Telephone conference with US-Suppliers
June 20, 2011 in News
I was allowed to listen in to a telephone conference between the US suppliers and Victor Muller tonight. What I can say is that they have a course of action and to me, it sounds extremely positive.
I also learned that there might be some very important news regarding the short-term funding very soon!
Victor made note of a previously announced fact that has been underreported – that Youngman has been preselected to make a deal with Saab by the NDRC. This makes the process of gaining the necessary approvals considerably easier.
The repayment plan is generous and flexible for suppliers, and while I can’t reveal specifics, it gives them a concrete idea of when to expect full payment for receivables, plus overdue interest.
UPDATE FROM JEFF: after the jump
Göteborgs-Posten reported on information from DI, who obtained a copy of the letter sent to suppliers. This letter was part of what was discussed on the conference call, so since some details of the call are out there now (as you can read in comments already), we’ll report them in the main article.
The plant is stationary and the threat of bankruptcy continues to hover over Saab since its return can not handle their debts to subcontractors.
But information in Dagens Industri claims that Saab initially willing to pay a tenth of the debt.
According to DI, Saab has a total debt to its suppliers of between 500 and 600 million SEK. But in a letter to its suppliers, Saab offered to pay ten percent of the debt at the start of production and the rest with 6 percent interest rate in mid-September. Until then, Saab promises cash payment on delivery, the paper said.
“Unfortunately, our options are conditional on the fact that Saab expects the subcontractors to provide relief. But we have a common interest to start production again and there is a possibility based on all parties to accept,” says Marcus Nyman, CEO of IAC, Sweden, one of Saab’s largest suppliers to the DI.
There was more on the conference call that we’ll keep confidential, but this bit of information is a big piece of it. Basically, Saab gives each supplier up to 10% up front, then follows up with the rest of the money in 3 months with interest. In the meantime, each supplier is guaranteed COD terms for future deliveries– meaning they can’t lose on future deliveries. Either they get the money as soon as 3 months from now (with interest) or they spend a fortune on litigating against Saab, not to mention they’re way back in the list of Saab’s creditors if Saab were to go through bankruptcy. What would you choose, guaranteed income going forward plus a repayment plan with interest, or take your chances in liquidation litigation plus the loss of a proven revenue stream?
Going further, Dow Jones interviewed Svenake Berglie about what he thought of the offer.
“Swedish car maker Saab Automobile’s offer to pay 10% of its debt to suppliers is the best solution you can get, said Svenake Berglie, chief executive of supplier organization FKG, Tuesday.
“You either buy a blank lottery ticket or a ticket with at least a chance to win,” he said, referring to a potential Saab bankruptcy, which would leave the suppliers with nothing.
Berglie said that anyone who has a clear mind would accept the offer from Saab, but that many pieces still have to fall into place for the plan to work. Saab has to strengthen its finances through the sale of its properties, the European Investment bank has to approve another draw down from its loan facility and the deals with Chinese investors Pang Da and Youngman have to get the required approvals from Swedish and Chinese authorities.
“It will take a birdie on every hole,” said Berglie.
I’d go further and suggest that VM and Saab have a few more holes to play if they par or bogey any steps here. But they still need to concentrate and play the best they can on the course as it stands.
Bravada from GMI said on June 20, 2011
That’s nice to hear, I understand it was predominantly related to the 9-4X production. I do hope at least this goes uninterrupted.
Has anybody at Saab given you a clue as to what they intend to do te relieve the situation on the European side, esp. with regard to spare parts? Who is stalling the process, what is the obstacle they can’t overcome?
Frankly, I’d love to hear from the suppliers on that. I don’t quite care what VM said, he has no other option than to be beamingly positive and hint at stuff that would make you think a positive outcome is near.
Did anybody at Saab ever explain to you how in the world a company managed by grown-up men and women with much experience in business and the automotive sector in general, with full awareness of their sales reported on-line and presumably a functional management accounting and forecasting unit has managed to accrue so much debt with their suppliers?
saabsessing said on June 20, 2011
Take it down a notch. Why are you so important that Saab’s management needs to hold themselves accountable to your curiosity?
Toby K said on June 20, 2011
Bravada
I get it.
You hold the management responsible for the position they are in.
I think we all understand that.
massive Debt +interest+ difficult to sell cars= corporate death.
Its not viable-then you look at what Saab has in terms of heritage, enginnering expertise, loyalty (workforce and customers/fans) future product and joint innovation (e-AAM/boston power/Compudrive/Cargene valvless) and maybe, just maybe after a monumental struggle you end up with something good, something viable, something that is/was worth saving.
Aston Martin Lagonda turned a profit in their 63rd year of combined production-luckily they were never measured by shareholder value-David Brown said they “made cars not money” This is perhaps an antithesis, a bad example, but sometimes good cars are borne of a complicated history.
Lets not paint it blacker than it is or criticse too heavily those currently fighting for survival.
If the paycheques stop coming in for the mangers, the workers and the suppliers they will get the message without you shouting at them.
I too am getting angry that Saab may die and that the “fully funded” business plan.. .erm…wasn’t even partly funded.
Saab is not dead yet though. What can you do to support them?
Me? I think I’ll fill a marketing gap and start printing the best of the SU 9-5 adds into local media with the dealer’s contact details. (unoficially of course).
The more proffessional offerings looked like they might get folks into the showrooms to see what all the fuss is about.
No offense I’m grouchy today-ask Red J…it’ll pass when I sit down with a cool beer.
Red J said on June 20, 2011
If you have a point, it’s OK for me.
ANA said on June 21, 2011
+1
Bravada from GMI said on June 20, 2011
My problem with supporting Saab is that by doing so I am supporting the current management, or actually one person who I feel has wasted a lot of good faith and credit given to him, due to unknown reasons and motives, perhaps a less-than-idealistic agenda, perhaps ineptitude and lack of prudence, or a combination of many factors.
I feel like a fool running around shoving everybody into Saab showrooms, telling them the company is sound and the cars are great now to be faced with that. I feel taken for a ride and taken advantage of. I have a great car for a consolation prize, but I’d hate for it to become a sad memento of one of he best chances ever wasted.
I do hope there is a soft spot open in the Pangs’ hearts for Saab and that they will appreciate the brand, the company’s capabilities and its unique positioning, or perhaps they will bring JAJ back. I’ve lost faith. I now have only hope.
I think that’s enough from me for a time. I hope to be proven totally wrong soon.
Jake said on June 20, 2011
I hope so, too.
SaabClubAlaska said on June 20, 2011
Your anger is understandable, Bravada. Honestly, I think you’re just voicing what many of us are secretly thinking. Like most of you, I too will continue talking about Saab in positive terms, highlighting good reviews from the press, pointing out encouraging news announcements, and doing what little I can with our local Saab club.
But there’s no denying it’s becoming increasingly difficult to stay bouyant. Of course, SU helps mightily in that regard. So, thanks to everyone at SU, and to Swade, for constantly keeping our spirits alive and kicking. I know I couldn’t do it without you.
Jake said on June 20, 2011
Don’t have a panic attack. They don’t have much debt; only slightly less than $3,000,000 US Dollars. That’s pocket change. Some people owe more on houses! In other words, VM and staff are doing a fine job; let them sort this out. It shall be sorted out in the end.
Johan said on June 20, 2011
Oh, I wish it was that little…the 3 million dollars are not close to the total dept (to suppliers), they just represent the sum of demands that have gone allt the way to the Swedish enforcement authorities. Total dept to suppliers is, as it appears, about 500 million SEK (what´s that, 60 million USD?)
Jake said on June 20, 2011
Right… Sorry, I got that wrong. But still, only $60,000,000??? Doesn’t seem to be that much…
Jeff said on June 21, 2011
Chump change considering their revenue last year was close to a billion euro in 2010– a bad year for them.
ANA said on June 21, 2011
Well if it is so called ‘chump change’ then it is pretty sad that they haven’t got it.
Pedro said on June 21, 2011
I wonder the exact same thing, Bravada. I suspect the business plan was pretty much built around a very short-term-oriented financing structure (i.e. around financing everything out of the liabilities side of working capital accounts) instead of a very conservative capital structure where long-term debt and equity would cover a significant portion of the working capital requirements. Anything that shook the company (lower than forecast sales, for example) risked this type of situation…
In my case, I just don’t want to see a Swedish version of the Rover-story.
Tobbe said on June 20, 2011
I think that its very smart of VM/saab to let you to get some insight in whats going on, all the media dont allways write the right things.
SaabClubAlaska said on June 20, 2011
[cough]Truth About Cars[cough]
Jake said on June 20, 2011
[cough]Bertel Schmitt[cough]
saabista63 said on June 20, 2011
I have to confess there were a few days last week when I was prepared to see SAAB fold – like: Okay, after all, everybody gave their best, but once in a while you have to accept the inevitable.
But here is Victor Muller, and there is Swedish Folksam buying SAAB’s production facilities (Okay, THEY should know!), and as it seems, we’re having a perspective again.
I agree with some of the criticism of VM’s handling of things, but then again, the man doesn’t give up easily, does he? Not that I’d mind!
Nissi said on June 20, 2011
Viktor Muller must present a new cash injection of minimum one billion SEK to SAAB during July. Additional 300 million SEK from property sales will only cover roughly one month of present losses within SAAB. So SAAB most likely already now is technically bankrupt, soon consuming the Chinese advance payment for products ordered to be delivered during the October.
That´s at least my financial analysis, and I guess most suppliers do similar type of calculations. If you then is a supplier with an order book like this company, would you consider supplying SAAB with necessary parts without first being paid for the parts already delivered to SAAB.
A “payment plan” of SAAB´s already due debts can never be generous. It´s only a onesided breach av an previous business agreement made between two parties,
TimR said on June 20, 2011
I cant tell you why, but I CAN tell you that your financial analysis is wrong! the situation is no where as bad as you describe it!
Jeff said on June 21, 2011
The problem with making a drive-by analysis without going over the balance sheets fully is that you can come out with completely skewed results. As Tim says, it’s not as bad as you might think. The suppliers absolutely need to come on board with this new proposal by Saab, which as Tim says is quite generous. It’s a continuous chain, much like a natural ecosystem. All the parts need to be engaged for each others’ survival. Without giving away too many tea leaves- suffice it to say, if the suppliers sign on now, they’ll be paid in full in about as much time as this whole mess has unfolded.
Mynoob said on June 21, 2011
In 2010 they burned about 170MSEK/month, the burn rate today is probably a little less given the fact that the factory is shut down at the moment, that Saab has lost 200-300 employees since 2010 and that development has grinded to a halt (partly due to loss of competence). So If they fire about 2000 people they will reach break even. The present situation is madness, they should have given the factory workes their notice in march allready as any sane company would have done.
RS said on June 21, 2011
They’ve burnt a lot of cash due to insufficient sales. Now, when they get the factory running it will be the first profitable month/quarter for Saab (again orderbook +Griffin, 119g 9-3 SC TTiD, 9-5 SC and 9-4X). The key is to get the momentum going for the next year until the next 9-3 will be put into the hands of journalists.
I agree the fat lady has put on some weight recently but if they can get the factory deal done to start paying the suppliers IMMEDIATELY, there’s a good chance of being able for Saab to walk away from this severe accident.
Call me a fanboy if you will, couldn’t care less. Keep on fighting VM, we need those 9-5 SC’s on the road!
Mynoob said on June 21, 2011
Yes, but they don’t sell any cars nowdays either. It is even worse than last year. They have too high costs, as simple as that. Fix that is my recommendation.
Saab is in no shape or form a profitable business now. When they sell 150-200.000 cars then we can start talking about a profit but untill then it’s a loss making black hole.
They can’t go on beeing a day care centre for understimulated factory workers. VM should have pulled the plug a long time ago and put the company in reconstruction.
RS said on June 21, 2011
Yes the Q2 will be a disaster, but there always comes the next quarter. I’ve joked before that Saab should start counting yearly sales from July 2011 and here we are. The sooner they get in the black the better -which according to JAJ would be about 6700 cars sold per month (THN + 9-4X).
If the factory starts on Monday July 4th they have a good chance of pulling it off with this huge backlog. Ones the factory rolls again orders will be pouring in. Especially when people get to see the 9-5 SC in the metal.
But we have to get back to this in two weeks time when they absolutely have to start producing cars again.
kochje said on June 20, 2011
VM is like a Pitbull; when he has bitten, he will not loosen again. And that is what we need to get through this difficult period.
Go on VM; light is seen at the end of the tunnel.
SaabClubAlaska said on June 20, 2011
+1!
ArchDandy said on June 20, 2011
My philosophy!
When you in the darkest moment you will see a big light. And I guess the light will come soon!
CurtInFalcon said on June 20, 2011
As long as the light isn’t that of an onrushing train!
Toby K said on June 20, 2011
Arch Dandy
I think there you are actually describing death Sir.
STAY AWAY FROM THE BRIGHT LIGHT.
Red J said on June 20, 2011
Toby,
Saabist are not moths !!!
ArchDandy said on June 20, 2011
Toby K
No, I don´t mean death.
I mean when it´s all bad you have hit the ground and you can always build it up.
And I think SAAB has hit the ground so it ´s time is in for SAAB to build it up.
It´s like depression, when everything is negative, the future can be positive, it´s all how you handle it. And I belive in Saab. It´s the only religion to me.
Remdu67 said on June 20, 2011
VM is not talking with suppliers just to pay Saab’s debts but to insure now a continuous production with no more stop. Having payments delays is ordinary matters for car production. Furthermore the amount of Saab short term debts is to be compared to the number of incomes
marq101 said on June 20, 2011
I have been commenting on the trolls and all the people who have been declaring Saab dead for one and a half years now: Saab is still here. I just did it on a Dutch site for Automotive professionals and I’m doing it here again:
By keep saying Saab is dead, all those alleged specialists have turned themselves into Tarot card readers.The problem with most of those people is that they think in problems instead of opportunities. VM is the man of opportunities and that’s why Saab is still here. The naysayers have been wrong sofar. We have to be realistic, Saab might not make it, but that would not be because of that tenacious group of people who now is working so hard to save Saab and that would certainly not be because some assholes said so. We Are Saab, Hear Us Roar (Actually I used some arguments in my comments to the trolls (-;)
Niklas G said on June 20, 2011
Thanks for the update! It’s easy to panic and be seriously worried that they have completely lost control when you hope for production restart news and all instead get “not in twoo week at least”. Then the small positive insight here iand in some other posts really means a lot, small confirmations today that things haven’t stalled, that 9-3 development goes on as usuall, that VM hasn’t run out of new ideas, Pang Da is confident about a positive outcome, some positive cash injection news to expect etc.
Remdu67 said on June 20, 2011
… (following my previous post, sorry) should be compared to incomes of a month production.
Bravada I remember of your reply when I expressed my fears about Saab : sounded very condescendant to me. Now you are listing faith at the moment. Not me. Silence has not commited
Remdu67 said on June 20, 2011
any murder yet.
Saab up!
[damned I phone on which the "publish" button is to close to the text!]
Tim OBrien said on June 20, 2011
Pretty negative reporting in The Australian today:
http://www.theaustralian.com.au/news/breaking-news/saab-production-battles-force-plant-to-close/story-fn3dxity-1226078917946
SAAB production battles force plant to close
From: AFP June 21, 2011 6:08AM
PRODUCTION at Swedish carmaker Saab’s plant in the western Swedish town of Trollheattan will be down for two more weeks, as the beleaguered carmaker has yet to guarantee supplies.
Assembly line workers were informed at a meeting overnight that they would not be needed back at work until Monday, July 4, several Swedish media said.
To pick up the pace quickly once production starts again, the plant will only close for two weeks for the summer holidays, postponing two holiday weeks until later in the year, spokeswoman Gunilla Gustavs told the Swedish press.
“What’s important for us is to return to production, and what is needed for that is to get an agreement with the suppliers for the material to be delivered to the plant in a coordinated way,” she said in an interview with Swedish public radio.
Saab’s main plant stood still for over seven weeks during April and May as suppliers halted their deliveries to Saab over unpaid bills.
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Production started up again on May 27 but stopped again on June 8 when the company complained it was missing components for the assembly line.
Last week, Saab’s Dutch owner Spyker announced it planned to hand over majority control of Saab to two Chinese companies – distributor Pang Da Automobile and car manufacturer Zhejiang Youngman Lotus Automobile – in a bid to secure last-ditch rescue funding.
While observers hailed the deal, which also boosted Spyker’s share price, they cautioned it might not go through quickly enough to secure the desperately-needed short-term cash Saab needs to stay afloat.
Saab, which employs 3800 people, was rescued at the last minute in early 2010 when tiny Dutch company Spyker bought it for 400 million dollars from US auto giant General Motors.
After initial optimistic statements and production forecasts, Spyker and Saab have recently been scrambling to pull together enough cash to keep production going.
Jeff said on June 21, 2011
A link will suffice, you don’t need to post the whole article for future reference
.
Niklas G said on June 20, 2011
A question to anyone with insight into the Saab spare part business:
If I replace parts of the anti theft alarm in my 9-5 SC, will that mean that Saab gets some of the money, or will it just be an cash injection to GM and/or Opel?
(The anti theft alarm ohas a battery that assures that the alarm works also if the car battery runs low. Now the _alarm_ battery is running low, however and for some silly (GM/Opel-standard?) one cannot replace the battrey only, but has to replace a whole module of some kind for 6000 SEK. Would those money go primarily too Saab, GM or Opel?
TimR said on June 21, 2011
It will go to Saab!
GerritN said on June 21, 2011
You can actually replace the battery, needs some surgery though. Just google.
I don’t want to deprive Saab of any well earned income, but the replacement of the whole theft unit is a ripoff. The battery should never run out during the lifetime of the car. It’s a bad component, the battery starts acting up after a couple of years already and it should have been a recall.
Toby K said on June 20, 2011
Saab Parts will get about 10% of the money you spend on the part. most will go to te OEM eg Varta/Exxide or Bosch, the next biggest chunk will go to GM based on their intellectiual property stake at the time in the overall venture…followed by Saab. just less than 25% will go to the company that sold you that part (plus labour profit if you get it fitted by them).
So it’s not much but it does support Saab and its suppliers and dealerships that is why we recommend genunine saab parts via dealer. To better secure the supply chain so many customers value. imagine its not just you making this decision but others like you-then those small percentages add up.
The GM cut will get less and less as time goes on since they will have less to do in terms of IP for newer Saab cars.
I have recently ordered a new electric seat suround, I like Saab I like my dealer (who will fit the part) why would I go anywhere else when the brand I love is ailing? I can understand the economic arguments BTW but if you can support the chain-please do via your Saab dealer.
Börjesson said on June 21, 2011
The total debts to suppliers amount to somewhere between 500 and 600 MSEK, according to tomorrow’s DI (print edition), whose story is being quoted by various Swedish news sites tonight. That equals between 78 and 93 million dollars by the current exchange rate.
Saab apparently wants to start off by paying a tenth of the debt when production restarts, and pay the rest with six percent interest in September.
http://www.gp.se/ekonomi/1.656942-saab-vill-betala-tiondel-av-skuld
davidgmills said on June 21, 2011
Let’s say I am a parts supplier. Why would I agree to this? Saab pays a tenth of what it owes me, then I produce more parts, probably costing me more than the tenth Saab paid me, and then I wait for September. What can I reasonably expect Saab to do in terms of payment in September that it can’t do now? Sell some assets? Get a hunk of Chinese cash?
And then I have to produce more parts? And how will Saab pay next time when it has no assets to sell and has no more Chinese cash?
I think most parts suppliers, at least the ones in Europe, will just stop supplying. They have probably had enough.
Rune said on June 21, 2011
Well, two options are presented:
#1: Take your chances now in a liquidation process and find new customers to fill the void left by your former cusotmer
#2: Continue production and get paid upon delivery and hope there’s enough money in September to pay all parties concerned
The second option actually boosts your chances of seeing any money at all, as well as provides income in the mean time.
I also suspect some suppliers might be understanding to Saab getting shafted early on. By staying afloat this long, Saab have proven that they were on track back in March when one of the suppliers (followed by others once the word spread) demanded shorter payment terms.
till72 said on June 21, 2011
Well, you, as a part supplier, would agree on this because you want to get through this without loosing money. I’ve been through this with a few customers, too.
Suppliers will get 10% on start of production and COD for their deliveries from then, which means they run low risk for their continued deliveries. The rest of the payment with interest will come three months later. Not a bad deal if you have in mind that some of those suppliers need the money they earn from Saab for their future survival. They are dependent on each other. As I can tell you from personal experience the bad thing about a customer going into bankrupcy is not the money you loose right away, it’s the money you won’t earn in the future.
You’re right that Saab now needs some cash infusion to pay the current debts. For future payments there will be the revenue stream from production that was totally missing for weeks now. This will help to pay for the running costs while the new cash has to cover the old debt. Sounds not that bad to me.
Suppliers will start supplying if they think the plans Saab shows them are sound. But Saab has to meet the plans now for I am not sure if they would get another chance.
davidgmills said on June 21, 2011
We have a saying from a movie: “Show me the money.” I don’t see that Saab has the ability to show anybody any money right now. It just seems like all Saab can show is promises.
Remdu67 said on June 21, 2011
+1 right Jake something like not more than 2 weeks of (full) production incomes, around 2600 sold units. Car business…
terry9000k said on June 21, 2011
Re: ”The repayment plan is generous and flexible for suppliers”
With respect TimR, it is normal that suppliers are paid at a due date after the parts are delivered, so the wording (as above) is rather Condescending.
What I do not understand is how all of these negotiations with suppliers is only just coming to the point where Saab s talking about how much is paid & when.
I can only see the factory has stood still since April (excluding a short Start). Vast amounts of money from sources, inc Pangde have been received weeks & weeks ago, so why only now, are these discussions taking place (please don’t respond that there are 000′s of suppliers!!).
Some really good & news needs to come from VM/Saab quickly (with positive actionable turn around comments), because I think I can sense VM is seeing his support fade away.
People in this forum & the many others worldwide have been supporting VM/Saab, now it’s their turn to support us…..And Now!!.
I am a Saabist & will still have my cars, but maybe not a manufacturer, at least in the EU)
—With regard to the 9.4X production… GM will just keep virtually all the money, as they are owed tonnes anyway & if Saab do go belly up, then they have just got themselves a nice car with a Saab badge & a money maker……
davidgmills said on June 21, 2011
“A money maker?” Are you serious? Are Cadillac dealers going to sell them because there won’t be any Saab dealers in the US remaining. I can’t see a rebadged Cadillac selling in Europe. The 9-4 is not Saab’s savior or even GM’s savior.
Hans H said on June 21, 2011
Hrrm… Saab 9-4x is not a rebadged Cadillac.
Tripod said on June 21, 2011
I agree, Hans H.
Well, davidgmills, you are one of the latest pessimistic commenters on SU, during the last 24 hours, or so; clearly if you believe the 9-4x is “a rebadged Cadillac” you are not only pessimistic but also wrong; and why should anyone listen you then?
I’ve seen so many negative comments to Swedish news articles in general, and here; people commenting about things they know next to nothing about; why on earth do they think that anyone should listen to these “armchair CEOs”?
And above all; let’s say I don’t prefer, I don’t like, Volvo, for some reason or another, that doesn’t mean I take every bloody opportunity to bash that car and company, in fact I just don’t bother to comment at all; and if a, say, S80 suddenly beats a Mercedes in some crash test or other test, I would say “way to go”, as the Swede I am, but I would not bash the company. Either those persons are immature 18-20 years old, or they, somehow, never did grow up.
davidgmills said on June 21, 2011
I have been here since the last crisis in 2009. I pulled hard for Saab to be sold by GM. After the GM sale, Saab’s existence was a long shot. So I get real tired of unwarranted optimism. You guys sound like a bunch of cheerleaders when the team is hopelessly behind and the clock is about to run out.
Face the facts. Production is now shut down for the third time since the beginning of 2010.
You guys act like its no big deal to come up with a couple of hundred million bucks. Or to get thousands of suppliers to come on board a train to nowhere. You obviously are clueless. Most of you sound like you are in your late twenties or early thirties and have never been involved in running a mom and pop business, much less a major corporation.
It is time to get real. Saab has had a number of opportunities to make this European venture work. It hasn’t. There never was enough money. It is not Mueller’s fault. He was operating on a shoe string budget. Overall, Europe is hurting for money almost as much as the US.
For Saab to continue as a brand, it will need to become a Chinese or Indian company, because those are the only two countries with sufficient cash to make it work. India has shown no interest, at least not publicly. So that leaves China. Saab, if it continues to exist, will be Chinese before too long. I am lamenting the fact that I don’t want a Chinese Saab. I am tired of Chinese or other Asian products. I am tired of American and European firms selling out to the lowest cost labor.
Jeff said on June 21, 2011
One of the many reasons it’s taken this long is because they wanted to give the suppliers a fair shake up front, and make sure they had short term funding secured. The property sale that you’ll be hearing more about shortly is one of those missing pieces. That’s why you’re getting a formal proposal now, not sooner. Just something to think about.
These deals are incredibly complex, yet Victor and Saab’s job is to make it as easy as possible for all parties involved to get paid and keep the system running. For having such limited resources, Saab is doing a pretty remarkable job, in my opinion too.
davidgmills said on June 21, 2011
Jeff:
Wake up about the property sale. This is a slow motion liquidation. As I have pointed out before, no business sells its property when the property was bought or created for a very specific purpose. The highest and best use of this property is for auto production. There is no other auto company in Sweden that can use this property. So this property cannot be put to its best use. It is being sold at a huge discount to raise cash because there is no purchaser for it as an auto plant.
Sale of the property also means that new buyers of the company (read Chinese) can easily buy out a lease or only produce cars in Sweden until a lease expires. This offers them a great excuse to take production to China.
This is nothing but a slow motion liquidation and sale of assets to the Chinese. I think there is a good chance we have seen the last Swedish produced Saabs in the US. If not, we won’t see Swedish produced cars much longer.
RS said on June 21, 2011
David, don’t think so. I believe the Chinese are much smarter than you give them credit. They know that if they’d took Saab elsewhere about 40 of 50 markets (and currently all the biggest) would go stone cold.
Not only that, 90% of the current customers would walk away myself included. I don’t care who owns the majority of the Dutch holding company as long as main production, R&D and company headquarters is in Sweden where it belongs.
BTW could you cool down a bit please.
davidgmills said on June 22, 2011
You apparently don’t understand what a sale of the property really means. It’s a liquidation. China doesn’t care if it loses 40 – 50 markets because it wants production in China. But it won’t lose the markets if production moves to China, at least not for long. The rest of the competition will be run out of business when production moves to China.
People in the US hate buying Chinese products from Walmart. But they buy them. Why? Because they can’t afford anything else or they can’t find anything else.
Walmart with it’s Chinese products will be coming to a European country near you if it isn’t there already. Welcome to our world. Welcome to China Saab.
RS said on June 22, 2011
Tell that to all the companies of the world that have freed up cash this way. I don’t see any reason why they must have buildings on their books. You don’t seem to understand what depreciation means.
The only question is, can Saab in a position they’re in strike a good enough deal with Hemfosa but I won’t go into that. Apparently they’ve offered more than VA did.
74StingSaab said on June 21, 2011
I like SU so much more when it’s more of the ENTHUSIAST site as opposed to the piss and moan, everyone else knows more than VM and gang, website.
Unless your paycheck is directly related to Saab, keep calm and carry on.
geez.
Jason Petho said on June 21, 2011
+1
No kidding.
Daniel G said on June 21, 2011
I agree with you fully. There are some people who write the same thing again and again now…
CurtInFalcon said on June 21, 2011
Did you guys read the hatchet job TTAC did on SU today? They wrote a scathing article about both SU and Saab. I don’t understand their negative reporting. Can someone fill me in on the history between SU and TTAC?
Jeff said on June 21, 2011
I specifically called BS out for being wrong once (about the timeframe for the initial €30 million transfer of funds from Pang Da to Saab). I was sick of TTAC creating controversy and specifically their China “expert” injecting his own opinion about a situation which he clearly didn’t understand or have full knowledge of. He took it very personally. Since then and to the best of my knowledge (I’m not an avid TTAC reader, I’ll admit), they haven’t corrected that article or mentioned the fact that BS got the story wrong, and they even censored my comment on their site when I posted it. While we’re all normally happy to engage in dialogue with people firmly committed to using facts to form an opinion and not the other way around, TTAC has firmly established their journalistic style.
The NDRC might shoot the deal down, who knows. No one is certain that it will go through, until then we’ll wait. In the last piece that BS cites in his article from China Automotive Review, the writer cites the fact that “The close-to-ideal tie-up of three companies in two JVs seems to be a win-win deal for everybody if approved by the Chinese government.” Certainly there are challenges, overcapacity in China being the biggest one, but the deal would boost China’s number one priority: GDP. For that reason let alone many others, I’m optimistic about the deal’s success. Once mid September comes, we’ll finally know what happens with the Chinese Joint Venture. In the meantime, I can assure you Victor Muller and his crew are working hard to line up other lifelines and plans B, C, D, etc. in case for whatever reason the deal doesn’t go through.
In the meantime, don’t engage or bother commenting at TTAC– they censor comments they don’t agree with anyway. Your voice will likely be muted.
Khrisdk said on June 21, 2011
Yup
They have a somewhat different idea of what is relevant for an article than most.
And they are especially sensitive if you start quoting them from earlier answers
RS said on June 21, 2011
I think you guys are misspelling TIC TAC.
Markac said on June 21, 2011
Geez, optimism certainly seems to have gone south around here lately! Saab’s not dead yet folks. It was always going to have a difficult time until the 9-3′s replacement arrives. That’ll be a game changer, but in the meantime it will be hard.
Griffin Up!
zippy said on June 21, 2011
Saab will be owned by Youngman or BAIC before the summer is done provided GM doesn’t get all antsy regarding technology transfer and even if said companies just wanted the name they will never get it. Why? Saab is the name of a Swedish aviation company that actually owns the name.
Khrisdk said on June 21, 2011
Exactly one of the best reasons that Saab will probably live on and produce cars in sweden.
KarlR said on June 21, 2011
If I would be the supplier I wouldnt take the bid and take my chance in bankrupcy!! This is a shame SAAB! Who let it go this far!! Dont they have any control of money?
Tripod said on June 21, 2011
Do you feel better now, when you have vented your spleen? I do hope so; because I’m afraid it will not change anything else.
Hans H said on June 21, 2011
Is bankrupcy really that fun?
I understand that in some branches, bankrupcy is the way of life. But is it fun? Does it produce anything?
Toby K said on June 21, 2011
Personally I would support the company in the hope that they stay alive and continue to need the parts I make. Bankruptcy has never covered even a fraction of the costs.
Are you in the parts supply business or are you a banker?
StefanH STHLM (www.bmsg.se/saab_sales.pdf) said on June 21, 2011
I have the feeling of some big business going on right now. In China.
That there will be a major investment that will take care of the EIB loan and finance sales and development of 9-2.
Things we small commenters cant comprehend.
Im just about to file an order for a laser red 9-5SC.
jouni72 said on June 21, 2011
I do have a same kind of feeling that something big is coming. Also looking forward a final proposal about chancing my 9-3X to 9-5SC from my SAAB-dealer…
StefanH STHLM (www.bmsg.se/saab_sales.pdf) said on June 21, 2011
The exact exchange Im about to do. 9-3X into 9-5SC (XWD). Depends on how much I get selling the 9-3X. YM10, 27000km, gasoline, AT.
Love it!
jouni72 said on June 21, 2011
My 9-3X is ttid M6 white with 58 000 km. Exellent car but I need more space and I need to support SAAB buying a new one… My dealer is very happy to get this new used Saab-car. Hope he also values that in price… I´m planning to buy 9-5 SC ttid white aero.
StefanH STHLM (www.bmsg.se/saab_sales.pdf) said on June 21, 2011
Im also doing to support Saab. But I have to cut back on most of the gadgets to keep the costs down. Looking at a reasonably priced Vector XWD Biopower M6. 353´000SEK.
Incl Car, winter tyres, removable towbar U-rail. No more, no less.
Less is more, someone intelligent once said.
MarkoA said on June 21, 2011
9-3X AT – my dream car. I wish I had possibility to come and buy your car! If I could sell my 9-3 SC Aero TTiD AT here in Finland, it could be possible. We have zero pre owned 9-3X (xwd + automatic) available here in Finland.
StefanH STHLM (www.bmsg.se/saab_sales.pdf) said on June 21, 2011
A fantastic car.
One slight downside is the fuel consumption.
City = 1,4l/mil.
Highway = 0,9l/mil.
Welcome over.
MarkoA said on June 21, 2011
@ Stefan – I know it´s fantastic car. And mileage is the reason why we did not choose XWD in the first place. But as for now my wife doesn´t need car for her job anymore, the consumption is not so big deal anymore. Actually now driving diesel will be more expensive for us because of yearly tax.
Rune said on June 21, 2011
At least that is some good news that is easy to comprehend!
Congratulations on your choice, I look forward to your reaction once you get to drive it!
StefanH STHLM (www.bmsg.se/saab_sales.pdf) said on June 21, 2011
michaelb said on June 21, 2011
The problem with this proposal is triple, but behind is a lack of overall trust:
a) As far as communication is right now, noone can realistically have any faith in future of the brand based on publicely disclosed information. Debt to suppliers is 500-600m SEK, corresponding to 60-65m EUR, which is in fact not a lot. Add a big fraction of the 45m EUR from Pang-Da, where revenues already have been received, but costs not yet arisen, and 90-100m EUR is just past and future supplier debt. From what has been communicated up to now, there will be 245m EUR in new equity, and an amount of 30m + EUR for the sale of the Saab facilities. Noone will believe in a long-term future for that brand, based on that information.
b) In delicate situations like that, proactive behavior of the debtor is key. The debtor has to signal early, that there might be delays in payments, and what steps he will take to resolve the situation. We all know, that the Saab management/ownership just did the opposite, and let the suppliers drive into the wall. Even worse, initially Saab representatives hit publicely at the suppliers, instead of telling the truth. That kills trust, instead of creating it.
c) The current management/ownership made consistently wrong forecasts about sales figures and production resumption (a `glitch). If suppliers compare both over time, at best they may interpret the management to be financially incompetent (while serious on the product quality side).
Add to that a global picture that contains important financial event risks:
d) In Europe, a potential default on Greece debt might result in an unpredictable cascade of event, with the banking sector in several countries being damaged, and the ECB sitting then on shitloads of bad assets already (PIG state debt, ABS paper and other non-marketable assets from PIGS countries).
e) In the US, Republicans are playing with fire and flirting with short-term government default. if Republicans don’t give in, a government default in the sense of a credit event is possible as well.
Think about the interaction of Saab’s situation and the global picture: SWAN’s new shareholders have an option to buy 54% of equity. If one of these two event risks materialize, they will probably not sign under the same conditions, even if they have undoubtedly the willingness to do so now. Thus, the payment is conditional on global events seemingly risky, and on the approval by Chinese and Swedish authorities.
In such a situation you want to see three things as a supplier:
- more upfront payment, 10% is not enough, 20% is better.
- participate in the cash inflow on a discretionary base: Thus, if the revenue from selling the property comes in, another tranche of 15% paid. Payment on delivery for any new deliveries.
- Show us a credible long-term business and financing plan.
This would be a more realistic proposal, and would recreate trust from suppliers. The other proposal is just: Take 10% upfront instead of zero, and hope for the best for the future.
Big suppliers with few dependency from Saab sales might just say, enough is enough, and not agree on Saab’s terms. With just-in-time production, this would be sufficient to bring Saab’s operation to bankruptcy.
Rune said on June 21, 2011
Muller reiterated this only a few weeks ago, when they announced the production would resume.
I am aware of the newspaper reports saying that suppliers had not been paid. However… These reports surfaced after the production had halted. And the reports did not make it clear whether it was referring to overdue payments or just ‘money owed’ in the more general sense.
Either way, the avalanche started with one or two suppliers demanding different payment terms. VM said he believed at the time they would accept normal payment terms, and eventually admitted he was wrong.
Of course, once the —- hit the fan, all bets were off and then the debts started mounting. I seriously doubt Saab owed the suppliers 500 millions back in March.
Most suppliers have been good to Saab, but AFAICT there is one or two exceptions.
Yes, Saab should have handled this differently.
Jeff said on June 21, 2011
On your three points– I think the 10% is a participatory gesture by Saab in the property sale income, so to call for 20% pretty much just eats into Saab’s current liquidity that is crucial until other streams (China, etc.) come online. Relative to multiple tranches, I think Saab is trying to keep it as simple as possible with the three month window they’ve presented. Subdividing it into 3 week segments complicates a matter that has gone on now for almost the same amount of time as this whole event has gone on.
I believe in Saab’s business plan, but I think they do need to lower costs. I’d love to see the revised business plan, as would suppliers I imagine too. On that point, I agree transparency is key. But I think you can probably infer what you need to based on what’s been said (and since most of their business has been conducted under the bright lights of the international media) what their plans are.
This isn’t just “take 10% upfront instead of zero and hope for the best for the future,” it includes COD terms which ensure all future deliveries are handled in a more upfront, accountable way. Building trust, one delivery at a time.
I wouldn’t make decisions based on the worst case scenario here, most economists aren’t predicting either of those situations (ECB cascade faults, US Debt Ceiling staying flat), and if either of those situations came to pass Saab would be the last thing on the suppliers minds. They have to operate based on maxing their profitability given the chance that the auto industry stagnates this year more due to weakened demand than anything else. I’m very much with Rune on this one though, Saab made mistakes, but the problem started with the suppliers, and as I said 10 minutes after hearing about the story that first day– this snowballing effect was an easy to predict and unnecessary outcome that could have been prevented if matters were solved behind closed doors. The media sh*tstorm is the last thing Saab needed, and is already affecting their future business plan negatively. Just more hurdles to overcome, but they’ll get through it.
Nissi said on June 21, 2011
Mullers offer is presented as a win-win offer. Better to get 10% than nothing. For suppliers who already have parts manufactured in their stocks to SAAB this can also be presented as a double win situation. But for suppliers with long production chains, sub-suppliers and no parts is stock the offer is not enough. They need much more money to start their own production chains again.
But even if SAAB sends them such money today (=full payment), those with not SAAB parts in stock most likely will not be able to produce and deliver in July, unless SAAB deliveries gets TOP TOP PRIORITY in their manufacturing plan. That priority definition might depend on how big and important 10% payment of due debts from SAAB is for the supplier. SAAB suppliers in Europe have SAAB in the accounting for 2010 as a not profitable customer (reconstruction write offs) with decreasing purchasing volumes. Bad signs for top priority treatment
According to what suppliers tell media Muller´s offer contains nothing new. So if these suppliers didn´t accept it one month ago, why should they accept it now? With European vacation periods coming in July and August, this is the worst possible time for suppliers to change already established production plans. The sales people now get the question from the production managers: Which other customer should we cut off, in order to deliver to SAAB? Most of them have already promised, and sometimes more or less overbooked their production capacity for other paying existing customers.
So if SAAB production can start in July, that´s a fantastic acheivement of the SAAB organization !
Khrisdk said on June 21, 2011
That’s the part of all this that most people and commenters her could learn from:
Wait and See.
Then you will know
Neverending analysis on basis of half facts only helps inducing depression
So far Saab has defied all analysis from both amateurs and experts.
till72 said on June 21, 2011
+1
Audun said on June 21, 2011
Yes, just wait and see.
Ralph said on June 21, 2011
Time will tell, wait and see….all very true.
However, the hard to resist ‘type and click’ character of a blog like this counters ‘wait and see’…
Khrisdk said on June 21, 2011
Yes, but as far as I can tell the “type and click” mostly serves to vent frustration and doomsday scenarios.
We all know that Saab is in trouble.
We are all frustrated.
My personal belief and analysis is that Saab still has a very fair chance of survival.
But I do not have any solid info to back this other than my own personal experiences and perceptions.
I am just not ready to go into depression mode online just because I can.
Which I think that a ot of people do at the moment.
I still want to support Saab, and I actually don’t care if the management has made errors or if they will make more, and the people trying to shoot down any info coming out as “Not Sufficient For Survival” can feel free to do that, but I will always regard them as just people that assume the worst by reflex
Ralph said on June 21, 2011
I agree with you and wasn’t trying to support the doom-writers here with my remarks.
In fact, funny enough every day I’m getting more confident that Saab has a future and that things will turn out right.
michaelb said on June 21, 2011
So if Saab production can start in July, that’s a fantastic achievement of the Saab organization !
If you read this as an unbiased outsider you think these guys here are living in a different world
Khrisdk said on June 21, 2011
Hmm…I don’t think that anybody is coming here unbiased.
Have you noticed that you just made a negative comment to a negative analysis, and that the last sentence probably was ironic?
Motoradd\'s Cat said on June 21, 2011
It’s the same old story: Cash Flow.
It’s flowing out faster than it’s flowing in (a bit like my bank account – wife keeps buying expensive shoes, clothes, handbags etc).
Many companies with full order books and expanding markets have fallen foul of this and gone bust as a result.
The only way out of this is to have investors with deep pockets so as to buffer out the cash flow issue and provide working capital for current production and future developments.
It’s hard being a small independant company, it’s even harder with the EIB and the National Debt office hampering every effort that Saab make in trying to secure investors. VM sure can source the potential investors, it’s the EIB et al who are causing the delays and issues.
However it’s not all doom and gloom. It is encouraging that the Chinese NDRC have shortlisted Youngman, and VM’s negotations with suppliers are on the right track.
Mynoob said on June 21, 2011
The word “on the street” is now that Muller has drained the inventory of Saab Parts in order to produce the cars during the first half of the year leaving them with empty inventories. The suppliers don’t want to supply Saab parts anymore, and EIB is pissed because their securities in Saab Parts is diminishing.
But these are just rumors.
Rune said on June 21, 2011
EIB does not have any securities in Saab to the best of my recollection.
What EIB have is a guarantee posted by the Swedish government. The government in turn has taken substantial security in various Saab assets. EIB is covered in all possible scenarios.
baas900i said on June 21, 2011
i sometimes think it would be better if su shut up shop for a week or two cutting off the journalists information supply and putting a stop to the rumor mill which is creating so much damage to the saab brand… am surprised at the total lack of support from swedish industry heavyweights… bankruptcy may be the best road, Kia declared bankruptcy in 1997 and has done ok since,
turbokalle said on June 21, 2011
Hi guys. It`s been a while.
I`ve been reading daily but have not had any reason to comment on anything for quite a while. Why? Because I just don`t know what`s going on and I don`t want to speculate. I do know Saab is short on cash. I do know Saab has to reach an agreement with its supplyers.
But I do not know any relevant facts about theese issues to make a sensible conclution about them.
I have no idea wether VM has done a good job or bad job so far because I don`t know what he has had to work with.
I ordered a new 95 SC a couple of weeks ago. That`s my contribution, as well as maintaining my current Saab at my local dealership.
I have hope and I have faith and I hope you guys have to.
Let`s keep hoping that everything will be sorted so that Saab once again can prosper and make our cars.
Carl-Henrik said on June 21, 2011
The same reason why I keep quiet. I don’t have the information to be able to comment and argument about things. I follow what is happening, but focus on the cars instead right now. I’m really thinking about a 9-5 SS Fjord Blue. But my economy isn’t 100% on that.. and the main problem is that I don’t need a car, even if I live in the north of Sweden….
David said on June 21, 2011
IMO I think it is time to face the facts. VM and Saab is doing what they can but they ARE hindered by the EIB and Swedish government to inject cash into Saab and paying the suppliers.
How many times have Antonov now been stopped? And for what reason exactly? It is now time to act for the EIB and the Swedish government needs to answer why they are not supporting swedish industry. I am on politically on the right and can only mention that there are no political parties to the right in Sweden anymore.
jouni72 said on June 21, 2011
Correct! Saab is doing what they can, there are parties ready to invest but they are not let in, why??? Antonov is begging behind the door of SAAB with money to enter in, Saab would like to open the door but somebody else has the keys and don´t give them. Why???
SaabSouth said on June 21, 2011
My biggest issue is the length of time it has taken to get to this stage…… surely this should have been sorted out weeks ago and secondly wht was VM so bullish about starting production and not stopping! If he is the one discussing terms with suppliers he knew that was not going to happen.
RS said on June 21, 2011
I got the impression VM deals with Pang Da, Youngman, Hemfosa etc. and it’s the factory management that’s working with suppliers. Kind of a chicken and egg situation when EIB and two-three governments stand in the way each time they thing they have found a solution.
Jeff said on June 21, 2011
RS is correct here– VM is much more on the company organizational side than the production/supplier side. But his voice has leverage, being the public face of the company has advantages and disadvantages. That’s why you’re seeing him apply pressure to make sure the suppliers understand how this deal makes sense not only for Saab but the entire Saab ecosystem, suppliers, investors, future supplier contracts, etc.
Thylmuc said on June 21, 2011
The last company that went titsup was Rover:
-egoistic moneymakers vs fanatic management
-overly huge workforce vs lean team
-bored workers vs motivated vikings
-opposed unions vs cooperative unions
-Obsolete range (except the 75) vs brand new one
-little technology vs high tech
-few people interested vs fanatic fans
I just cannot believe that Saab will fold. Maybe VM will have to give up, but someone else will pick up. Maybe Magna? Apple? A Chines company?
KarlR said on June 21, 2011
Many will soon follow! Thank you VM
http://ttela.se/ekonomi/naringsliv/1.1259800-saab-kris-tvingar-foretag-till-rekonstruktion
Rune said on June 21, 2011
Why not thank EIB or the swedish government?
This entire situation could have been resolved back in March.
Khrisdk said on June 21, 2011
If you blame Saab for this companys crisis, it would be absolutely in the same vein to blame EIB and Swedish Government for the Saab crisis
If you blame Saab management for Saabs crisis, you will also have to blame i3tex management for their crisis.
Same rules for all, thank you
Mynoob said on June 21, 2011
Come on, i3tex is not component supplier. It’s a service provider. Saab is just a small business within that company (8% if I remember correctly). The Saab situation may have been the triggering factor but any service company who can’t cope with an 8% loss of business should really not be in business at all. I promise you, If it’s only an 8% loss of business, it would be manageable. There are probably more to this.
So of course, you can blame Saab (god knows media will) but the fault is really with i3tex management for not managing this within time.
Khrisdk said on June 21, 2011
Thank you..
That was just my point.
marq101 said on June 21, 2011
Karl, what is your point? You think VM wants this, you think he did it on purpose. He needs companies like this. It is Saab’s loss too if a company has to file for bankruptcy.
Think of this: If VM and Spyker wouldn’t have fought for Saab so hard there would have been no Saab today
Alex L said on June 22, 2011
The last 3 years that company lost 55 million SEK. That company was probably in a bad shape already, and had plenty more customers than Saab. Blaming this entirely on Saab is wrong.
KarlR said on June 21, 2011
Rune, Because EIB have reasons for not letting Antonov in and its not EIB fault! VM is incompetent of running a big company!!
Khrisdk said on June 21, 2011
Are you also saying that the i3tex management is incompetent because they did not see this coming?
Mynoob said on June 21, 2011
Yes they are very incompetent!
Rune said on June 21, 2011
What may those reasons be KarlR?
The property deal was meant as a way around EIB’s long decision process, but surprise-surprise… Even then they wanted a word in. EIB stalling this deal came as a surprise/shock to everyone involved.
I guess the only satisfactory solution for you would be if someone appointed you the CEO of Saab?
KarlR said on June 21, 2011
Khrisdk, Hahaha some of you guys are just to funny! I do as SAAB do, no comment!
Khrisdk said on June 21, 2011
That is the prudent path, also taken by Saab
KarlR said on June 21, 2011
Rune, Grow up for christ sake! EIB have their reasons and have communicated them to SAAB and I have no clue what they are! EIB cant say anything until SAAB say it since the Bank secrecy and regarding the ceo thing, For sure
Rune said on June 21, 2011
Oh gee, here I was thinking that you actually knew something, since you so were so firm in your criticism of VM.
Let me try to shift the discussion a bit: I would go so far as to say that Antonov’s background history does not matter one iota. At least not as far as EIB is concerned. If a criminal mastermind decided to invest in Saab, I see no downside for EIB. Even for the government, I see few downsides other than risking Saab’s demise. As far as the loan goes, there are no downsides to modifying the ownership structure of Saab. Allowing Saab to operate normally will however produce a net gain in the future.
With me so far? Or do you see something I don’t? I suggest to you that it would have been better for all concerned if you were to discuss the issue at hand rather than continuing your ad hominem attacks.
Jeff said on June 21, 2011
Going further Rune, why is it that VA can’t invest in Saab but two Chinese companies can come in no problem? I’m baffled.
Rune said on June 21, 2011
Is that official though? I suspect EIB might have a say in that as well, unless VM is going for a deal that will pay off the EIB loan in full.
KarlR said on June 21, 2011
Rune, Oh gee I was actually thinking that you would write something that you havent before!
You think that just because someone is intrested on SAAB they should be able to invest? In that case SAAB shouldnt have borrowed money from EIB they knew what they got from the begining. I think EIB know exactly what they are doing and I agree with them! Otherwise SAAB should have made an offical pressrelease saying what they think are wromg from EIBs side!!
Rune said on June 21, 2011
I think Saab should have been able to sell part of their assets back in March after they had successfully negotiated a deal with the Swedish government.
And… Yeah, I also think EIB should stay out of the ownership question. Feel free to explain why EIB should interfere.
Quijote said on June 21, 2011
Embarrassing. And thanks to SU, its all over the media as well, including internet favorite Jalopnik.
Fiat, please come save us. Seriously.
Jeff said on June 21, 2011
It was Automotive News this time, not us. Ray likes to use them as a primary source
Kikaluka said on June 21, 2011
Is this really the site that is known for saving Saab? Seems like a lot of commenters forgot about that…
KarlR said on June 21, 2011
Quijote, SU havent been first with the news for awhile. Its TT they get it from!
Jeff said on June 21, 2011
Whoa there buddy. We broke the news of this story yesterday, you’re aware of that, correct? We reported it before anyone, period. Check your facts.
KarlR said on June 21, 2011
Jeff, You broke the news that it was a conference call. That was not much of a news! I think it was gp or di that wrote the intresting part(what it said in the contract). Correct me if im wrong!
Jeff said on June 21, 2011
Reread the post. We received the same information DI did, before they did. That’s what Tim is referring to in the original post. In fact, we have more than they even reported on (which they certainly would have if they had access), including details like how long the COD period lasts, etc. that we still haven’t spilled the beans on. We’re not here to air out Saab’s financial affairs, we’re here to report news to the Saab community. All GP.se added was the specific figures, 10% down, COD going forward, the rest in 3 months with interest. Tim referred to this as “generous and flexible for suppliers, and while I can’t reveal specifics, it gives them a concrete idea of when to expect full payment for receivables, plus overdue interest.”
We understand everyone wants every little nitpicking detail about Saab’s finances, but we’re never going to be the first ones to give out trade information like that.
Tripod said on June 21, 2011
Grumpier than ever before, KarlR; suppliers seems to be cheering, the happy-go-lucky kind of guys, compared to you.
Eh, no comments on Khrisdk’s reply to you about i3tex; perhaps you should think before you write.
It seems you were wrong about the news, KarlR; I’m not the least surprised that SU sometimes has some information that they can not post, until later on; and definitely most of the time they *add* information not found elsewhere.
lol said on June 21, 2011
I’m a little confused of the contents of some coments.
Where are we there ? SAAB supporters or no ?
OK situation is long, very long.
Do all negative coments I read can help in anything ?
I’m sure they don’t and quite sure they deserve SAAB.
KEEP CALM AND CARRY ON.
Nothing better to do right now, and keep faith !
SAAB Up!
KarlR said on June 21, 2011
Jeff, I dont agree with you! If you dont publish you cant be first just because you know things that you cant say! The number are very important and the most intresting of all!
Jeff said on June 21, 2011
If you don’t trust the things we say and the interpretation we give, then stop reading this blog
We published information that suppliers were presented with payment terms and given a short timeframe to be paid back in full. We even gave details of the conference call (VM’s mention of Youngman as the “preselected bidder” as he called them).
How is that 10% number valuable beyond us telling you we think it’s a fair shake? Are you better off knowing the number? How are you involved in this process? You’re clearly not a supplier or even remotely connected to one since you didn’t receive details of the letter or conference call, so you’re not a stakeholder in the decision. Why is it that you feel that you need to know every single detail about these transactions? Will knowing that suppliers are receiving 10% payment up front and will receive the rest by mid-September really going to impact your faith in the brand? Seriously?
I understand the feeling you and others have about getting information about Saab’s finances. You want to see them succeed, we all do. But really, as an enthusiast I can’t help but wonder if we’ve all gotten a little too obsessed with following every single little detail– it’s getting to be a tad much. I’m heartened to see the commenters here staying above the fray, asking each other to remain calm and have faith in the company’s management. If you don’t, then I’m not sure why you still bother to check this blog at all.
StateofNine said on June 21, 2011
Let us stay positive Saab enthusiasts. About Saab and to each other. There are a lot of jobs at stake here, not to mention the future of our favorite brand. The easy thing for VM and team to do is walk away, but they are not. Supplier must be happy with any dialogue.
It seems to me that these banks and politicians/governments still don’t want to stick their necks out for a little guy. What they don’t realize is this is how we end up with these companies that are too big to fail. Then we all end up paying for it. Saab is innovating, they are not just another automotive copy machine.
I think Saab should open their website up to let people pre-order custom-made cars now. Then procure the parts based on the orders received. Give the local dealer credit based on delivery address. I think high-end customers would much rather get a custom-made 9-3 as a city car over a tricked out Toyota with Aston Martin badge – for less money.
Stay positive everyone, this will get done. Go Saab!
Michael said on June 21, 2011
+1 on official custom-based cars. They may even hire someone to do custom work (HIrsch for engines and external stuff, “Saab Individual AB” for interior). Such cars (if made official) will create halo effect and boost brand image.
gryphon95 said on June 21, 2011
I genuinely love SAAB. I bought the first SAAB 9-5 Aero XWD sold in Washington, DC last August. As such, I am horrified by this threat from SAAB. I cannot believe that it would be legal in Sweden or any other country for a car manufacturer to bully suppliers this way. It’s like saying, “I owe you $500. Take $50 now and keep incurring more debt by giving me the parts I need to build cars. If you don’t, I’ll leave you high and dry.” I’d like to see SAAB act a little more ethically. Of course, I think SAAB would be more than a little upset if I decided to pay 1/10 of my car payment and — if SAAB said, “No. I want full payment.” — my response is, “Go screw yourself.”
Red J said on June 21, 2011
Gryphon95, you got something wrong.
Saab is saying we pay 10% of our debts and further deliveries will be paid on delivery, so no further risks are taken by the suppliers.
gryphon95 said on June 21, 2011
Thanks for the clarification, Red J. I agree that what you describe is nominally better. Still, I don’t think SAAB will be taking me up on my offer to pay just 1/10 of my car payment. At least, I haven’t gotten an email from VM taking me up on my offer. If SAAB is willing to treat their supplier this way, I think they should offer the same to their customers in reverse. The expression, “What’s good for the goose is good for the gander.” comes to mind.
Also, if I were in the suppliers’ shoes, I’d believe the COD terms when I saw money appear in my bank account. Actually, I’d insist on payment PRIOR TO delivery. If SAAB is going to be a company that threatens its business partners with bankruptcy if they don’t take unilaterally re-written contract terms, I have to re-evaluate my support of the brand. At this point, BMW is a more ethical company (at least, a more ethical business partner), and the new 2012 M5 is looking damn fine.
Tripod said on June 21, 2011
“At this point, BMW is a more ethical company (at least, a more ethical business partner), and the new 2012 M5 is looking damn fine.”
I think you are comparing apples and oranges, and you should know that; but if you think that model looks so great, why not go and buy one. Also, I don’t think they have made threats to “business partners with bankruptcy”; but I guess it feels good to rant about that.
Michael said on June 21, 2011
And 100% in three months. With interest. Have you bought your Saab with a single payment?
gryphon95 said on June 21, 2011
Michael, at this point, these are promises to the suppliers. Worse yet, it’s actually a threat being sold as a promise. Given how SAAB’s new business practice involves unilaterally rewriting contract terms, would you fault a supplier — with a gun to its head — for not being happy to float SAAB a loan.
I see my posts are not being flagged as “Your comment is awaiting moderation.” That’s new as of today. Should I assume that’s a privilege given to everyone who isn’t a blind and obedient fanboy?!?
Rune said on June 21, 2011
No. Swade explained the comment automoderator more than two years ago as I recall. Check the archives.
Another way of looking at it is this: The whole mess started with a handful of suppliers asking for COD. Fine, they got what they asked for, but everyone ends up miserable.
If you have ideas for a solution, then I’m sure we are all ears.
Khrisdk said on June 21, 2011
This is not a threath mad to the suppliers.
It is their options.
If they do not accept the terms Saab will die.
At the moment the suppliers holds the fate of Saab and not the other way around.
And they know that.
We have the same kind of customers as Saab at our company. We let them live, but tighten the screw a little bit every time they screw up.
While we evaluate their chances of survival every time
It’s business, and we take our payment and interest for the risk.
gryphon95 said on June 21, 2011
Accept it or get nothing is the very definition of a threat, not an option.
Khrisdk said on June 21, 2011
They have the option of starting Bankrupcty proceedings.
That may not give them all their outstanding money, but they can take their chance on that.
The options given are not defined by Saab.
I trust that it is the promise Saab is able to give AND keep.
saabluster said on June 21, 2011
You are insinuating ill intent on the part of SAAB management were there is none. You think it was VM’s plan to get the company into such a tight spot that bankruptcy was a real possibility? You think he enjoys knowing that if even one of those suppliers decides to refuse the latest proposal that may be the end?
The threat you speak of towards the suppliers is indeed real but it is not coming from management as much as from the situation itself. In other posts you speak of SAAB holding a gun to the supplier’s head as if SAAB held all the power when in fact it may be the other way around. The vast majority of the suppliers have been understanding of SAABs situation but remember it was a supplier who first held the gun to SAAB’s head. “Pay us everything now or we will bring your entire business down.” That is holding a gun to someone’s head if anything is.
The supposed “gun” SAAB is holding against their head is to get money COD which is far more generous than 99% of the auto industry and all debts payed with interest so that they will end up with more money than if this whole debacle had never had happened. That is a gun I would gladly have pointed at my head.
gryphon95 said on June 21, 2011
I am sorry if I mis-read my posts, but I never have said that there’s bad will on behalf of SAAB management. I just said that I find it unethical for a company to threaten and treat its supplier the way SAAB is. It will be hard for to continue my support of a brand that acts so dishonorably, and I sincerely hope that SAAB will reconsider this latest, unsupportable position.
You are insinuating ill intent on the part of SAAB management were there is none. You think it was VM’s plan to get the company into such a tight spot that bankruptcy was a real possibility? You think he enjoys knowing that if even one of those suppliers decides to refuse the latest proposal that may be the end?
Business leaders need to accept responsibility for their actions, not merely pass the blame to others. If not, they will lose the confidence of their consumers. What happens if SAAB does not honor the latest offer to pay suppliers for future deliveries on a COD basis but cites a bad “situation” as you cite above?
Again, that rosy scenario is only a hypothetical until another one of your so-called “situations” comes to pass. Then, you let management off scot free, based on your earlier logic, right?
I’m an owner of a new SAAB (2010) and an older one (2001) with other SAABs before and in between. So, I want the brand to survive. I’d like my next car to be a SAAB, but I don’t want to support a company that threatens and bullies its suppliers or otherwise acts in an unethical or illegitimate manner. That’s all. I’ve stated my view, so I’ll stop posting on this thread but keep a careful eye on SAAB’s next moves.
KarlR said on June 21, 2011
Jeff, I was going write an answer but why bother when no one listen!! You and SAAB MGM can keep scratchin each other back, Im off have a good week!! And regarding youngman its old news!
3cyl said on June 21, 2011
SAAB has misled their suppliers, dealers and customers undermining confidence in the brand. The “New” 9-5 was released as a 2010 model – albeit a late release. New England has traditionally been a good SAAB market, but I have never seen one on the road. Also, the 2012 model year is about to begin, so the 9-5 will be a two year old not-so-new design. The suggestion on this site that SAAB owners help out by buying spare parts adds bitter reality to the tired “sob” story routine. I have owned SAABs continuously since the two-stroke days. I hope things work out for them
gryphon95 said on June 21, 2011
3cly – Like you, I don’t know what I am supposed to do now to help the brand. I bought one of those 2010 SAAB Aero XWDs the moment it rolled off the delivery truck (I had put down a deposit 5 months earlier). I don’t need any spare parts for it because it’s a new car. My 2011 SAAB 9-3 SE is in great shape, runs fine, and isn’t in need of anything. So, like you, I hope things work out fine, but I’m at a loss for what else I am supposed to do especially as SAAB changes its business practices, unilaterally rewrites its contract terms with suppliers, and points a gun at the head of its sub-contractors.
hughw said on June 21, 2011
I think it’s pretty pathetic if anyone thinks that it’s going to help Saab if we buy spare parts. The only thing that is going to help Saab is themselves. First they need to get their finances in order. Then they need to produce cars and market them heavily. Selling cars is their business. Until they can sell cars in the quantities that they need, there is little any outsider can do,
No 9 said on June 21, 2011
This proposition gives me hope but the parts situation, which is of course abominable in Canada, devastates me.
Also, I can still hear Victor Muller telling the employees this (production stop) will never happen again… How could he say that when he obviously new it was going to happen again and very soon. That was one lost occasion to shut his trap and a blank bullet fired for nothing.
On the brighter side, the province of Québec’s biggest used car dealer is opening shop at SAAB Québec (in the city of Québec). This way, the owner will be able to hang on to his SAAB franchise. His yard is well garnished with unsold 2011 models. With no lease program worth mentioning, most of the rare traffic that makes it to his showroom just turn their heels and go to Audi, BMW and the likes. Real shame.
CYQB said on June 22, 2011
Hi No9, A good new for Saab de Québec. I was there last monday ant they told me they had a good week. Some 2011 Saab got new owners! I guess june is the best month so far for them. June is not over yet and they may sell a couple more.
No 9 said on June 22, 2011
Bonjour CYQB.
According to their excellent SAAB tech, who comes from my ex dealer in Lévis, they are doing well selling used SAABs. There is an immaculate 2002 9-5 on the lot which tempted me.
Where are you from?
CYQB said on June 22, 2011
Bonjour,
I am from Québec city. So, we have the same mechanic, Raynald! A very good guy. I bought my firsts Saabs at Saab Lévis. When I am going to Saab de Québec, I ask for him because he did a good job in the previous years. I will remain a customer for him in the future, I got an other 9-3 three weeks ago.
Steve B. told me the same things about the used Saab. It’s very good. I didn’t see a 2002 9-5 but I will go to have a look. I am curious! With Encan Grégoire in the building, the future is looking better. They are supposed to build a separate showroom for Saab in the actual building and a separate servicing for Saab’s customers. I hope that will bring more people.
I may see you at the dealership.
No 9 said on June 23, 2011
Tu peux me joindre par Facebook si tu veux.
Pierre Terrien
hilmar said on June 21, 2011
Hi folks, what about one minute of silence or perhaps longer ? Just to calm down ?
Khrisdk said on June 21, 2011
Enjoy
Tripod said on June 21, 2011
Thank you.
(By the way, no one here has made me laugh as much as you did in some of your comments about the Danish-Swedish relations, such as the one about Kalmarunionen.
http://www.saabsunited.com/2011/05/nice-residual-news-from-saab-gb.html#comment-133195
And since laughing & smiling is definitely good for ones health, so, my best wishes to our brothers and sisters in Denmark.)
gryphon95 said on June 21, 2011
I agree – a moment of silence would do us all good. I also hope that the management at SAAB uses the moment of silence to reconsider some of its decisions. @Khrisdk, nice link to Lacuna Coil.