Early night snippets - the week that was edition

@ Karen +1 To quote Clara Peller...Where's the Beef?

Maybe Bishop can mortgage the factory. His history shows he is in Saab for fees and a value play - no expertise or history to help steer this. Anyone involved in sub prime is not a cool fit with Saab.

Let's do see the money commitment. If it is substantial, I will be comfortable.

There are press that have been positive, and negative. Typical press.

Swade - you have done great work here! You too, Karen.

None: responding to your other recent comments and this one: I have long assumed that the factory was going to be sold and leasebacked - very good way to raise capital and expense the lease payments here in U.S. do not know about Sweden.

BUT, willing to wait to see why Bishop is so involved, maybe he really does have family in Trollhattan, maybe he has been driving Saabs since the 1970's. He seems to be a networker, a connector, in knowing people with money to invest and getting deals done. he did not do anything illegal, but immoral re: sub-prime securitization.
It was others who used those sub-prime securities to create the CDOs that triggered the global meltdown.

Of course, I prefer a marijuana grower from Humboldt County, CA - more honest way of making money :)

None - the 'layoff' was someone whose work for Saab was being funded by a third party research organization. You are too quick to assume the worst. Eker and CvK have other investors they are representing through their combined majority stake in K-egg Group.

@SR: thanks for photo. yes, it was that businessopportunities.com URL that got me started; it was swade who found Liquiddium and ABS. Farago's Truthaboutcars expose and confirmation from San Diego Tribune are what will lead the real journalists on the hunt, starting today.

I must say, Mark Bishop has done a very good job erasing his short tenure with Quick Loan. Too bad he lent Daniel Sadek that three millionUSD, because that is a court case that persists in cyber-space.

I guess everyone deserves a second chance, but sub-prime securitization is a huge hot potato to spin these days.

In my dreams, CJ of Merbanco owns that 22% of K-egg Group, and tackles the distribution/dealer/service side of the business. Merbanco is the face of American private equity and finance that represents what merchant banking is supposed to be about.

ah well, you never know what will happen by Friday.
I really think it will take that long for CvK and Eker, and Bishop, and maybe Fabela, to realize they have to come forward and detail their funding.

Flipper was a friendly television dolphin. Hopefully this Flipper is not a disguise for a Shark as was the case for the vegetarian shark in the movie "Sharks". :)

CvK tells Reuters this morning that the money is there.

AP (at Forbes) now picking up Dan Lucas' coverage, but AP is stating it differently (including that New Saab will pay down remaining 345MIL USD to creditors after the hearing):

"...The Swedish state was the only creditor who opposed Wednesday's settlement. Mats Hagelin, who represents the state through the Swedish tax agency, told local news agency TT the decision was based on lack of information about Saab's future owner - a consortium led by Swedish luxury car maker Koenigsegg Automotive AB.

"They say they have money. But we still haven't had enough information to make our own objective evaluation of the situation," Hagelin said."

http://www.forbes.com/feeds/ap/2009/06/17/ap6554652.html

Such a nice day here for going outside!

someone posted a comment on one of the Autosites saying "Audi have just made the new Saab 900", surely Saab should be the ones to do it?!?
Hopefully this can be changed.....

someone posted a comment on one of the Autosites saying "Audi have just made the new Saab 900", surely Saab should be the ones to do it?!?
Hopefully this can be changed.....

@ Karen All good points,

Max, I concur. Now that Saab's ownership issue has been sorted its time to show the world the new 9-5.

in the same color, no less. the ultimate His and hHers karma...

I suspect the Saab Whisperer of Los Angeles has something to do with the ongoing appearance of Saab 900s in film and television. From "Saab Story: How GM slowly killed one of the coolest luxury car brands." By Matthew DeBord [posted at Slate on Feb 9, 2009 - great read if you missed it]

"...an antidote to mechanic anxiety, and his name is Walter Wong. Wong owns Right Solution, a garage on Venice Boulevard in Los Angeles that specializes in Saabs. Walter, referred to by some loyal customers as the "Saab Whisperer," doesn't just fix your car—he helps you develop a relationship with it. ..."

http://www.thebigmoney.com/articles/after-fad/2009/02/09/saab-story

BTW, Bard Eker had a phone interview with Reuters a few hours ago. focus was on vision, design, and Saab may need higher margin products due to high cost of labor in Scandinavia [which is bull because Germany has the highest unit labor cost in the world and STILL remains the #1 exporter in the world - not to mention what happened to that cost advantage Trollhattan vs Russelheim? Oh, saw a banner on Bloomberg earlier saying Opel may slash prices by 40% to boost sales - how is that even possible?]

at least Eker got Reuters to drop 'loss-making' from Saab.

found the Eker design lawnmower - created for Husqvarna for the European market, although Husqvarna sells riding mowers in the U.S. very ergonomic.

come on Bard, show Maud the money...and add a currency hedge expert to the Saab team.

"High cost of labor in Scandinavia" is really a meaningless phrase. Scandinavia isn't a single country. There is a huge difference between Norway and Sweden. Eker is probably most familiar with the situation in his native Norway, which is one of the richest and most expensive countries in Europe. Sweden is far down that list these days.

On the other hand, many analysts seem to believe that the Swedish krona will strengthen considerably against the euro once the economy bounces back. In troubled times, markets have a tendency to desert the smaller currencies to a greater extent than is really warranted.

For Karen as well: Here's the actual quote.

"He said that production in Sweden and other Scandinavian countries, which have relatively high costs, means that the focus has to be on "high margin products", but he declined to specify which audience he was targeting for Saab."

He said high costs but did not specifically identify the labour costs. There are other costs too.

To be fair, let's not take things out of context please. Germany's car manufacturers BTW may be a no.1 exporter but they have enormous economies of scale and a strong domestic market. There are other ways to offset labor costs, ie. amortising tooling and development through trickle down of technology through VW group cars to name one.

thanks for a very good translation:)

I wonder if the NG 9-5 will be presented at the Koenigsegg stand:)

I have no idea if Germany is the #1 CAR exporter in the world. Germany is #1 EXPORTER in total in the world - yes, more exports in dollar value than China. Mostly in OEM machinery and high value-added components. Assume autos are part of that.
Heck, I buy my flannel sheets from Germany! No one makes flannel sheets in the U.S. anymore. German are better than Portugese, and both are far better quality and longevity than Pakistan or China (I am a connoisseur of flannel sheets).

But, for example, Whirlpool has an assembly plant in Germany where they assemble the front loading washing machines for export to the U.S. It takes one hour of assembly at $32 total, including benefits, so they can afford to do it in Germany on a washing machine that retails for 800USD to insure the higher quality standards and components in Germany. (all data on Whirlpool example is from an article written by Louis Uchitelle of the NYT maybe two years ago when he was trying to dispel one core myth behind American de-industrialization.)

I thought scale in auto assembly reduced costs by amortizing fixed costs like tooling and stamping and customized components. Not that much difference in labor assembly costs. Was reading how Holden in Australia may lose volume because they were assembling a Pontiac model that shared the platform with a Holden. Once you take the legacy costs out of the Big 3, the remaining disadvantage is in employer paid health insurance, which is why one million manufacturing jobs, many in auto, moved to Canada since 2000.

Was never able to convince U.S. paper companies that Sweden and Finland had lower unit labor costs per ton because of that add-on for employer paid health insurance. They always wanted to know where the costs were for "the Social Welfare State", not believing that workers pay higher taxes, and the governments collect VAT taxes and don't have huge defense budgets.

just thought Eker would have a better handle on cost comparisons between countries at this stage. Currency fluctuations far more of an issue.

enough.

High margin products versus what? Low margin product? Every company wants and loves high margins, the trick is getting them.

That's when you have to get tricky.

I expect that higher dollar figure of exports is attached to a much lower volume of goods than china too(?) Germany might be a high cost country but has a strong domestic market coupled with the 'captive' EU markets. Doesn't change Eker's assertion is that Sweden has relatively high costs, whether they are under Germany or not. Germany has an added advantage that the stereotype suggests it's products will be higher quality than from most other parts of the world. Therefore I find (just my opinion) that consumers are much more ready to pay higher prices for German goods.

Agreed, None. German exports are high value added and so are most of western Europe's, Sweden inclusive. On the other hand, many German automakers have moved production facilities to central and eastern Europe in a bid to remain competitive - for example, the Porsche Cayenne is built it Slovakia, where wages are 1/3 to half of that in Germany.

Not alot of Australian owners of previous BMW 3 or MB C class realise their cars were built in South Africa.

@ Turbin Very tricky. At 70,000 units, very, very, very tricky.

@ Karen I think I can help solve your sleep problem - lose the flannel sheets, it's summer!

The high cost comment is another avoidable OOPs!. Scale does amortize costs and help efficiency, thats why you want volume. Low volume (sales and manufacturing) today are what is literally killing Saab. Also, Saabs quality is excellent, the age of models are the issue.

High margin = the competitive buzzsaw of Daimler, Audi, BMW, Lexus, etc.

PT - the engine is built in Zuffenhausen. The whole coach-work is assembled in Slovakia (Bratislava) together with the VW Touareg.

None, I have to disagree as I don't see Saab building and selling more than 200,000 cars per annum in the foreseeable future. Under GM, working with 2-3 year old platforms to begin with did not help either.

I have my own thoughts about the constant race to update models every 5 years - it kills the residual values of cars and negatively affects the build quality of the newer models. Is this model sustainable long-term? (I'm speaking for the whole auto industry here, not Saab.)

Agreed on the quality and life-cycle comment, though - Saab gets too much criticism for its build quality. It's true that the interior could use some major improvements, but it's not as bad as many portray it.

The 70,000 unit thing was an alarmist leak on what have been described as stress evaluations. It's a silly figure and we all know it, in a regular year. The reality is that SAAB will be lucky to hit that this year. That's GM's problem now, and K-eggs problem to buy into, or assume control of at least.

I agree that low volume is a killer but no-one yet knows what K-eggs official strategy is for SAAB. And why should anybody at this stage?

We don't know what CJ and Merbanco had in mind for SAAB that would really make a difference despite the interview Swade got with him. Even less known about Renco.

It's all well and good for us to dissect every word that comes from the K-egg crew. Time will show their real credentials and plans. These, we believe, are not even clear to GM.

What we do know is that the association of SAAB with Koenigsegg, even though the deal is far from done, has bought more publicity for SAAB than anything else in recent memory. It has received probably more attention here in Australia than the 08 9-3 launch here. As for this years updates, that was a 'silent' launch although I heard from someone that heard from somebody else, that someone actually bought a '09 model in Australia somewhere.

@none: will let you know when summer comes to Berkshire Hills. still using last 100% wool blanket made in America, Faribault Mills in Minnesota!

@PT's wife - Overstock.com has good price, but my German flannel from the 1980's is better quality. I see their ad here lately, but assume it is a stealth internet ad, not SU sponsor?

LA Times had this snippet today: "...The other major Saab model, the 9-7X, a sport utility vehicle, was built in Moraine, Ohio, but production was halted this year and that plant is slated to be closed by 2010."

someone at New Saab should start with price point and move backwards into the cost structure.
very useful technique.

@ Turbin I have to dissect every word - my wife reminds me I have no life beyond my fellow Saabs United idiots ;-) I spent a few minutes this very evening reading about Karen's flannel sheets - and I responded! And I have friends names Swade and Kroum!

The others candidates and their plans don't matter now. The only relevant plans are those of the buyer. A Swade has stated, the beast shall be fed.

AussieNudieRuns.com is still available for registration... :)

If VW offers tartan, why not?

Kroum +1 on the silliness of updating models every five years. Tweaks, yes, continuous improvement, yes, but the whole exterior? Those tools for the stampings must be a big investment. (I do not like the new front on the 2010s. not sleek enough.)

Kroum also makes a good point on interior upholstery. Leather is anathema to the true Greens. Very polluting process still? I only have leather on my 9-3 because it was a huge discount for a 1999 in July 2000. Really hate leather in summer, whenever that comes. BMW is now offering a coating to offset that problem.

As to flannel interior? ha ha. BUT, consider an engineered fabric for durability and fire-retardant.
Certified sustainable birch fabric? If you can do it with bamboo, the Swedes can do it with birch.

Throw in that bottle of Absolut Saab, flavored with lingonberries.

SU will be more normal pace once we know the deal is sealed and some concrete market plans. You guys are sure an improvement over the political wingnuts on both sides in the U.S. Saab is (almost) my oldest best friend. My relationship with Reinertsen lasted far longerthan with my ex. Finding it very troubling that Hondas look more Saabish than these new Saabs.

I think what CJ/Merbanco was offering was the money without EIB, and the model and market image revival Saab needs, especially in NA. Home team usually has an edge, but I do think K-egg's work with Cargine and NLV on Quant was also very significant.
Saw one news report tonight that confirmed the Quant will move forward to production in Trollhattan by 2012. I am more excited by Cargine.

Deals at this stage can come undone (see Magna/Opel). The next week or so will be critical.

"Saw one news report tonight that confirmed the Quant will move forward to production in Trollhattan by 2012."

That was really interesting... Where did you see this?