Open Thread: Renco Group

It’s Friday night, the end of a torturously long but very interesting week for Saab. I’m kicking back with the family watching State of Play, but I thought it would be worthwhile to dedicate a thread here to finding out what you, the people, think about the prospect of the Renco Group owning Saab.
Here’s a little Pro and Con I did on the Renco group back when they were bidding for Saab the first time:
Pro:

  • Money, and presumably plenty of it, even if Ira Rennert lost a chunk in Bernie Madoff’s scheme.
  • Experience, and once again, plenty of it. Rennert’s been involved in business for 50 years now; much of it international, plenty of it industrial and some of it directly in the automotive sector.

Con:

  • An environmental record that’s almost as dirty as La Oroya, the Peruvian city where he runs his lead smelter. In Renco’s favour is the fact that it’s cleaner than when he bought it in the late 1990s. Against is the fact that he’s temporarily shuttering the plant in preference to finishing the cleanup he promised he’d complete by October this year.
  • More environmental questions with regards to another of his companies, US Magesium, which was accused of dumping waste in a lake in Utah. Renco put US-Mag into bankruptcy instead of paying the almost $1billion fine. US-Mag has cleaned up since and received awards for doing so, but the original actions and steps taken to avoid responsibility leave questions.
  • The two incidents above would be a marketing black hole for Saab if the Swedish press were to pursue them.
  • A questionable business record concerned with junk bonds and pension funds.

If you want a lot more detail, you can read a reasonably uncomplimentary open letter to Swedish government that I wrote about Ira Rennert, the man behind Renco Group, at this link.
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Comments are open. What do you think?

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