Some post-Opel analysis about Saab from Sweden

Bad environmental record indeed. Looks like Rennert's lifes work is catching up to him in the Sweden press. This is what I mentioned the other day. Many will associate the environmental villain with Saab and it may hurt Saab. A huge competitive disadvantage.

While I like their cars, I agree Koenigsegg lacks the experience to handle a large scale entity like Saab. No idea who they have backing them but the skills aren't there.

SAAB needs new ownership. It does not need new management.

Comments from Swedish PM Fredrik Reinfeld:

As a consequence of GM now selling Opel as a separate unit, any new owner of Saab must be prepared to take on major commitments, says Prime Minister Fredrik Reinfeldt. He calls Saab position "fragile and difficult". Reinfeldt points out that the issue of writing down Saabs debts is up in the air, and that the government always said it is seeking a long-term owner of Saab.

white knight time!

it's good to have opinions, desire, direction et al but at the moment SAAB need someone to put money on the table.

alas i do not have that amount of money.

don't let that depression streak from Swedish media get you down. Get some sunshine guys.

Agree with Rob ownership is not same as management. does anyone here really think it will take GM-free Saab 4-5 years to launch a new/smaller 9-3?

"Saab has been working for months to find a new owner."

I'd rather see this process than a hurried affair. Saab Auto has history taking the small company route and most recently the giant company route ... I guess they need something in the middle OR a large company that actually cared to develop the marquee. Even if ths was originally GM's intent, it would be hard for them to do this when they have been bleeding with labor induced financial distress for years.

Readign the local paper and then this article ahs concluded in my mind that Magna and other investors in Opel WANT SAAB to DIE! Saab is a primary competitor to the Opel brand! Insignia! Vectra! Astra! All great cars from Saturn here. Why would a brand want to jeprodise themselves by allowing another brand in its own house to steal sales volumes from itself. The only reason they would want saab is if they could make money from the chassis and part business from the new owner!

I do not quite understand the concern about writing down Saab's debt to GM. While getting any additional money out of GM won't happen, the GM bankruptcy trustee will realize likewise that squeezing money out of Saab for those debts is also nearly impossible.

If this were a liquidation, and the trustee did not have any time constraints on recovery of debts, I could see a situation where Saab is hounded to the end of time for its unpaid debts to GM. In that scenario no one in the US would care whether Saab survives, the trustee's only concern would be maximum recovery.

But this is a reorganization not a liquidation. The US government wants the new GM to be able to function, and maximizing its revenue stream is key to that. Now, which do you think is more beneficial, spending forever to recover old debts, or leveraging Saab's future needs for GM parts to help amortize existing tooling and equipment? Plus the government wants this reorganization to happen quickly, so much so that it is arguably ignoring the legal rights of the secured creditors to early repayment. The longer the Saab debt issue lingers, the more complicated and longer the bankruptcy gets, which is exactly the opposite of what the Obama Administration wants.

I have a hard time envisioning a scenario where Saab's old debt to GM becomes an obstacle to completing the reorganization and sale.

Unless Magna now buys Saturn, I can't see how it will be able to sell any Opels in the US. Buying Saturn would now be far more important to it, than buying Saab.

I don't know why anyone would consider Fiat a dream buyer for Saab now, when in all likelihood it just wants Saab to gain access to Saab's US dealer network so it can relauch the Alfa Romeo brand in America. I'm guessing it would just keep Saab running long enough to achieve it's goals and then let it die. There would probably be promises of a new 9-3 and perhaps a 9-1, but these cars would never see the light of day. With Fiat the new 9-5 would probably be the last new Saab we'd ever get to see.
Fiat might have been a good owner for Saab at one stage, but that time has passsed. As I keep saying, Fiat should buy Holden and perhaps Daewoo too. They would be far more useful to it.

I'd guess Saab already has a new 9-3 design close to finalization. The 9-3 is it's most important car so you'd expect that. I predict it would debut MY2012. By then sales of the 9-3SS will hardly be high even with the facelift it will get possibly as early as MY2010.

Did people forget that Saab once operated without GM in the picture? They'll be fine with Koenigsegg.

Could anyone bring more excitement to Saab than K-Segg? We need positive response from the world market with new innovation to back it up! I vote for excitement and new hope for the future of the brand!

As I have repeatedly stated here, I don't think SAAB should be owned by a single owner, but more by two or three companies with different backgrounds.
I could well imagine a joint venture of Koenigsegg, a major supplier and a venture capital company to own SAAB.

What do other commentors think about that?

The press all over the world is like the weather - ever changing, never perfect. I have journalist in my family, including my mother, and I know first-hand that over-exaggeration and sensationalism go hand-in-hand.

That said, it seems very likely to me that there may be one or two candidates that are indeed still in the picture, as the e24 article suggest. They could have been left out of the final three to either spare them publicity and position them better or because they did not satisfy all criteria outright. Who knows what games are being played behind the scenes. It is a "fragile and difficult" situation indeed.

But nonetheless, go Koenigsegg!

Yeah Go Koenigsegg!!!

Isn't e24 owned by the owner of K-egg?
Anyhow, I'd love Kegg as the new owner of Saab.

How many cars did Koenigsegg sell last year...?

I have a strong feeling that the information and analyses provided here on SU is better than most or all of the other places.

And my guess is that Koenigsegg is by far the best short term alternative, because getting additional support (i.e. Bård Eker getting more investors) will be a lot easier, and the community interest to keep Saab going will be much higher. Because what Saab needs most of all is an enthusiastic owner, the cars (the the old 9-5 included) is by far good enough to warrant a much higher market share than they have. Long term is very hard to predict, but I highly doubt that anything will be significantly better than going the Koeningsegg route.

I also thinks that all these analyses that a GM Chapter 11 will prevent the orderly sale of Saab are off, the reason is that the best GM can get is probably 25%. And if they don't, bankruptcy will follow and Leo Guyfalk will most likely be appointed liquidator and sell Saab (including licenses from GM) without GM's approval, a thing I can't see will benefit GM in any way.

Greg Abbot, thank you for your always insightful analyses. I will just add that Saab entered into this reorganization without first checking with Detroit. The Saab management seems pretty sharp, so they must have done that for a reason. Maybe the Swedish judge's job is not primarily to take care of the creditors, but to give Saab a chance to become viable.

The most remarkable part of this whole process is the incredible bias in the European press in favor of large multinational corporations. JAJ and friends seem to think that they can run the company and develop new product all by themselves, but there are these frequent press reports claiming that unless a giant car company, even a Chinese one, buys them then it will end in disaster. I think the current situation at the giant car companies shows that being giant is no guarantee of anything. Maybe being hugely diverse like Toyota, Hyundai, Fuji Heavy Inds. etc. is, but maybe that just shows the benefits of smart management and cooperative banks and governments.

I would also wager that the new Epsilon II 9-3 is 90% finished. Using 9-5 bits, it could probably be ready in no time. I have a 9-3 and had the 9-3 hatch before that. There is a lot of engineering overlap.

In fact, SAAB's future owner structure could be quite interesting:

20% FIAT (floor pans, production technology, engines)
30% Vattenfall (electric technology) + Norwegian state (investment)
20% Koenigsegg (sports car technology)
30% Renco (investment)

Of course, the shares could be distributed according to a different key.
But anyway, a mix of different owners would provide SAAB with both venture capital to invest in future projects and with the basic technology to work with. The management at SAAB could work more independently without one single owner telling them what to do.
Plus, even if one of the owners pulled out, it would not necessarily be the end of the company.

Koenigsegg sold 13 cars in 2007 and 18 in 2008. For 2009 no downgoing trend in sales have been noticed. Koenigseggs prices start at 720000 euro and expected time from order to delivery is nine months.

I'd wager you guys are right on about the 9-3, because of this:
"SAAB CEO Jan Åke Johnsson, earlier profiled in Nordic Reach (http://www.nordicreach.com) on May 19 had this to tell us about SAAB’s future: “Too much has been accomplished over the last few years and there is too much competence in this organization for us to simply give up. During the next 18 months we will roll out 4 new models and it is my conviction SAAB will stand on its own in a future strong, constructive partnership.” "

Four new models in 18 months sounds really optimistic but maybe they'll make it to three (9-5, 9-4x, 9-3). With the 9-1 to take the fourth spot!

Linky:http://www.nordstjernan.com/news/nordic/1305/

Introducing new models is the easy part. It's developing them that takes time. All the models they gonna introduce in the next 18 months (always those 18 months...) are already developed. What they need is resources already this year to start serious development work on the next 9-3 and a smaller car (a 9-2 or whatever). For that alone they probably need about 500 million USD per year with an expected ROI in about 10-12 years - at the same time as they must be able to pay for the ordinary operations (building, advertising, selling cars). They break-even at 130.000 cars is probably just enough to cover operations. And they will not sell 130.000 cars in 2-3 years time with an almost 10 year old 9-3.

Saab does not need a mass manufacturer as its owner, but I do agree with None that whoever buys it will need to have great expertise in financial management and planning, including access to credit and the financial markets. And if Saab turns profitable in a couple of years there is no reason why it could not go public to further finance its expansion and development.

From this perspective, Koenigsegg is a good owner. Everyone who criticizes the supercar maker fails to look in the right direction, i.e. the new owner will be a facilitator of opportunities, not a provider. Saab doesn't need a sugar daddy, but a cool, understanding husband who knows the people to know in town and goes to dinner and golf with them once a month.

So stop looking at Koenigsegg in terms of platforms and "expertise". They are a deal facilitator with the added bonus of a huge marketing advantage due to coolness factor. Period.

none has some good points but a new owner has a responsibility to make it work and there will be an understandable competance gap when GM relinquish Saab. Some functions can lead but many will need massive changes..

Overall Saab needs an investor with BALLS as well PASSION to make it as a successful global brand. Having only one ingredient will not work.

Development work on a Delta II based 9-3 should be long gone by now. Opel are ready to start selling its sibling Astra in 2010 and Saab is perhaps one or two years behind.

Saab doesn't want to be lumped in some great conglomerate of a company anymore. Which is why they stated they can have a future having multiple partnerships rather than being under one umbrella. I see Saab creating ties like a closer partnership with Volvo and sharing more parts with them to offset costs. All this about the new 9-3 not coming for maybe another 4-5 yrs is ridiculous! Saab knows they need this car very badly. Hands down it is their volume seller... Which is why I think the 9x Air/Bio-hybrid were shown in the first place. To gage the public's reception on a much smaller Saab. We have to remember here, people didn't stop buying Saab's because they were owned by GM. They stopped because Saab's stopped being relevant in today's industry and were perceived as just a little better than the platforms it shared it's DNA with. Take the current 9-3 for instance. It was not the success that it should have been because of this. Do I think that was Saab's fault? No of course not! It's obvious that Saab changed as much as they could on that car just short of starting from the ground up. But they were handcuffed into this situation so why would they want to be in a similar boat as they were. I for one prefer Koenigsegg because they have not one product that competes with what Saab sells at all. Which means if they truly have interest. You know there's not some underlying motive there to see Saab fail in any way. They would be invested and completely supportive of a Saab that returns to greatness.

I'm not sure where all this support for a huge car manufactuer with lots of $$ would be ideal for SAAB.Currently which manufacture has any extra $$ kicking around? GM had lots of $$ at one time and lots of expertise with managing all their brands and look what happened they are now bankrupt. Fiat can probably go sideways fairly quickly and they have there own set of problems so I'm not sure they would be the right fit anyways. It's like having VW own SAAB they could perhaps pull it but they already have AUDI so why? I think that leaves Koeningsegg on it's own but it appears as though they could probably do quite well as long as they have some investors with deep pockets you know they would want this to work with no hidden agendas. Enough GM/Opel/Pontiac SAABs this is a great opportunity to take SAAB back and have it's own identity once again. As for Magna too bad for then and good luck with Opel time to move along...

A mass auto manufacturer of any kind won't be good for Saab. I have previously stated this, but being l'enfant terrible, Saab is too complex for a volume megacorporation to understand it. People often thrash GM, but its fall from glory is fairly recent - just a couple of years ago General Motors was still a formidable organization with lots of cash and engineering know-how. Yet despite all this, Saab never got a chance under GM.

Large multinationals with diversified product lines are a lot more complex than "give them a platform and the know-how they need to build a great Saab". It's just not that simple at all. And there is a lot of politics and the human being involved, and as we know, the human factor is always the decisive one.

Fiat will be exactly like GM and Saab will get lost in a huge mess once again, and this time for good. Alfa, Lancia, Maserati, Chrysler with up-market aspirations... Jeez, no, this is worse than GM! At least then we only had Cadillac and the odd Opel shooting up-market.

Saab's only chance of survival lies in being independent and riding its past glory to reestablish itself on the market.

@ Kroum +1 Survival = as an independent niche brand.

Balls and Passion!

Saab needs money. If they go alone, they need extra huge amount of money. If they share costs with a volume manufacturer, they only need huge amount of money. If Koenigsegg can bring at least huge amount of money to the table, then fine. That's the main thing Koenigsegg can bring. They can't bring any know-how regarding management, technologies, or production that Saab doesn't already know about inside and out. They only thing they can bring apart from money is a cool brand name that can create some bonus in terms of marketing for a shorter period of time.

So who are willing to put forward a huge amount of money without knowing 1) when production of the 9-4X and 9-5 can actually start due to uncertainties around Opel and GM, and 2) who Saab can work with already next year to share development of platforms and drivetrains for everyday cars (not exotic sportscar)?

Hello Swade !

Just to let you know that Marchionne said on Friday Fiat was interested in seeking a deal with Saab if its Opel bid failed.

Source : Automotive news, may 30 2009, NEWS ANALYSIS, title : Will Fiat, after gaining Chrysler and losing Opel, pursue Peugeot?

I reserve my judgment on the significance of this on the future of Saab...

Have a good day !

MarcelT, writing to you from Canada

@ None, You often refer to an ideal owner for Saab and you also are clearly unhappy with what's going on at the moment: leads me to speculate - were you involved with one of the consortiums that was in play earlier in this process? If so, can you disclose the nature of your team/bid?

@ Greg - appreciate your insight & balance as always.

@ Kroum & others on the K-Segg Team: I'm with you guys. Koenigsegg isn't perfect but they have achieved some mighty things already and have a car that is literally state of the art. All from a handful of guys working out of an airfield. The concern that I see is that we end up with some kind of TVR-ish vanity project that goes nowhere. Personally, I can't see it happening but history will provide the answers in time.

July edition of CAR magazine just came out with a list of the 50 most powerful people in the Auto biz. JAJ came in at #49. Nice to see the recognition.

@PT I believe that Saab deserves better than the finalists, who are an embarrassment to Saab. There is no such thing as ideal, but there are better alternatives than Renco. After owning Saabs for more than 20 years, like most here, I would like to see it in competent and passionate hands. I have mentioned being in the acquisitions business for years with some turn and burns in and around the auto industry.

If I had been involved, I would certainly be bound by confidentiality and wouldn't be able to talk about it here.

PT - Go Koenigsegg! It cannot turn into another TVR, there are no Russian oligarchs with egos from Jupiter involved.

And Mr. None involved with a Saab buyer? LOL! Don't think he could swallow all this lead and magnesium they use in manufacturing them. :)

@Kroum Funny...very funny, my friend. Cough! Cough!

@PT . FWIW, I don't think we will know for several weeks. After Monday, it could be months. Steve really has his hands full.

In response to Swade's new heading, if I've been too repetitive or cast any aspersions against anyone at GM etc. including Lutz, Wagoner & Co., it was only meant in good fun. Oops, now wheres that lie detector.....

i believe SAAB has made incredible progress since February.

The German government help OPEL find a buyer quickly whereas the Swedish government has been more process driven.

I would not be depressed that SAAB has not announced a buyer yet.

The brand Hummer has real reason to be depressed. Hummer has been looking for buyer well in advance of SAAB and they have had no one on the horizon !!!!!

Concerning the development state of a future 9-3, I think we just cannot tell. iirc, and if rumors were correct, they were deep in the middle (but how deep was that?) of development based on Epsilon II when it was decided (by GM?) that this platform would make the car to expensive, and Saab has assumably switched to Delta II. That was about a year ago. (Actually a similar situation to the 9-5, where also development was redirected, from the "premium platform" now used by Alfa Romeo, to the Epsilon II).

Incidently, has anyone noted the following statement on the Saab ad http://www.flickr.com/photos/saabcarsofficial/3569724133/sizes/l/ :
"We recently launched the Saab 9-3x....Soon the new Saab 9-5 willl be introduced. Later on you'll meet ->a smaller Saab<- and the Saab 9-4x crossover." What is that smaller Saab???

GM has kept 35% of its ownership in Opel, while the rest is divided up between Magna, The German Unions and Russian Interests, making GM the largest owner.

Conclusion is that GM still is in control, and intend to be so for a considerable future. Making sure opel share the cost of R&D and platforms whith its American Siblings, preventing Opel from launching its brand on the US market, and integrating itself deeper into the emerging russian market. It has also prevented exporting knowhow to china or competitors.

GM might keep a small ownership of Saab aswell, to make sure Saab buys Opel & GM parts. What GM has benefitted from this is to keep its influence without taking more risks. Avoiding saab to get into the wrong hands. Saab has no sigbling rivelry in the US so GM would be keen to keep saab there as a Audi, VW, BMW guard dog in the the executive segment.

GM would most likely prefer Koenigsegg as Saabs buyer as it would be an easy paartner to work with.

GM is stalling the result of the outcome from yesterday. Could ut be that they are selling Saab before ch11 just like they did with Opel?

Tom

I've really enjoyed this thread. I do however feel people are not giving koenigsegg the credit they really deserve. There more to add here which I hope I can expand upon in the not to distant future.

@saaburban makes good point about how this Opel deal is looking like a child with shared custody by six parents, with Magna only at 20%. I think two German states will also have a share. And the British government may jump in on Vauxhall. However, Saab in the U.S. has lost sales to both Subaru in the volume segment and the 'executive luxury' segment to Audi, BMW, Benz, and Lexus.

Kind of wish Swedish PM Reinfeldt had been either more optimistic or more vague about how Opel deal influences Saab.

The U.S. government may wind up owning more than 70% of GM. Does that mean U.S. will then own 14% of Opel/Vauxhall? Why am I wondering when Brazil will jump in to nationalize GM Brazil? :)

@Markac: re: Saturn. That deal is based on the Saturn dealers being able to source cars to their needs, NOT tied to any one auto company, which makes it a real question mark.

I like Jim Haynes' optimism, but there ARE apparently two buyers engaged directly with GM on Hummer. Just does not get any press because Hummer factory mostly makes the military Humvees.

Can anyone recommend a good Saab movie, where the Saab is the main character with trusty dog, saves the world, gets the girl...? June 4 on USA network, James Bond in Casino Royale, premiere of Burn Notice (will Fiona still be driving her Aero), and new series Royal Pains, wherein the lead seems to be driving a 900 convertible...

@Karen Still squirmy about the USGov't owning so much of GM. Opel sounds like ultimate political sausage making - can't wait for the catfight about which new model goes to what German State.

@Woods I like K-Segg and look forward to your expanded points. Just having a hard time with an entity of 30 cars per year guiding one that must have 150,000 cars per year just to break even. That's a $20 million dollar entity buying a $4 billion? company. Being skeptical about this is too easy.

I don't know too much about economy on high levels, and what or what's not required to run a car company. It may very well be that Koenigsegg does not have the required finances nor the skill to operate Saab through the difficult times ahead (don't go thinking that a new owner equals to problems solved...)

But just think about what Koenigsegg is per today, compared to 10 years ago.

I'd say there are some clever minds in that company, knowing a whole lot about management and brand development...

The 9-4x will primarily sell in the US but it is definitely being targeted for a world wide selling point. Which is more than what I can say for Cadillac's sibling version the SRX. Saab CUV will sell in the Euro market, I'm not so sure Caddy will have the same success in this area... It will truly benefit Saab to show the new concept of the 9-3 by years end if they expect healthy sells and to be profitable in 2011. This is a car that would need to have a projected sell date in the Fall of 2010 to help the company get back on it's feet, since it is the major volume seller for the brand.

Anyone up for a little game?

I'll offer three hints .. and I'm hoping that a few will bite and arrive at the same conclusion as I did.

First is .. Cadillac BLS.