Lance Cole: Saab in a spin, and the ground is coming up

Lance Cole is a writer living in England and has penned several books on automobiles and aviation. Saab enthusiasts would know him best for the book Saab 99 and 900: The Complete Story, which is an excellent and essential volume and available for sale at the SU Bookshop.

Click here to read all of Lance’s previous contributions at Trollhattan Saab.

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Saab in a spin, and the ground is coming up
Saab author and commentator, Lance Cole, on the Saab shenanigans

The latest news is that Dutch niche car maker, Spyker, is not only an interested potential bidder, but is a bidder being spoken to by the General Motors hierarchy.

On the face of it, that sounds great. But if you examine the contexts, a strangeness is obvious.

Formerly successful bidder, Koenigsegg dropped out at the last moment. Koenigsegg, however small, at least had some money, backers, and Swedish contacts – not that these factors managed to get the lethargic Swedish government to move the deal along at anything other than ‘limp home’ mode – a significant factor perhaps say some, in the subsequent emergency stop…

Now, we have an other small high-end car maker sniffing around Saab. But one that is not Swedish, and one that is about to move its factory from the Netherlands to the UK, and may I add, is a company that in 2007 had to seek financing from Abu Dhabi’s sovereign fund Mubadala. In the summer of this year Spyker admitted (from the CEO’s own mouth) that it had not secured financing beyond 2010. In plain English, was Spyker itself, ‘rescued’?

Oh and by the way, Spyker appears to have made a loss since birth in 2000. It also has Russian based financing available to it. But the figures are tiny. There must be something more…

Given these factors, and that Koenigsegg had lines to funding that included BAIC of China etc, there are numerous questions that arise.

The first is why is GM allowing Spyker into talks given Spyker’s modest fiscal position, and why were potential bidders like Merbanco – the Wyoming based financial funding conduit with Christopher Johnston – a Saab fan on the helm, excluded from a GM invitation to talk Saab over tea? After all, Merbanco would appear to have access to more cash lines than Spyker. It is an odd contradiction that reveals other factors might be at play.

Can a company like Spyker really save Saab? Unless it is fronting an investment line for a hidden, major investor, it appears unlikely. Where are the resources folks?

No one doubts Spyker’s seriousness and talents, but my point is, do they have the money- big money – that is needed. For example what is the bill to pay the workforce’s wages every month, let alone everything else?

So the obvious question is why Spyker even got through the door? The answer may lie in GM’s boardroom game of musical chairs.

We now know that GM has seen its man Fritz Henderson – who had served GM for decades – depart the company, swiftly followed by GM’s reversal of its decision to sell Opel / Vauxhall to Canada’s Magna International and a Russian consortium – note the Russian parallel there.

And with parallel synchronicity, there were rumours that the routing of GM/Saab technology to China via BAIC’s role in the Koenigsegg bid, might have been a factor behind it having a crucial card pulled from the house that had been built: Perhaps, and maybe…

No one has bought the GM Saturn brand either…. Meanwhile the Germans are smarting over GM’s plans to make cuts to its Opel base, and the Brits have started whingeing too about their share of the Opel / Vauxhall restructure – then throw in EU laws and politics and it makes the Saab sale look simple!

The British government was and is committed to pumping 3 billion Euros- yes three billion, into the Opel / Vauxhall spat – featuring German Chancellor Angela Merkel, and de-facto Deputy British Prime Minister – so-called Lord Mandelson. Such amounts of cash make Saab’s needs, small beer.

In the last few days, Opel finance director Marco Molinari has gone, while Nick Reilly the British boss of Opel / Vauxhall has joined the Opel board.

Suddenly, GM – now ex- Henderson ( a true GM company ‘car’ man, whatever else you might want to say), has new directors with other ideas. Even Bob Lutz has had his deck chair shuffled once again. Notably they are men with backing from President Obama’s restructuring legions, (don’t forget that there is a US government loan to be repaid).

New GM head is Ed Whitacre, whose CV shows not much of cars, but he was an Obama appointee, so he is made of teflon and his views will prevail…And the order is, dump Saab, pronto: Stop spewing cash.

What all this shows is that the world of international politics, corporate war games, and deals done in dark corners cannot be excluded from playing a part in the very strange story of Saab’s imminent life or death.

The Obama imperative is that GM must raise cash, re-structure and pay back its loans. This is why the power brokers have given Saab thirty days – to flog it to anyone who can take it off their hands for as much as possible: A quick cash injection from Saab’s sale, and the hell with the consequences for them?

In the hard-nosed world of planet beancounter, it kind of fits does it not…

GM has given Saab thirty days. Given the issues, does anyone really think that Saab will find a saviour? Unless any bidders – such as Spyker or whoever – have access to the hard, real folding cash stuff to the tune of hundreds of millions of dollars, Saab is going to die, cremated and with the ashes buried at turbocharged speed.

Hate me for my negativity if you want, but with cold hard realism to hand, we are close to the end of the road, the omens are of ill portent and those few new model Saab 9-5s you have seen, may become the marque’s last chance saloon in every sense of the word.
To be honest, I would rather Saab died than went through another decade or two of becoming badge engineered genetically modified cars in the same way that we now have Chevrolets (a once proud and wonderful marque) that are actually Daewoos with the badges changed. And who is to say it cannot re-emerge in an after life. Other marques have.

Or maybe there is life in a last gasp Hyundai / Kia / BAIC deal: But not one that GM would surely sanction without serious legal deals on intellectual copyrights.

I once wrote that I did not care where or how my Saab is built as long as it is a Saab, but that was naïve, because unless a Saab really is a Saab and reflects the brand’s design pillars, it is not a Saab. Just as a Beijing or Seoul based Volvo, is not going to be a Volvo if it is based on the floor pan of something else.

The only hope I can see, is that Saab and Volvo finally get together and the Swedish government pumps in money on the same rational that all governments pumped money into the banks hours before they and the world collapsed. Or could Fiat finally buy Saab? Or does Spyker have a secret backer? Could Koenigsegg come back to the table? And what of the Russians who were evident at Magna and at Spyker.

The bad news is that Saab’s time left with us can be counted in hours. Many of you will attack me for this view. I hope you are right and that there is a way to save our beloved Saab. But after two decades of GM, it looks like Saab is stuffed (for now).

I hope I am wrong, as I, like you, truly love Saab. But it is time get real, to know that sentimentality, brand emotion, and design, mean nothing to the powers of far greater strength than Saab, that are at play.

These last few hours are going to be very interesting.

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