Automotive News: Why is GM acting that way?

Automotive News’ editor-in-chief Keith Crain published a post today that is worth a read. Here’s a quote:

Something is going on that I don’t understand.

By not approving the deal, GM is more than willing to let Saab close, costing thousands of jobs in Sweden, while letting its own Chinese partner have more technology.

That’s a bad way to make friends and influence people, particularly people in Sweden. If GM were responsible for the death of Saab and the loss of jobs in Saab’s home market, GM could forget about selling cars in Northern Europe anytime soon.

I understand that this may be a cutthroat business. But GM should look at how Ford handled the situation when it sold its Swedish company, Volvo. That seemed like a very civilized transfer, and Ford acted gentlemanly the whole time. That might be something GM should study.

I’m not playing favorites. But if Saab is to die, it should happen in the marketplace, not in some corporate boardroom without even a fair hearing.

There are sales and purchases in the automobile world all the time. But I have never heard of a company withholding permission that could kill somebody else’s deal and somebody else’s product.

This business is tough and downright cruel at times, but no company wants the reputation of being a deal killer and putting people on the street.

This is something I had on my mind already but it is good to hear words like that from another publication that SaabsUnited. It shows that it is not only us thinking that way. Saab deserves a chance to bring their products to market and let the customers decide if this brand is good enough to survive. Some may say that Saab had this over the last two years but the truth is that the crucial 9-5 SC and the 9-4x are still not released in all markets. When those models hit the showrooms and the next 9-3 is revealed and on sale, then it really counts. The we will see what an independent Saab has to offer.

TurboLamko
Member
4 years 10 months ago

Thanks for sharing this Till72 😀

Fingers are crossed for the best despite the situation

900 classic cab
Guest
4 years 10 months ago

Good post. I particularly liked ” But GM should look at how Ford handled the situation when it sold its Swedish company, Volvo”.
I wish the decision makers would read stuff like that and have it in account.

Audun
Member
4 years 10 months ago

If GM let Saab die I’ll never buy a GM product. I’ll buy Volvo or Ford.
If GM let Saab live on I’ll buy Saab with GM parts.

Bravada from GMI
Member
4 years 10 months ago
I don’t think PR really matters for GM, and Northern Europe is not that huge a market (even if with brisk GDP growth, Sweden is one market not to be overlooked in turmoil-ridden Europe). What matters is the future revenues from OEM vehicle manufacturing (9-4X), engine sales (9-5, 9-3), as well as simple licensing fees and shared component purchasing. The ability to share development of some limited-volume techology (like eXWD) is also a bonus GM should not give away so easily. In particular, the 9-5 and 9-3 almost double the output of GM’s 2.0 Turbo, and Saab makes the whole… Read more »
fritzeg
Member
4 years 10 months ago

Seriously. You just said “GM” and “good business” in the same sentence? GM has been mis-managed for decades. They’ve had their butts kicked by competitors, especially the Japanese, because they build crappy cars, and give expensive, lousy auto and customer service. They are a joke and if it wasn’t for the US government and their ridiculous bailout they would be no more. I have never been a Ford automobile fan, but at least they know how to run a business.

900_S
Member
4 years 10 months ago
Yeah, I think a lot of people see GM as a fat, ignorant, mean/stubborn American businessman or CEO. The type who’d spend millions just to save a nickel, slowing running the company into the ground. As has been said, it seems worth their while to find a deal to keep Saab going. I imagine they have an idea of when it would no longer be worth the trouble. Both GM and Victor are trying to get the most out of this deal, the only difference is GM isn’t going to go under depending on which way the deal goes. I… Read more »
900_S
Member
4 years 10 months ago

+1 to Bravada

Chicago Swede
Member
4 years 10 months ago

Exactly! Why was Ford able to complete their transaction with Volvo so quickly and while SAAB is literally hanging by a thread because of GM??

Tripod
Member
4 years 10 months ago
You asked that question in another thread; my reply then, from my point of view, was that it wasn’t that quick (though things in this business often takes some time, so perhaps it was close to normal); the US company negotiated directly with the Chinese company; and finally, there might be differences between Ford and GM and their presence on different markets, i.e. partnerships in China (as well as the fact that some Saab/GM tech has already been sold, complicating it a bit perhaps, i.e. more players involved). So, it wasn’t very quick then, and there are some differences. A… Read more »
Mark
Member
4 years 10 months ago

GM was intransigent when it sold Saab. I’m sure it would’ve preferred to shutter it. However the weight of public opinion and it’s own bankruptcy forced it to reconsider. Now it’s not bankrupt and probably cares little about some bad PR.

If Saab survives this, (and I’m still quite confident it will) I hope it can wean itself off GM just as quickly as is practicable.

DennisMcG
Member
4 years 10 months ago
I agree GM really wanted to close up SAAB and did a nice job dragging out the sale and not shipping any cars to the USA for 9 months – why? I think to kill of the SAAB dealers? GM management is focused on short-term profits and they seem unable to think long-term at all. I’m in Los Angeles and the sole SAAB only dealer here closed this past July and one other Caddy-SAAB dealer is now a Caddy-Buick place. Anyone who thinks GM management is more competent now that it is Government Motors needs to see the movie “Who… Read more »
Saabim
Member
4 years 10 months ago

1+

GreekSaabDriver
Member
4 years 10 months ago

Let’s be realistic, guys.

The issue is not Sweden, goodwill or making friends and influencing people, at least not those in the rather small Scandinavian market. The issue is China, its market potential, and the sales of SAIC, the current partner of GM. It could well be that the agreements GM has signed with SAIC ties its hands regarding current or recent platforms and technology.

zippy
Member
4 years 10 months ago

This most definitely is not going to end well. 🙁

klypp
Member
4 years 10 months ago

If the problem is SAIC, I can’t see it comes down to anything but the price for GM technology. Shouldn’t be hard to resolve.

ivo 71
Member
4 years 10 months ago
Be all that as it may. I have been thinking what to do if the unthinkable comes to pass. If Saab goes under because the markets don’t want Saabs then a GM product could be on my buy list. The 3-litre Opel Signum (can’t afford to buy a decent new car) is pretty high up there. But if Saab goes bust because GM decide to sink the rescue deal then they can be sure of one thing: I will never, ever buy anything GM again. I’ll just go down the BMW, Merc, Volvo, Lexus or whatever road. And I hope… Read more »
Mark
Member
4 years 10 months ago

+1

Here’s Swade’s old web page: http://iwontbuyfromgm.wordpress.com/

Perhaps it should be resurrected?

nichell
Guest
4 years 10 months ago

It appears that the GM managers do not care about people. People who bought their cars and expect parts. By scoffing at these people, like my son and daughter -in-law, GM is saying ‘go to hell’, we don’t care that you once came in and purchased our cars, we just want your bail-out money too. It’s all about money, not people.

ANA
Member
4 years 10 months ago

GM is a business not a charity – its responsibility is to its shareholders, not Saab employees. It is a sad fact that there is likely to be some collateral damage.

guy55
Member
4 years 10 months ago

hallo,
i by a saab convertible 9.3 griffin in april 2011,well, when saab go finish i by a bmw but mercedes is to ecxpensif……. I HOPE OF BETTER NEWS IT IS AL A LONG TIME ?I HAVE VERY HADDINK OF THaT SOAP!!!!!

bpsorrel
Member
4 years 10 months ago

I’d buy a Dacia before I’d buy anything from GM now, No way GM, you blew it.

saabdog
Member
4 years 10 months ago

I believe GM will do the right thing in the end, although kicking & screaming.

Saab_Lurker
Member
4 years 10 months ago

I think GM is just making these statements to getting a better seat at the negotiating table. They want the revenues from Saab and will help push through a deal with the Pang Da/Youngman.

kochje
Member
4 years 10 months ago

It would be so good if this is what they want to achieve; just hope that VM is in an even better seat at that table.

UWb
Member
4 years 10 months ago
Why spending all time on discussing the GM decision. The only thing that matters is if NDRC will give green light to the deal. If that happens, GM can be blamed if they do not change their decision. GM was “forced” to make this statement before NDRC made their decision. If NDRC would say “Yes” and GM later on said “No”, this would probably hurt their relations with NDRC. Now GM was first out saying “No” and pushing the pressure towards NDRC. GM will never say “Yes” before NDRC comes with their decision and uses the mean time to get… Read more »
900 classic cab
Guest
4 years 10 months ago

It makes sense to me. So why is the NDRC taking so long ?

kochje
Member
4 years 10 months ago

Good question.

ivo 71
Member
4 years 10 months ago

Maybe because there is no deal on the table right now? The 100% takeover is off, so is the old share distribution between Y, PD and Swan if Victor Muller is to be believed. There is no information about a new proposal. NDRC cannot really decide about a deal that isn’t there, can they?

Ivo

MariusGTV
Member
4 years 10 months ago

I don’t know if the ‘real’ truth about what has and is going on behind the doors of the deal makers will ever be known but to be honest, Saab is the only brand with any connection to GM that I would have anything to do with. Their other brands/product just don’t do it for me and never have.
If Saab go (I pray they do not) I will stick with Alfa.

Griffin Up! Cuore Sportivo!

Troels, Denmark
Member
4 years 10 months ago

I feel the exactly same way.

sa10
Member
4 years 10 months ago
GM invest a lot of money in the platform Buick-Saab-Opel And approving the deal Saab-China – gift for direct competitors. Chinese companies Youngman and Pang Da could reduce the cost of production and banish Buick-Opel from this market . I don’t like GM cars, but I think GM has the right to protect their workers from dismissal in the first place. And to kill a valuable resource (SAAB) is stupid and I think all sides need to just find a way to share the money. Or the Swedish Government should fund the rescue Saab, and not to beg GM for… Read more »
Saabim
Member
4 years 10 months ago

I agree with you. Swedish Government does do it.

Turbine
Member
4 years 10 months ago

I think that all the wheeling and dealing comes to a head tomorrow – GM will see what the Chinese govt think of it all shortly but will not jeopardise relations in china (massive market) – will saab legal restructure be maintained if the MOU with pang da/youngman expires tomorrow?? Things building to a head this week surely ??

saaburban
Member
4 years 10 months ago
Well, havnt we been here before. It’s dark winter, GM is closing down Saab. What happend a few years ago is replaying once again. GM refuses any bids from other large manufacturers and chinese companies. Selected Koenigsegg backs out because it’s impossible to get a deal done with GM on buying Saab. Saab is put into liquidation because GM refuses Victor Antonov to invest. Spyker buys Saab, only after Antonov is removed, and GM gets veto right on future investors, Saab is tied to contracts buying GM parts. Victor Muller can ar this point in time (2011) do two things;… Read more »
saaburban
Member
4 years 10 months ago

NDRC can save SAAB If they want to prove an example.
GM is a guest in China, so by spitting on the floor, GM might not be invited to do business any more. All it takes is phonecall, Why should NRDC support GM/ & SAIC if it in the long run looks like GM is using the Chinese but not sharing IP rights or access to global brands.

Carl Andersson
Member
4 years 10 months ago
I don’t understand GM either. I guess the shareholders would be rather P****d off becauso of following. Assume Saab produce and sell 100 000 cars world wide. An assumption is that GM get about SEK45000 per car, Drivetrains and “license money”. Out och those SEK45 000 25 000 is profit. THis gives a total of 2,5 billion SEK/Year. Lets say that GM makes SEK100 000 per sold GM car in revenue. That means that GM must loose 25 000 cars to Saab. In what parallell universe will that happend? (25 000 cars is 0,35% of the total GM number sold… Read more »
Troll96
Member
4 years 10 months ago
From what I can tell, none of Saab’s 2011 financial weakness was caused by GM. The factory shutdowns, regulatory foot-dragging, and on again/off again financial agreements have all originated in Europe and China. Yet suddenly it’s all GM’s fault if Saab fails. Really? Not Saab management who overestimated cash flow? Not the Swedish creditors who triggered the bankruptcy/reorganization process? Not the curiously disengaged Swedish government? Not the day-late-and-dollar-short Chinese partners holding out for a better deal? Not the NDRC which bars competing bids from interested Chinese companies? That doesn’t make sense. GM’s IP stake in Saab is small but strategically… Read more »
davidgmills
Member
4 years 10 months ago

Good job.

Keith
Member
4 years 10 months ago

Well said. Nice to see a rational comment on here.

davidgmills
Member
4 years 10 months ago
Count me in the minority here then. If Saab goes under, my next car will probably be a GM, probably that ugly XTS Cadillac. I have never liked Fords, I have never liked Chryslers (A Fiat? — forget that), and I have always thought the Germans were way overpriced and, except as a status symbol, not particularly suited to US motoring. I don’t want Japanese either. Never been a big Volvo fan either. I don’t blame GM for Saab’s troubles. Saab was in a bad way before GM bought them. GM probably should not have bought Saab to begin with… Read more »
74StingSaab
Member
4 years 10 months ago

No worries, the reason I bought my first Saab was the fact is was owned by GM. GM cars are good cars, my Blazer lasted us well over 100k miles nothing but minor issues. My 1988 Monte Carlo SS has 118k miles and is the MOST RELIABLE car in the driveway.

The funny thing is we replaced 2 chevys, for 2 Saabs in the last 7 months.

ivo 71
Member
4 years 10 months ago

The reason GM bought Saab 20 years ago was that Fiat was about to do that. Had that happened then GM wouldn’t have had the boutique European brand they craved at the time because other US majors had one. It’s what they did with Saab after that that counts. And that doesn’t really merit a ‘perfect management award’, now does it?

Ivo

davidgmills
Member
4 years 10 months ago

Fiat should have made a better offer, if that is what happened. Might have been the best thing for Saab to keep it European. Although Fiats are called Fiatscos for a reason. Maybe Fiat ownership of Saab would have been worse. We shall see how Fiat ownership of Chrysler goes.

Where is Fiat now? Why isn’t Fiat buying Saab now or why didn’t it buy Saab a couple of years ago. Maybe the answer is that Fiat never wanted Saab and was just making noises.

Mark
Member
4 years 10 months ago
Fiat did want Saab in 2009, but it was mostly to gain access to Saab’s US dealers through which it had an avenue to re-launch Alfa Romeo in the US. It might have been good for Fiat, but ultimately it would’ve been bad for Saab. Two decades earlier however, the story might have been completely different. Saab-Scania sold Saab to GM back then because GM was happy only to own 50% of Saab for the first ten years, with an option to buy the remainder after that. Fiat wanted 100% straight away. I think Saab did okay with 50% GM… Read more »
Mark
Member
4 years 10 months ago

BTW, it wouldn’t hurt Investor AB to become a part owner of Saab again. Perhaps then GM would be less recalcitrant?

ivo 71
Member
4 years 10 months ago
I doubt the Wallenbergs want to burn their fingers on an automotive adventure again. Had they wanted to, they could have bought Saab from GM in 2009 for -for them- two dimes and a nickel. Or supported CvK in his bid. But natural resources are so much more safe… Also, they already had decided to get rid of Saab 20 years ago when it was just oozing money. Presumably, they saw no long-term profitability in the brand. Why would they want to become owners again now that it is truly haemorrhaging money? For the honour of the Swedish flag or… Read more »
Tripod
Member
4 years 10 months ago

“Where is Fiat now? Why isn’t Fiat buying Saab now or why didn’t it buy Saab a couple of years ago. Maybe the answer is that Fiat never wanted Saab and was just making noises.”

Things do change over the years, as I think you know. But it seems like you don’t remember or knew anything about Saab back in the late 80s early 90s, and what happened then.

hilmar
Member
4 years 10 months ago

May be they want to turn down the 100% Chinese ownership. Perhaps they´ve learned that Saab could produce some money in future so GM wants to preserve their influence. Otherwise – they own the technology, why should they be interested in a survival of Saab. Most of the people – not us the chosen few 😉 – will buy their curious Buicks and Insignias instead. History will tell ….

Detlor2
Member
4 years 10 months ago
Hey folks, Big corporations make a hobby out of destroying the little guy. They have no accountability. It would be very interesting to see who Victor knows at GM. WIthout a sponsor, the original deal to purchase Saab would have never been made. They most likely made the deal because they maintained all the license rights and knew they could control Saab’s future with them! I love Saab’s and they have been a great part of our family for over 30 years, but it looks like the 4 current Saab’s maybe our last. I always thought there were restraint of… Read more »
3cyl
Member
4 years 10 months ago
A backup plan if the worst happens: If SAAB does close, instead of shunning GM buy the GM car of your choice and put SAAB badges and logos on it. In other word, make your own SAAB. I suggest GM because it has models that current SAABs are based on, but, anyone who absolutely can’t bring themselves to buy GM could apply this effort to any car – It just wouldn’t be as much a SAAB. A New SAAB Corporation would make more money selling badges and logos than the current company does selling cars. The New SAAB Corporation could… Read more »
100%Saab
Member
4 years 10 months ago

A little GM (US) history. The US government rescued GM from bankruptcy. The senior GM leadership got fired and are all gone. The new guys owe their jobs to the US government. What happens to GM matters to GM. Only Saab’s impact on GM matters to GM. Don’t expect any favors from GM.

Tripod
Member
4 years 10 months ago

As for the comments “I will never buy a GM product if…” well; for me there never was any “if”, a Saab with parts/tech from GM is as close to GM it will ever be. Buying something else from them isn’t on the map, and has never been. Thus it doesn’t matter what I say. But I guess they would get a little from guys like me that never would consider GM’s other products in the first place if Saab continues to use GM tech for some years.

JasonPowell
Member
4 years 10 months ago

See and that’s the part I don’t get, most people that buy a Saab would never buy a GM/Buick, so it’s a win win for GM to allow a deal as they will continue to make money from Saab until we no longer need them.

meccano
Member
4 years 10 months ago
GM has a deal with Swan. Now, Swan wants to completely change to terms and conditions of the deal. GM says no, that isn’t our deal. How does that translate to being GM’s fault? GM basically gave Saab away for free and lost billions of dollars on the deal. The cash Swan paid for the whole company didn’t even cover the cost GM paid for Saab’s wind tunnel. Through contractual obligations and preferred stock, GM had the forethought to control and protect its own IP regardless of what became of Swan. GM is a publicly traded company with a legal… Read more »
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