US Notes on Reconstruction

We’re all pretty familiar with what’s going on in Sweden tomorrow regarding the court’s decision on reconstruction. While surely they’re under pressure, SCNA made the following statement to us and all other US media sources by email yesterday:

Today, Swedish Automobile NV (SWAN) and Saab Automobile AB in Sweden have announced an application for protective action to secure the Saab entity and enter into an official voluntary reorganization of the business. This filing does not include Saab Cars North America and our operations continue as normal.  Our intention at Saab Cars North America is to continue to support our customers with premium customer service well into the future.  Our focus at SAAB has never changed and will continue to be, producing world-class vehicles that reflect the SAAB brand that inspire our owners.

Indeed, in the press conference Victor Muller states that it makes no sense to drag SCNA or Saab Cars UK into this reconstruction, as they operate semi-independently. Also, Automotive News spoke with Tim Colbeck today about what reconstruction means for North America.

Read about it after the break.

Tim Colbeck is optimistic about Saab’s future even after SWAN’s filing for reconstruction. He’s aiming to keep the lines of communication open so consumers and dealers get a clearer picture of what’s going on.

“It is business as usual,” Colbeck said. “We want to communicate this especially to the public because I think there is a misperception that this is a bankruptcy proceeding and that the company is bankrupt.”

“In essence it is a transitionary stage for us to really get us in a solid footing to relaunch the brand with new equity partners and recapitalize business,” he said.

Dealers were alerted in the morning, and Saab management held a conference call with dealers yesterday afternoon.

Lynn Thompson, a Springfield, Mo., dealer who sells Saabs, Cadillacs, Buicks and GMCs, said the announcement was inevitable. “Something had to be done. Is it reorganization? Is it bankruptcy. What exactly is it?”

Over the past year, “too many times people were saying, ‘we got it done. We got this done and then it would fall apart,'” said Thompson. “There is a reason it kept falling apart. That leads me to believe there is more to it than reorganizing.”

Bernie Moreno, president of Collection Auto Group in the Cleveland area, and a member of the Saab dealer council, said he remains optimistic about the brand. The group also sells Acura, Buick, GMC, Lotus, Infiniti, Mercedes-Benz, Porsche and Smart.

“You have to remember that two years ago everybody wrote off Chrysler and now they almost outsold Toyota last month,” Moreno said.

“If this was a situation that was happening in ’06 or ’07,” before the economy tanked and General Motors and Chrysler went through bankruptcy, “then I would be really concerned. But I think at the end of the day (Saab CEO Victor Muller) will pull it out, and Saab will be right on track and move forward.”

Good to see that the dealers still have faith in Muller, as most of us do here as well. Colbeck also said Saab opened a central call center today to answer owners’ questions about parts availability, warranties, and other topics. An example is that vehicle warranties are the same. There’s also a statement posted at saabusa.com.

“We believe that communication is critical in this time frame so that everybody knows exactly what is gong on,” Colbeck said.

Regarding floorplanning, Colbeck said its lender, Ally Financial Inc., formerly GMAC, is supporting Saab and its dealers.

“They see no financial impact of this reorganization. They continue to lend for retail and wholesale to dealers that are creditworthy. They are supportive of the Saab business,” Colbeck said.

While we’ve always been under the impression that 9-4X production for 2012 would be starting up soon, since GM is a supplier, that’s up in the air now too. If you want a 9-4X, go get a 2011 while you can.

“GM is a supplier and now all suppliers are being treated equal,” Colbeck said. “Can’t be sure what is going to happen for the next model year. That will be determined during the scope of this reorganization.”

On the status of SCNA, Colbeck told Automotive News:

Colbeck said the North American organization is a separate subsidiary and it will not be reorganized. It employs 64 and there have been no layoffs since production in Sweden was halted in June. North American salaries have not been affected by the reorganization in Sweden, he said.

If the court approves Saab’s filing, the reorganization period will be for three months, but the court could extend this period after then to a maximum of twelve months.

At the same time, Ally Financial, Saab’s US Financial lending partner,  said today that it does not expect any material financial impact due to the reorganization. Ally Financial’s Swedish subsidiary, GMAC Financial Services AB, is a creditor of Saab Automobile AB and as such is taking the necessary steps to protect Ally’s interests during Saab’s reorganization, the company said. Ally said it will continue to provide automotive financing products and services to creditworthy Saab dealers and consumers during the reorganization process.

Frank Wulfers
Member
5 years 20 days ago

What happens to parts availability and warranty coverage if Saab does go into bankruptcy. What if there will be no more Saab in the near future? I am thinking of buying a new Saab but am a bit concerned..

Frank Wulfers
Member
5 years 20 days ago

Thanks Jeff. My main concern is for the newer models like the 9-5 and 9-4X. Not many 9-4X have been produced so making parts for these probably isn’t going to be profitable. Is GM still responsible for these models and making sure parts are going to available for the next 10 years?

I requested more information from SCNA but haven’t heard back.

Frank Wulfers
Member
5 years 20 days ago

I thought I read about that part about GM as well but wasn’t sure. Thanks for the clarification. Maybe I’ll go buy a 9-4X this weekend. 🙂

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