Press Release: Saab Automobile To Improve Efficiency As Part Of Business Plan Review

Trollhättan, Sweden: Swedish Automobile N.V. (Swan) announces that Saab Automobile AB (Saab Automobile) has launched an efficiency improvement initiative as part of a broader review of the company’s business plan for 2012 and beyond, aiming at creating a more flexible and more competitive cost structure for the company. This initiative also reflects the effects of the prolonged production stoppage since April of this year and is an important element of the voluntary reorganization plan that will be presented at a forthcoming creditors meeting.

During the coming weeks, Saab Automobile will identify areas throughout the whole organization where efficiencies can be gained. The initiative will focus on both fixed and variable costs and aims to create a lower and more flexible cost structure within Saab Automobile by eliminating duplication of work, streamlining processes, shortening lead times, improving coordination between departments and simplifying the organizational structure. As a result of this initiative headcount reductions cannot be ruled out. All improvements should be implemented before year-end in order for Saab Automobile to have a new, competitive cost structure for the 2012 financial year.

It looks like our friends at Saab only took a quick look at the champagne bottle and went straight back to work. Rightly so. Implementing the improvements until the end of the year is quite ambitious but it cn’t come soon enough.

Rogge
Member
5 years 5 days ago

I hope Victor hold what he has said.

JasonPowell
Member
5 years 5 days ago

I’m sure Victor will do what he has said he will do as long as it’s in his control. We don’t need to speculate as to what he may or may not do though. This man has never, ever stopped working on saving Saab and we all owe him gratitude if nothing else.

spacy
Guest
5 years 5 days ago

.
Actually many decisions will no longer be in VM hands.

Guy Lofalk is the administrator, thus, he, now virtually controls what goes on…..

Belfast_Saab
Member
5 years 5 days ago

+1

OddJob
Member
5 years 5 days ago
This is a statement for the ambition of the reconstruction. And there will of course be some gains in it. However think there are not any dramatic changes that can be made. Employees at Saab shouldn’t worry to much about their employment but they may be reallocated within the company . In media (especially Swedish) you often hear ‘why don’t Saab cut down onemployees yada yada….’. The answer is simple: Saab alredy did that before h**l broke lose in 2008. In 2003 Saab employed over 9000 people if I remember things right. Today they are about 3600. If we forget… Read more »
turbin
Member
5 years 5 days ago

Agreed.

Katsura
Member
5 years 5 days ago

I hope this doesn’t mean too many job cuts…
In corporate terms “improve efficiency” usually means unemployment for some ppl.

liftarn
Member
5 years 4 days ago

It does say “headcount reductions cannot be ruled out”.

Jeff
Member
5 years 5 days ago

There were some serious mistakes made by a few very key people within the organization. They should feel happy that the company has made it through to this point despite their miscalculations, and understand why it is they’re being let go. No one will be let go for doing their job well, it’s the ones who aren’t pulling their weight who will go. And as sad as it is to lose staff, I’d rather see those who have the right skill set be promoted and those who don’t understand the new reality Saab is in leave.

JasonPowell
Member
5 years 5 days ago

+1000 Jeff, so very true

ivo 71
Member
5 years 4 days ago
Don’t know about the rest but those in charge of the execution of international marketing and advertising who went down a wrong road are no longer with Saab. Since that post is virtually vacant now, I think Saab should be very careful in whom they select to tell the world that Saab is still around, and with a vengeance, too. Because that’s gonna be a one-shot opportunity only, especially in north America. One guy comes to mind. No longer the youngest perhaps but maybe youth and dynamism isn’t what is most required in this specific case. The gentleman in question… Read more »
RS
Member
5 years 4 days ago

Ivo, Swade say the other day that David Pugh is the new Head of Marketing and that they work in the same team.
Hopefully they’ve been in contact with Curvin? 😉

RS
Member
5 years 4 days ago

Got to stop typing and changing sentences in a hurry.
*said*

ivo 71
Member
5 years 4 days ago

Ohe, and yeah, it was Curvin I was talking about, of course. Bob Sinclair is no longer around, more is the pity.

Ivo

ivo 71
Member
5 years 4 days ago

Must have missed that one. His Linked In info still lists him as the Marketing and PR Director at Saab GB. And I can’t find any info on his promotion via Google. You have a link to the announcement of that appointment?

Ivo

RS
Member
5 years 4 days ago

I believe it was just mentioned in one of the VM’s B-Day threads.

ivo 71
Member
5 years 4 days ago

Well, so be it, then. Like I said, I hope someone in THN has Curvin’s phone number.

Ivo

nichell
Guest
5 years 5 days ago

I hope with this new wave of ‘headcount reductions’, they don’t cut Swade. That would be , oh so mean of them. The meanies.

JasonPowell
Member
5 years 5 days ago

I think he is needed more than ever now.

saabyurk
Member
5 years 5 days ago

+900 on that!

Chris Carrier
Member
5 years 5 days ago

Can you imagine the backlash of the Saab community? That would be a bad move.

100%Saab
Member
5 years 5 days ago

The last reconstruction ended three months too early. So, don’t rush things!

Just a thought.

Chris Carrier
Member
5 years 5 days ago

Is Jason Castriota still the chief designer at Saab?

Sensonic
Member
5 years 5 days ago

Please just don’t sacrifice the quality and the durability of the cars! Nowadays everybody’s thinking that “good enough” will do. I don’t agree.

Bravada from GMI
Member
5 years 4 days ago
OK, so after failing on the sales&marketing and aftermarket fronts, the restructuring aim is to look to reduce headcount? I am very sure this is not the remedy. You won’t be able to build cars without people building them. I would have much more like to hear Saab will work with the supplier base, even changing some of it and paying off the ones let go, in the meantime, to make the cars cheaper, less complicated to build, less spare part and componentry stock needed etc. If a single car comes off the line with the Premium 70 stereo, without… Read more »
Thylmuc
Member
5 years 4 days ago

Tough stuff. I know people who don’t like Xenon headlights. What are you going to offer those? The tough part is to find the right mixture between cost reduction (mass producer) and individualisation (premium).

RS
Member
5 years 4 days ago
You hit the nail on the head there Bravada, maybe minus ‘only Xenon’ lights. If they want cuts throw out the low(er) quality GM parts bin that brings no value to the company but just the opposite. It will do wonders to the second hand market in a couple of years if and when there are only 100% quality Saabs out there. This is how you make your mark as an independent manufacturer. Don’t use interior parts that can’t take wear and tear! IMO all Saabs don’t need to be fully loaded (expensive) though. A base FWD, without all the… Read more »
Bravada from GMI
Member
5 years 4 days ago
Oh, I disagree. Quality costs. Saab doesn’t have the time and money to suddenly replace the entire interior with higher-quality parts, have suppliers develop them and ramp up production, while current suppliers remain unpaid and restarting the assembly line is a priority. Saabs do need to be expensive. Period. Saab still has high fixed costs as a fully-fledged carmaker with a small production capacity, plus they build high-quality cars and employ premier people. Those costs can only be covered if you sell cars expensively. There is no point in a cheap Saab that is still more expensive than a cheap… Read more »
RS
Member
5 years 4 days ago
I said Saab pricing should start above its current price competition -Skoda, Ford etc.- but the brand shouldn’t be expensive/overpriced. There’s a huge difference if the starting price for a base car is i.e. 3-4.000 euro more as these “Premium” 70 sound systems, or saving on seat fabric wouldn’t then even be considered. I was not talking about revamping the interior in a 9-3. I was merely saying parts that are of a lesser quality than what’s found in an OG 9-3 should not exist a newer model. You must be living in a country where cars are not heavily… Read more »
Red J
Member
5 years 4 days ago
Gents, could we please stop comparing apples and pears, please? Saab is a global brand but has to sell to the local needs. Just as an example, high tax countries need basic models, otoh countries like the US demand full featured cars. Saab should treat every market locally, and within a range, even create local models. As an example, I talked lately with one SU reader from Norway, and it looks like if Saab would down-tune the TTiD engine to 115 hp, the 9-3 SC would be less expensive for the customer than an Hyunday i40, and Saab would sell… Read more »
Bravada from GMI
Member
5 years 4 days ago

Nope, Saab should just build Saabs and sell them where Saabs sell, and forget about the markets where they don’t. Fiat doesn’t try to sell us a Ram pickup or a Dodge Charger here in Europe, neither do they offer the Panda in the US.

Down-tuning the engine could be done at a dealer’s facility, or even at the assembly line, it doesn’t cost much extra. Two types of side mirror switches and a gazillion wiring combos do.

Pedro
Member
5 years 4 days ago

Agreed, Bravada. One of the mains issues (if not the main issue) is how to get to those high average sales price per car figures (i.e., high contribution margin per car sold) that allow the structure to at least break even at those 100K/year or 80K/year sales volumes levels that have been at the core of what SAAB has communicated as its intended break even point. Not sure there’s much mure structure to cut over there…

Khrisdk
Member
5 years 4 days ago

Yes, but I sure hope that someone remembers that in some markets a €100 price change is €350 at sale..

Ken H
Member
5 years 4 days ago

You won’t be able to build cars without people building them.

Yep, and they gotta start building them asap.

matsthn
Member
5 years 4 days ago

Marketing and sales was a failure I agree. But another failure was not understanding from the start after separating from GM that Saab would need additional capital to keep going before they could survive on their own. Unless the new investors are willing to put in some 500-600 Million $US per year for the next 3-5 years then I fear this isn’t the end of the rollercoaster ride for Saab.

hans h
Member
5 years 4 days ago

I think Saab calculated that VA would be that investor, but then EIB and svegov stalled, and he was ultimately prohibited to invest. And as time passed, Saabs money ran out.
Somebody or something would for some reason rather see Saab dead and buried than in the hands of VA. I don’t know why.

jouni72
Member
5 years 4 days ago

This is also my feeling about situation.

Bravada from GMI
Member
5 years 4 days ago

I don’t think more capital was needed. Faster sales growth, more stringent cost control and prudent cash management should have been de rigeur. You can do any business if you have three times the cash needed, but it’s not about that, that’s how oil sheiks do business. Saab was the oil sheik here, they tried to play in the automotive business like the big boys do, being only a small boy. A small company can survive if it’s small, nimble, efficient, creative and unique, both in its products and the ways they do business.

ivo 71
Member
5 years 4 days ago
Bit easy, I think: “…I don’t think more capital was needed. Faster sales growth, more stringent cost control and prudent cash management should have been de rigeur…”. How do you realize a faster sales growth when you only have 2 models -at the time- one of which needs to be replaced and the only other that you can supply, only just introduced, is in a price category that is the hardest hit saleswise in the middle of a recession? And the third model, the 9-4X, will not become a segment volume seller as long as Americans still have to worry… Read more »
hans h
Member
5 years 4 days ago

I hope someone (Swade, perhaps?) is keeping notes on what’s going on behind the curtains, because someone needs to write a book about this episode. It will be a real thriller. 🙂

Bravada from GMI
Member
5 years 4 days ago
1. If Saab would agree that the two models can’t sell more than 30K a year, then the business is dead in the water and no point resturcturing it. But with an even older 9-5, less fuel-efficient 9-3, no XWD, no 9-3X etc. they’ve sold up to 90K. Even when the vultures started circling. One could have ramped up sales faster with better marketing, pricing, packaging, more effort, better focused effort etc. Spyker simply printed GM brochures with “2011” on them and waited for the loyal fans to come. 2. Costs are a problem, but not the production costs, but… Read more »
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