Victor Muller’s Essential Optimism

A lot of positive press has come out of the 9-4X test drive that took place over the last four days in the Capital of what will be its largest market, the United States. Journalists impressions are forthcoming, but from what I’ve heard most were impressed and consider it a true competitor in its segment. We’ll certainly be covering all of their accounts in great detail here in the next few days. But in the hours since the reporters packed their bags and went home to write their articles, it appears that the first waves to be felt from the event are more about the management and company itself than the products which it sells. In regards to this, I’d like to take a minute to debunk and rectify what I see as a fair bit of sensationalism.

Victor Muller was able to fly into D.C. for the gathering, and joined the new President and COO of SCNA, Tim Colbeck to reassure reporters that even though Saab made some pretty big mistakes, they’re learning from them are acting immediately to rectify the situation. Chief among the missteps that led to the parts shortage was misjudging the level of tolerance their suppliers would allow. Thecarconnection.com quoted Muller from his presentation to the press in Georgetown on Monday.

“Unfortunately on the 29th of March we called the bluff of one of our suppliers who said that if you don’t do what I want, I’m not going to open the doors of my truck, and if I don’t open the doors of my truck, you’re not going to get the parts. Well, he was serious, and we screwed up. Because it caused a production stoppage of two hours.”

News spread quickly in a media environment that had already taken a very critical slant about the automaker, Muller explained, and the troubled quickly multiplied.

“Within two hours of that stoppage, we didn’t have one supplier with a problem. We had 92. And that started to completely unravel it,” recounted Muller. And soon, 20 million euros had turned into 90 million euros.

At the same press gathering, the Hawtai deal and the subject of Chinese production inevitably came up. This is where misinterpretations start to fuel a non-story and it turns into a fire, I’m hopefully getting to it with a fire extinguisher before it gets any further. Victor spoke to Rick Kranz of Automotive News about what he sees as a sure thing and most analysts are even placing bets on– Chinese cars reaching American shores. Unfortunately, quotes as they usually do have not only been taken out of context but completely sensationalized by other news agencies, from thetruthaboutcars.com to leftlanenews.com. In the Autonews.com article, Victor makes a case that it’s only a matter of time before China infiltrates the US market.

“We laughed when the Japanese came,” said Victor Muller, chairman of Saab Automobile AB. “We laughed when the Koreans came. But we will not be laughing when the Chinese come. The Chinese are like a steamroller.”

…Muller stopped short of saying Saab will distribute Hawtai’s vehicles in the United States, Europe and elsewhere. But he said Saab’s global distribution network will be tempting for Hawtai. If an agreement is approved, the vehicle line would be distributed separately from Saab under the Chinese automaker’s name.

In other words (and from reports of people that were there who actually heard how the actual conversation went), Victor is simply stating the obvious, that the Chinese are eager to find a way into the US market with the right strategy. As I reported last week and backed up by GM global sales head Nick Reilly, they’ve made incredible advances in their production capabilities and now have some of the most modern factories in the world. For a company like Saab that has a strong foundation but limited reserves, why wouldn’t they want to leverage their best assets to ensure their continued survival?

“It took 67 years to build up our dealer network. It is the biggest asset not on our asset sheet, and these guys buy into it for free,” said Muller, who was interviewed during a press event in Washington, D.C.

“If they make the proper cars, can you image how much simpler it will be to push product through the distribution network that is already there? It is like a railway network that is already there.”

Muller said that it is possible Saab could be the distributor for a Chinese-built vehicle that sells for around $10,000.

Asked if this would be a vehicle produced by Hawtai, Muller said “there are 120 companies” in China. Saab would be interested in “the one with a strategy,” he said.

No, Victor didn’t just reveal that Saab is ready to make a deal to import Chinese cars to its dealers, he was merely suggesting the conditions that would be necessary for such a situation to arise. What you have in those quotes is an example of what Victor Muller does best, throw a cog in his skeptics’ gears to show that Saab will do what it takes to survive and reach profitability. Did he outright say that any of this was in the works? Of course not– he was putting the word out that Saab is stronger than those who wish it dead give it credit for and has more assets than are simply on its balance sheet. At the same time, he’s once again changing the conversation and turning the typical automotive production paradigm on its head– a small company like Saab given the proper approvals can do some rather big things to the market. I can imagine that if a Chinese company “with a strategy” as Muller says, priced and built a car right, it would be an incredible boon for independent Saab dealers who have had a hard time making sales for the past few years. Of course that car would have to pass all safety and regulatory tests to even hit the market, but the sensational headline “Saab Recasts Itself As Auto Industry’s Answer To Walmart” tends to get more clicks and generate more revenue (which is why if you want to read it, I’m letting you find it on your own and not linking to it here). I understand a writer’s temptation to be funny or insightful in a headline, or passively sourcing an article based on an out of context quote to piece together a non-story, but such negativism is really getting tired.

I know what many of you will say– that the US government will never approve such a deal or that lobbyist groups might block it before it even gets off the ground. I’m not going to disagree, the idea is at best embryonic and certainly has been vetted by every major automaker before. I also know that some will suggest that Victor should have just stayed on topic and talk about the 9-4X at the event. But that he actually has the gumption to suggest it in public shows he’s dealing with the reality of the elephant in the room, that Chinese cars are rapidly improving and that Saab isn’t going to sit idly by while some other company steals the opportunity of cashing in on the opportunity. You have to give him credit for that.

As I’ve been saying since I saw him a few weeks ago in New York, Victor has taken a very humble approach to the cash crunch, and is not only apologetic about the situation but is taking the blame for most of it.

“There’s only one person to blame for this, and that’s me; because I should have been prepared,” (he told reporters in D.C.). “It should have never happened. But it did.”

And that’s really at the core of this whole mess. Victor Muller, despite his incredible work ethic, his astounding intelligence, and his charismatic personality, can’t save Saab by himself. Since the Koenigsegg deal fell through in November 2009, the man has quite literally not stopped fighting for the company that he helped rescue. His optimism fueled the deal, allowed GM to sell Saab, and went a pretty damn long way towards boosting sales back to GM levels, despite a deluge of bad press. But that optimism is simultaneously a blessing and a curse– while many of us in the Saab community have embraced Victor’s words, for those rigid individuals who expected all of Victor’s promises to happen overnight, the fact that *gasp* some might be delayed a few months is enough for them to walk away from the company and declare it a lost cause. Certainly if you read casual commentary about Saab in any of the articles on other sites, you’ll see that negativism prevail.

I’ve read a lot of this negative commentary the last few days, especially coming out of Sweden. To those who want to cast Saab in that light, I want you to step back from your monitors, newspapers, and television screens and try to remember what Saab has been through since GM cast them aside, and ask yourself what would have happened to the company if Spyker hadn’t stepped up to the plate? Do you think that anyone else besides Victor Muller could have been able to pull as many rabbits out of hats to make these deals happen, in the face of so many doubters? While you’re still thinking back to 2009, try to recall all the press outlets saying that Saab didn’t stand a chance to make it a year, that no small car company could ever survive in this business climate, and then read the same press outlets explain that Saab’s business model might just have a shot. The reason they’re changing their tune is because of Victor Muller’s vision.

Yes, Victor makes bold statements, yes he sometimes speaks in hyperbole, and absolutely he sees things in a more favorable light than most any Swede I’ve ever known. But without that vision, I don’t think Saab stands a chance. It’s that same outlook that gives his closest business partners enough confidence to invest in the company, that convinces executives like Tim Colbeck to leave great positions with solid companies like Subaru to take jobs at Saab. As Tim said in his interview filmed on Monday, “Everything that Victor said, he’s kept his word…it all has happened the way he said it would happen. And what’s interesting about the man is his passion for the brand and his passion for cars…it’s infectious.” It’s the same vision that the Swedish NDO has said they believe in, that they backed it with the guarantee of the Swedish crown. It’s because the business plan isn’t even that optimistic, it’s based on solid product and has several very powerful groups staking their fortunes on it, not the least of which is Hawtai, a company that has more recently made conservative plays like on the Bank of Beijing.

Victor Muller is and has been essential for Saab, no matter many different ways you try to paint the picture. If you truly care about Saab, if you really believe that its cars are different from anything else on the road, then you have to have the same faith in the cars that it sells. By that same logic, it makes sense that you should there be a few month delay in the business plan, you’ll stand by the company. Hell, I wanted to buy a 9-4X two years ago, but the uncertainty of the sale process meant that I couldn’t. Guess what? In the meantime our current car held up just fine, the wheels didn’t fall off, and no other CUV was introduced during that delay to make me question our decision. We even saved some money in the process by waiting. Should the next 9-3 be delayed because of the liquidity shortage, I’ll still be first at my dealer to put in an order once I’m able to. Now isn’t the time to start questioning Saab’s chances.

While I’m aware I’m preaching to the choir, what I’m hoping is that the external skeptics or journalists who occasionally read SU stop nitpicking every little detail of what Victor says and start to consider the big picture. Whatever happens with the Chinese partnership, rest assured it’s happening for a reason and that Victor, Vladimir, and other management at Saab think it’s an essential part of the picture. They have high expectations for Saab, and when goals aren’t met it doesn’t mean that the company isn’t on the right track. When a milestone is delayed, when the business plan doesn’t fire on all cylinders, or when a fork in the road like Chinese partnership opens up, don’t try to use it as an example of why you think Saab is bound to fail. If history shows us anything it’s that Saab will do what it takes to survive. Give Victor Muller some credit for what he’s done and let’s pray that he is able to quickly assemble an executive team that can keep up with his own lofty expectations. The patience and optimism most have shown at SaabsUnited has been needed and helpful, let’s all continue to exhibit it while everyone at Saab does their best to teach the company to walk once again.

per
Member
5 years 4 months ago

What great BIG snippet of things. Very impressed by this piece of writing. The SU staff need to tap themself on the shoulder for very good work. I wish all comments was as good and positive. 🙂

Henrik B.
Member
5 years 4 months ago

+1

Cheers!

LarsG
Member
5 years 4 months ago

Great report but also a plus for VM that take responsibilities for the last time’s problems for SAAB.

ANA
Member
5 years 4 months ago

LarsG.
+1 agree fully.

Alec
Member
5 years 4 months ago

Jeff, your are a great writer and this was a very well written article as always and it put a smile.
Keep up the good work.

peeceepeh
Member
5 years 4 months ago

The choir reponds: Thank you for these words – soothing our bare souls.

kochje
Member
5 years 4 months ago

Nice and good comment on VM his actions and interviews.
These people are rare and we must be glad that VM is so interested in Saab and in cars in general.
These managers are needed to keep the business alive and kicking.

WooDz
Member
5 years 4 months ago

A very insightful piece Jeff. Thanks very much.

Belfast_Saab
Member
5 years 4 months ago

Well written piece Jeff, I hope it get’s it’s audience as it is a rational yet passionate article.

Audun
Member
5 years 4 months ago

Thank you!
1. DI.se should read the end of the post.
2. I’ve decided that I’ll never buy another brand than Saab again.

Jos
Member
5 years 4 months ago

Amen to that… If SAAB wasn’t already like a religion to me, it sure has become one after reading this. Swade’s term “SAABology” has a new meaning to me. Thanks man, for sitting down and putting this in writing. My thoughts exactly…

Peter, Sweden
Member
5 years 4 months ago

Excellent piece of writing. As an old editor-in-chief you continue impressing me with everything you do.
SU Crew Up!

michaelb
Member
5 years 4 months ago
The confidence and fighting spirit is very welcome, optimism might be dangerous however. Given the negative press of the last month, it will be an incredibly tight race, above all financially. Sales won’t rebound from alone. To be optimistic in such a situation, might be dangerous. Better to be on the safe side by adding sufficient equity and liquidity through credit lines to reassure stakeholders – potential customers, suppliers, strategic business partners from cooperations, dealers, and not to forget employees, key staff. For the rest – strategically and in terms of technology – I can see more and more the… Read more »
till72
Member
5 years 4 months ago

Excellent piece, Jeff. Despite all hurdles that may occur I think Victor has a strong belief in his vision. And when times get tough he’s pretty good at this thing with the hat and the rabbit…

Thanks Victor for all you did and all you will do for Saab.

saabluster
Member
5 years 4 months ago

Best post post-Swade. Great job Jeff! Thanks

Audun
Member
5 years 4 months ago

+1

ivo 71
Member
5 years 4 months ago

Well, to me it is on a par with that other ‘great-wall article’ about the connections between western and Chinese car manufacturers.

Ivo

MillerMan
Member
5 years 4 months ago
Jeff, you write excellent pieces with great insight and thought. In this article however, you are trying to reach the journalists who write sensational pieces without seeing the big picture. I don’t think these types will be patient enough to read through an entire essay. If they would be, they would know their facts. Often writers write what they would read, especially online. Newsreaders online like small snippets to browse through. If something is interesting, people will read more. If not, they skip over to the next article. Therefor I would like to suggest you use the part of the… Read more »
Audun
Member
5 years 4 months ago

I agree with you!
I’m afraid that DI.se doesn’t read that much.

ivo 71
Member
5 years 4 months ago
It’s called a synopsis, that succint summary/preview with a short conclusion. It is often used in articles in scientific journals. I agree with Millerman that this may help in reaching lazy writers and those pressed for time. But I also believe that much of the one-sided slant many writers adopt is caused by a lack of clear information on the part of Saab and also by either professional incompetence (mostly where online-only publications are concerned) or time pressure caused by the ultrashort deadlines journalists nowadays have to work with. That said, it is another reason to compose the story in… Read more »
No 9
Member
5 years 4 months ago

I concur. Nowadays, you have to make it VERY easy for journalists to read anything.
As another ex-editor in chief: Bravo for this well-felt piece.

ivo 71
Member
5 years 4 months ago

So let me complete the trio of exes: I’m also an ex-editor in chief 🙂 . And I’m quite sure there are more like that here.

Ivo

paddan
Member
5 years 4 months ago

An excellent article, Jeff. Thanks for reminding us why VM and his team will make Saab succeed.

solvy
Member
5 years 4 months ago

in austria 9 saabs were registered in the first ten days of may. so it’s in line with the previous months. maybe the production stop will show it’s influence in the end of the month because austria isn’t a market where you buy from the dealer stock.

StateofNine
Member
5 years 4 months ago
Keep leading Victor, the rest will take care of itself. It may take some of the old boys network 20+ years to understand what you were explaining about China. Having seen the 9-4X in-person now, I predict it will be the best selling Saab to date if given a fair review in the media. I can’t believe the press has the head of the company, Chief Designer and NA President attend their product test drives very often. It is obvious that Saab is not just an investment of yours, but a passion – how often do they see that too?… Read more »
No 9
Member
5 years 4 months ago

The only problem with the 9-4x is timing. Pickup sales in NA are nose-diving already. It’s very hard for a company with limited resources to be at the right place with the right product at the right moment. Let’s hope a little luck (and of course a lot of hard work) will go a long way to give SAAB enough time to rebuild itself.
Griffen up!

mike saunders
Member
5 years 4 months ago

Exactly. It’s the right car for Saab…just 10 years too late. On the plus side, the market for larger cars is always cyclical so the current gas-price induced downturn might only last a year to 18 months. With any luck, 9-5 sales will take up the slack…

P.H
Member
5 years 4 months ago

Perhaps this is where the stylish 9-5 wagon can be taken advantage of in the US, with its large interior space and practicality, coupled with its lower emissions? A pretty good alternative to CUVS/SUVS

Joe___
Member
5 years 4 months ago

Excellent article.
Any attempts to get it published in newspapers?

hughw
Member
5 years 4 months ago

Sorry, off topic. But is there any news on when production will start again? Just feeling nervous that things have gone on too long.

Red J
Member
5 years 4 months ago

Latest news say, not until next week.

mike saunders
Member
5 years 4 months ago

Great piece, Jeff.

An exceptionally well-written piece of analysis that puts Muller’s optimism into the proper context.

Jason Petho
Member
5 years 4 months ago

+1

nolltre
Member
5 years 4 months ago

Actually what I like the most about the carconnection article refenced above is that it actually states that the production of the 9-4X has started about a week ago. Will be interesting to read the reviews.

Steve C.
Member
5 years 4 months ago
Connecting Victor’s optimism with his ability to project and act upon a vision for the future was well worth presenting to provide a broader context for Saab’s future. We all know about the three-year “fully-funded” business plan with the intent of being a niche premium vehicle manufacturer. We certainly want Saab to achieve its plan and sales success with new Saab models would be a good indicator. Lets assume Saab can succeed with that plan. Then what? That’s where the vision comes in. With that vision comes planning, decisoins and actions to implement strategies for the longer term. Put another… Read more »
Audun
Member
5 years 4 months ago

To succeed Saab (and their partner) need to come out with cars that are not to expensive, but fun to drive, beeing safe, nice and useful, like Saabs always have been.
Saab must of course have more expensive versions, but plase let´s get real Saabs with a lot of Saab dna that are not too expensive. 🙂

No 9
Member
5 years 4 months ago

Yes pleeeeeeeeeeeeeaaaaaaaaaaaaaaaaase !

GerritN
Member
5 years 4 months ago
Thanks for the editorial Jeff. As part of the choir I’d like to make some comments, though. I like Victor, his enthusiasm is contagious. He’s a dreamer, in the good sense of the word, and works 24/7 to see his dreams come true. He’s an outstanding deal maker, he managed to start up Spyker from scratch and kept it alive, against many odds he’s now doing the same on a much bigger scale with Saab. However, Tim Colbeck’s remark “Everything that Victor said, he’s kept his word…it all has happened the way he said it would happen.” is flawed with… Read more »
Steve C.
Member
5 years 4 months ago

Your point about the sales numbers is correct but I believe you took Tim Colbeck’s quote out of the original context. Tim was responding to a question regarding what got him to move over to Saab and Victor keeping his word relates to the specific items Victor told Tim.

GerritN
Member
5 years 4 months ago

Yeah, looks like I took Tim’s remark out of its context in the interview. Like a good politician I’ll just claim that I took it to a broader context to further the cause. As far as giving projected sales numbers, that’s a lose-lose situation. Right now Saab ends up with egg on their face because the expectations were set too high. If they would have given lower numbers everyone would have said that they were too low to provide viability.

mike saunders
Member
5 years 4 months ago

From Automotive News:

A quote attributed to Muller: “In China “you can get a $10,000 SUV with air conditioning and electric windows, everything that was ever invented for a car. Do you really worry about a five-star (crash rating)? They look good,” he said.”

I have neither a face nor a palm big enough to convey the proper emotion that quote generates. Where are his handlers?

And where was the coverage of this statement from this blog?

JasonPowell
Member
5 years 4 months ago
“If they make the proper cars, can you image how much simpler it will be to push product through the distribution network that is already there? It is like a railway network that is already there.” Mike, If we’re going to quote the five-star crash rating quote, is it not fair to quote this one that was said first in the article? From what I understand and someone can correct me if they’d like, but these possible cars would not be Saab labelled cars, kind of like Saturn Saab dealer of the past and I think reading what he said,… Read more »
mike saunders
Member
5 years 4 months ago

Right, he makes the comment about “If they make proper cars…” then cuts off that premise at the knees with a quote that essentially says “Who cares about safety…They’re cheap!” I literally almost spit out my coffee at that one.

Saab doesn’t want to be mentioned anywhere in the same breath as anything that’s considered unsafe and cheap, even if it’s not Saab branded. He’s talking about using the US dealer network to peddle cheap Chinese cars. ..

(BTW, the Saturn Vue got five stars…..) 😉

JasonPowell
Member
5 years 4 months ago
(BTW, the Saturn Vue got five stars…..) I know, we sold them and a lot of them which is why we’re excited about the 9-4X. Mike, I don’t know a lot of Saab dealers that would be totally apposed to selling another brand in their showroom if it meant more volume (volume helps keep your parts and service departments busy). I don’t think also that having another brand being available through the Saab network would tarnish Saab. Do you really think he would allow the Saab network to sell the worst cars possible and would it be such a bad… Read more »
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