceed, assuming there are any bankruptcy lawyers still left in New York...so many already committed to Lehman Brothers and Chrysler.
as to K-egg? I finally saw photo of one of their cars. will deploy all my mental powers to make them the winner.
in the end? perhaps much ado about nothing.
We can all argue the merits for and against the finalists. I am not in favor of either as both have strengths but huge weaknesses. K-Segg is cool but realistically, can a company that makes 20 cars a year buy a more complex Saab? Doubtful. Are K-Seggs investors committed long term? Doubtful. Can Renco escape their environmenal legacy? Doubtful. Does GM care about the weaknesses? Doubtful.
We have endured a flawed owner for 20 years. I don't want another one. In the end, all we here can do is make a choice on buying a Saab.
Their job is to get repaid and $500 million is alot of money.
On the downside, I doubt that GM will sell Saab to Fiat.
Swade, did you meet JAJ when you were in Trollhattan?
I hope GM C11 filing will not affect Saab in any way! *crossing my fingers, toes etc that it wont*
I don't even see the need for Koenigsegg to do that much. Ok maybe facilitate dealer network, etc. But Saab is a little powerhouse. Marketing is genius, they just need to consolidate and use the same marketing everywhere. ETC.
I'd go more into it, but yall know just as much as I do..and I'm off to work.
:D
Every available finger and toe I have are crossed for our little orphan child.
I doubt they are interested though.
I wish they were interested.
The world needs different vehicles for unique people!
I see Fiat's interest in GM's Latin American operations the same way I saw Fiat going after Opel: buy a major competitor using as little cash as possible and then slowly break it apart piece by piece. Either that, or Mr. Marchionne has a very strange desire to have a brand positioning nightmare in his hands.
Here's hoping..
Fiat has been mentioned as the third suitor which would be a darn sight better than Renco but I still would love to see a Scandinavian solution. I reckon there is some seriously rich Norwegian out there with a lot of cash...yeh baby! :)
GM changed their stance on Saab a few years ago after Bob tried his pet theory and failed.
After that, GM, low on cash, made some major investments in a new product program for Saab.
Crisis hit, and GM had to depend on government loans .. and the government couldn't use US tax payers money to support foreign affairs .. Saab and Opel was left out in the cold.
Swedish law allows companies to apply for "rekonstruktion", which protects from creditors, but allows the management to continue to run the business. German law doesn't.
GM, "surprised" by the Saab managements move, decides to grant Saab a $150 million loan to see them through reconstruction. They also make sure that major creditors gets paid in full, ensuring that GM has more than 75% of the claims.
Saab gets a lot of interested buyers, and gets an extension to their reconstruction .. the end date far beyond the point when GM will have passed it's chapter 11.
I hope I'm wrong. Fiat would be a lot better IMHO.
Renco are famous for buying struggeling industry and turning them over for a profit in a few years. That is exactly the oposite of what saab needs, as some earlier have mentioned. They need a long term and enthusiastic investor that want to continue invention and development to make SAAB a part of the automotive future. Hopefully they'll be able to develop saab as a more uniqe platform than the opel based structure they are running now. So if it stands between Renco and K-egg, I have no doubt what I wish for....
I'm firmly in the Koenigsegg camp. Global consolidation of the car market is creating room for unique, smaller players -- the big companies are inherently unable to create unique and appealing model lines (or sustain them if one manages to get out the door). The temptation to standardize across all manufacturing lines is too great.
The idea that Saab needs to be part of a big car company in order to survive is late 20th century thinking. Micro-branding is where it is at -- that's how to sustain a brand image.
Many here have remarked on Saab's ambition to be the Apple Computer of the car industry -- an excellent goal. Koenigsegg is perfect for that scenario. Such a scenario is inherently unlikely if Saab is part of Fiat. It would be GM all over again, with an Italian accent.
IMHO.
I totally agree with you that a new owner is the first hurdle our beloved car maker faces and it will be an uphill battle that is only exacerbated by the current world financial situation. I do however feel we as Saab owners and enthusiasts need to back whomever is selected as Saab's new owner. Yes, each potential bidder has weaknesses and strengths and we have to have faith in GM (we'll see), Saab management and the Swedish Government that the right long-term buyer will be chosen.
Greg, as usual, had a good point that Saab needs to micro-brand itself. Its that "Find Your Own Road" all over again! :)
For a start, they're Scandinavian. Secondly they are responsible for Scandinavian icons, Kegg cars inc. the very SAAB quant, Hydrolift, Stokke and Projectiondesign. If the rumours of others involved in the consortia are true, then there are more iconic designs and ideas to add to that list. Kegg, Eker and crowd for sure will have a very strong view of what SAAB has, can and should be. I have no doubt that view will result in cars that will suprise and delight hardcore SAABists and seduce would-be SAABists. I could go on and on but I believe that the SAAB spirit is more reflected in this consortium than any other I could dream up.
"It's time to turn the industry to a more enviromental direction.
Build a society free of gasoline cars.
Buy SAAB and Volvo."
http://www.eker.no/images/stories/PDF/artikkelua0914.pdf
Atleast he proves high ambitions and a sense of direction. Let's all hope they can get this thing going.
1. Cut all ties I have with the brand
2. Not buy another one so long as they own the business
3. Make sure everyone I know doesn't buy one either
Ira Rennert is a scumbag
1) The eventual result may well be that "someone/something else transpires. I can't really see GM using US Govt funds to float SAAB along but stranger things have happened. DeutscheBanks role is yet to really be seen too - in my estimation.
2) I too have a lot of confidence in Koenigsegg & their associates. I'm not familiar with any of their financiers or partners but they have built a hell of a car that matches anything else on the market, including the Bugatti Veyron which is after all, a vanity project for VW and Ferdinand Piech.
3) K-Segg are good at carbon fibre but.....the body work on their recent Edition model which features exposed weave under resin was done by a British aerospace firm.Its an amazing piece of work where all of the weave matches in a symmetrical line right down the centre of the car. The fact that they outsourced this to the right people and got a brilliant result tells a lot about their management.
4) I have a vested interest in K-Segg owning SAAB. At dinner with friends recently, my wife declared that if they are the successful owner and then go on to make some outrageous, carbon fibre super car we MUST have one. I nearly fell off my chair. How we will pay for this is not quite clear at this point..........
5) Shame that BMW are not in the game. They seem to be tied up with Daimler these days but SAAB could have been a nice fit.
6) +1 Richo.
The sales numbers remain ugly and the prospective buyers had better know what they are doing. The task ahead is quite challenging.