Life goes on after the termination notice

Yesterday afternoon several news sites on the web featured stories about Saab/Svan still being in talks with Pang Da and Youngman. This is not a big surprise. Some deals that the parties have agreed on earlier are still standing so there is definetely need for further talks, even if not on the highest level. From ttela.se:

“There are ongoing discussions between for example lawyers to see what solutions exist. I will personally not be there until the conditions exist for a deal to really take place,” said Victor Muller to news agency TT on Monday afternoon.

On Bloomberg Businessweek we can see quotes fron Pang Da

“All plans that are beneficial for Saab should be discussed during the reorganization,” Pang Qinghua, chairman of Pang Da, China’s biggest auto dealer by market value, said in a telephone interview. “We have been in touch after the weekend announcement and continue to look at new proposals.”

and Youngman:

“We would still like to continue helping Saab, directly providing short-term and long-term funding to Saab by way of other investment schemes,” Youngman Lotus said in a statement today, adding that it regretted Saab’s “unilateral” decision.

No surprise in that.

On a personal note I can say that the indications we get about North Street Capital are quite promising and I have high hopes in them not only to provide the bridge financing but also a further partnership. Rest assured that behind the scenes there are a lot of things going on right now. Another piece from the ttela.se article:

“It is not clear what the next step is right now,” the company’s Ms. Gustav’s said this morning, and that in the current situation there is no evidence that the promised investment from North Street Capital would not be going on. The way the news of the U.S. investment came on the last Thursday might otherwise be interpreted as also was part of the negotiation game with Chinese companies.

ADDITION FROM JEFF: NSC was not a part of a negotiation ploy, they’ve been working on this deal for some time now and are there to make sure Saab has an exit strategy an avoids bankruptcy.

And of course the automotive analysts also jump the train now (from Bloomberg Businessweek again):

“Failure of the Saab deal may be a good thing because Pang Da and Youngman can’t save Saab no matter how much they invest,” John Zeng,a Shanghai-based analyst at J.D. Power & Associates, said in a telephone interview. “Only a big automaker has the means to revive Saab, which is not only debt-ridden but also having problems on their branding and technologies.”

I tend to disagree with that, especially the last part. There are quite a few state of the art technologies like eAAM in Saab. I would not want to see Saab under the roof of a big automaker again as the benefit of independence is the ability to choose different partners when it comes to sourcing technologies (see the BMW engine agreement) When it comes to saving the company what is really needed is a stable partner with deep pockets that can finance the process of building up the company over three to five years. At best, someone like Tata is to Jaguar/Land rover, someone who is providing financing but leaves the strategy of the brand to those who work there as they should know it.

Regardless of a possible new partner Pang Da and Youngman can still be in the picture as partners for distribution and manufacturing in China as this is something that Saab definetely needs. I would imagine that Pang Da would like to get the cars they already paid for. The development of a sub brand for China as it has been mentioned before may be an additional income for Saab. There just can’t be enough things to make money on for Saab.

In the meantime we will again be forced to join the rollercoaster ride as passengers. But as the court decision about reorganization will already be this week I expect many things to happen within the next few days. No need to panic on the home stretch. Just wait and see.

Tripod
Member
4 years 11 months ago
And of course the automotive analysts also jump the train now (from Bloomberg Businessweek again): “Failure of the Saab deal may be a good thing because Pang Da and Youngman can’t save Saab no matter how much they invest,” John Zeng a Shanghai-based analyst at J.D. Power & Associates, said in a telephone interview. “Only a big automaker has the means to revive Saab, which is not only debt-ridden but also having problems on their branding and technologies.” I tend to disagree with that, especially the last part. There are quite a few state of the art technologies like eAAM… Read more »
peeceepeh
Member
4 years 11 months ago

Excellent write-up, TILL72. Thx.

Coke is it
Member
4 years 11 months ago

I agree that Saab has technology others may be interested in.

I don’t agree with a big automaker as a dissaster for Saab. If it is the right automaker there would be nothing to be scared of. The VW group as owner would just rebrand Skoda as a Saab in the same way they rebrand Skoda to be an Audi today by adding some bling bling.

BMW would probably understand the value of independence but also the value of sharing some components.

I still think BMW would be great owner even if I personally never would buy a BMW.

moose
Member
4 years 11 months ago

Assuming that we haven’t heard anything about finalizing paperwork with North Street Capital yesterday, this deal is not going forward either?

“The object of the parties is to finalize documentation no later than Monday October 24, 2011 with subsequent funding within two days thereof. “

Tripod
Member
4 years 11 months ago

At this very delicate point time, this week, with upcoming hearing etc. I don’t think you will hear news at every step, until something more substantial is presented.

The press release, from Thursday 20 October, said it was the “object of the parties is to finalize documentation”; things also happened during the weekend, as you might know, things might be delayed just slightly due to several ongoing processes; people can’t be everywhere at the same time, so why do you have to nitpick about that; now?

Khrisdk
Member
4 years 11 months ago

To quote yourself from yesterday:

Time will tell

Khrisdk
Member
4 years 11 months ago

Oops..was that you?
Oh anyway. Time will tell

Örjan
Member
4 years 11 months ago

According to Reuters the chinese still thinks the agreement is valid. See article here

fido
Member
4 years 11 months ago
i disagree with John Zeng. Only a big automaker has the means to revive Saab Totally wrong, how many automakers bigger than GM? and Skoda, if you sit inside, without look at logo on the wheel, and look around, it’s very hard to find a different than mass VM cars. Skoda does not have a soul. and the engine , think about 2.8T in 9-5 and 9-4x, GM just don’t build it soon. buy engine from BMW because SAAB just no choice, customer don’t want buy a high price car with a cheap engine. looks so cheap. That is way… Read more »
RS
Member
4 years 11 months ago

Hold your horses there Fido. There is nothing wrong with 2.8T and it’s most certainly not made of cheap parts.
Personally I think they should also have something above that in the future but nobody knows the full story of the GM’s power restrictions for Saab. Which BTW is totally insane!

fido
Member
4 years 11 months ago

I think only thing make SAAB unique is design.
e-AAM or e-power or phoenix’s modular platform will not be SAAB’s unique technology, BMW/VM/Volvo already have the similar technology or developing now.

michaelb
Member
4 years 11 months ago
Fido, no it is not, it is the ensemble, the overall combination of design, functionality, safety and advanced technologies, that is unique. The 2.8l is very good, not at all cheap, has been refined by Saab over time. There are now – few – better engines in the marketplace, above all with respect to fuel efficiency, for example the new announced future BMW engines. They will run with 2-3l/100km less. Against the rest of the crowd, the 2.8 is still very much competitive. What Saab really lacks, is a smooth, powerful 6-cylinder Diesel for the European market. The current 4-wheel… Read more »
fido
Member
4 years 11 months ago

i mean SAAB must develop its own engine. the supply can be controlled by GM or BMW.

No rival will offer you their best components with right price.

Kimberly
Member
4 years 11 months ago
@fido >i mean SAAB must develop its own engine. the supply can be controlled by GM or BMW. An entire engine isn’t practical. It would be easy enough for SAAB to do what they did with the GM engine; their own intake and exhaust designs using proven off-the-shelf components (turbochargers, etc.) and whether it’s from BMW or GM, or even VW, who cares, as long as the reliability and availability are there? As far as “supply controlled by GM” – GM really can’t prevent anyone from buying their engines – heck, even if GM were to attempt to put a… Read more »
hans h
Member
4 years 11 months ago
but nobody knows the full story of the GM’s power restrictions for Saab. I always wondered how a normally aspirated 3-litre V6 could have more hp in an Opel/Vauxhall Omega than turbocharged in a Saab 9-5. I figured that the torque would differ (which I’m certain it does) and that Saab somehow presented the car with engine figures a little on the low side. Something that also Porsche does. 🙂 But apparently it was GM that ordered Saab not to surpass Opel. Why would they do that???? When the whole point of buying Saab was to get a european “premium… Read more »
michaelb
Member
4 years 11 months ago

Most important thing is to get sufficient liquidity immediately in order to survive likely end of reconstruction. Then complex negotiations with the Chinese to maintain the JV, getting in a new shareholder with financial muscle, in order to restart production. Then look for a long term solution, that makes sense business wise.

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