Some more perspective on Spyker

Last week I wrote my first post on Spyker, which wasn’t an overly complimentary piece. Shortly after that, I posted some further information on Spyker’s CEO, Victor Muller. This info came from a commenter named ‘ivo’ and yesterday he weighed in with some more insight, this time on the Spyker company.
I’m elevating this one to the front page for a couple of reasons. First, it’s great background info. Second, because ‘ivo’ knows his stuff. He used to work in the motoring press in Holland and whilst he left that work some time ago, he’s obviously maintained a keen interest and has his finger on the pulse there.
So my thanks to ivo for this second perspective piece.

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I think all that has been said and written here about Victor Muller and Spyker needs a bit of perspective.
– Spyker never made a profit:
Well, actually they did, over the book year 2006, some 800.000 euro’s. But early in 2007, there was a protracted streak of reports in the media claiming that Spyker had cooked the books, that they couldn’t fulfill their financial obligations and even that bankruptcy proceedings had been initiated against Spyker. All of this proved incorrect after investigation and one of the papers involved actually rectified the reporting (but only on their Internet site, never in print). Anyway, this campaign prompted the AFM (Authority for Financial Markets, the Dutch version of the SEC) to initiate an investigation and, as a consequence, to require Spyker to amend the 2006 results to reflect a loss. Spyker fought this toe and nail through the courts and actually won the procedure. In December 2007, the High Court of the Netherlands cleared Spyker and considered their reasoning correct on all counts. But the legal battle of course ate up most, if not all, of the profits. And Spyker’s legal success got almost no publicity in the media. Logical, I suppose, for that would have underlined their dubious stance in the earlier stages of this drama.


It never became publicly known who started and fed the smear campaign. Muller claims he does know but never shared that alleged knowledge with the general public.
– Spyker and the F1:
There has been a lot of nonsense written about this. Part of what I will be writing here is conjecture but not a lot. The F1 adventure was not really a Spyker corporate decision but rather an extension of a rich man’s racing hobby. That man was Mr. Michiel Mol, scion of a very wealthy family (his father, Mr. Jan Mol, was the co-founder of Volmac, the country’s largest software company. He became more than comfortable following the acquisition of Volmac by Cap Gemini, still the country’s biggest software house). Michiel Mol proved himself in business as well. He set up another successful software house, Lost Boys, and after that a number of other very successful digital-era businesses, mostly in the entertainment software sector. A well-known one of those is Media Republic, a games giant.
A big hobby of Michiel Mol’s is F1 racing. He, or rather Lost Boys, sponsored two Dutch racing drivers, notably Jos Verstappen (who ended his career) and after that Christijan Albers. When Albers’ team, Midland, was about to fold, he came up with a plan to continue. What follows next is a simplified version of the events, a complete version would require the size of a book. Anyway, the idea was to buy himself into Spyker (which happened by means of a share emission to the tune of some 50 million euro’s), to use that capital and some Spyker money to acquire Midland and to run it with more success on Spyker tech know-how (which is undisputed) and future profits (which didn’t materialize due to lack of real racing successes).
The benefits to Spyker would come from the marketing side, notably a huge boost of brand name familiarity. Victor Muller, a good marketeer himself, recognised the potential and went along with the plan. He still maintains that it was a ‘brilliant marketing move’. And, basically, it was, too, just about everyone knows the name of Spyker, only not always in a positive way. And the cost was horrendous. So, when Spyker F1 failed to score any significant racing successes and derived no or hardly any revenue from the F1, the cost of maintaining the team and developing a new car threatened Spyker’s very existence. It was decided to sell. For this, Mol’s holdings in Spyker (and perhaps some of the share capital held by others as well) were sold to outside interests (Antonov, Mubadala). With the proceeds of that Mol himself bought a minority interest in the team and Vijay Mallya the majority. It is still racing as Force India.
At the same time, Mol relinquished the CEO position (which he had attained when Muller stepped down due to bad publicity about Spyker in March 2003) to Hans Hugenholtz. He, in turn, stepped aside at the end of 2007 and Victor Muller became CEO of Spyker again.
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I don’t think that Spyker’s current management is doing that bad a job. The brand has only been around for like 6 years and it takes a lot of time and money to develop products and establish a market presence. Still, they have a car factory up and running and they make and sell cars. That they actually made a profit within 3 years from the starting date is nothing short of a miracle. And it is not their fault they cannot sell more cars right now due to the recession.
But their cars are not bad at all, they tend to get a lot of exposure, not only owing to their F1 adventures but also to their Hollywood marketing tricks. They do have a lot of money in their background, they have hands-on experience in the auto business and there can be no doubts about the passion for cars there. And there are without doubt many synergy benefits for both brands in a Saab-Spyker co-operation.
The only thing they have against them as a Saab owner and rescuer is the fact that their backers come from countries and economies we don’t know a lot about and therefore tend to consider a bit dodgy. But then again, what do we know about the backers of, say, Merbanco? I like CJ as a person, mostly owing to his undisputably right PR instincts and actions, but really have no idea whether he actually knows anything about the car industry, let alone about turnaround management. And is Chinese government money any less dodgy? We can keep on dreaming about K-egg but both the Egg and GM are saying it’s a no go.
So I say we let Muller and Spyker at least enjoy the benefit of the doubt. This is, if truth be told, the one contender for Saab we actually know the most about and, when considered objectively, the only one with a proven record in turnaround management and relevant industry experience.

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