GM on the licenses

DI.se runs an article where a lot of people give their view on what would happen to the licenses Saab has obtained from GM. There are quite different views but GM has a pretty strong opinion about that. And I’d imagine they know best what the contracts look like.

“The situation is very clear: Saab is currently being restructured. Either they continue rebuilding or they go bankrupt. If the company goes bankrupt, technology licenses may not be sold because they are our property” , said GM spokesman James Cain.

I’d say this puts a bit of pressure on Pang Da and Youngman to get a deal done and not to speculate on a bankrupcy.

JasonPowell
Member
4 years 10 months ago

Kind of how I see it too. I think the ball has been tossed back their way now and they need to make the next move.

Greg Abbott
Member
4 years 10 months ago

It’s not as if people didn’t know this months and months ago. Back to the original deal, perhaps with an option for YPD to buy 100 percent after Saab has weaned itself off of the GM IP.

tianalfred
Member
4 years 10 months ago

I think there is no possibility for chinese NDRC to approve a deal that is without technology licences. Because under that circumstances, chinese PDYM will get nothing but a brand logo and also an empty shell with much debts.

Tripod
Member
4 years 10 months ago

Perhaps. But they would also get quite a lot of “know how”, wouldn’t they?
(Skill and knowledge among the employees.)

quickbird
Member
4 years 10 months ago

Yes, the employees are the most valuable assets. However, no auto maker can survive without building cars. Without GM licenses, Saab cannot build even one car…

liftarn
Member
4 years 10 months ago

Not in the short term anyway. The PhoeniX platform is owned by Saab, but it uses GM and BMW parts so if they have to be replaced it would take some redesigning.

74StingSaab
Member
4 years 10 months ago

I said it before and I’ll say it once more, I feel for the Saab employees….

paddan
Member
4 years 10 months ago

I feel for the employees, dealers and loyal owners who cant get parts now.

74StingSaab
Member
4 years 10 months ago

Yep… I guess I may be one of those very soon with 3 9-3’s in the stable.

Osama Dajani
Member
4 years 10 months ago
Almost one year ago, SAAB owners all over the world arranged for convoys to “SAVE SAAB”, a car or a brand which they have loved for decades. Unfortunately, the SAAB, or the car that people have loved is not a SAAB. It’s apparent that SAAB is a GM car but assembled at SAAB’s car factory in Trolhatten. I feel for SAAB and its supply chain’s employees. In my point of view, there is no problem with lay off of employees as there is hopefully, a short period of inconvenience to them. Employees will have to update their CV’s and search… Read more »
quickbird
Member
4 years 10 months ago

I just feel Saab cannot survive this time…

Kimberly
Member
4 years 10 months ago

I think you’re right, but I hope you’re wrong.

900_S
Member
4 years 10 months ago
Just this is in response to both kimvette & quickbird: I don’t see what’s so hard about waiting 😉 To the general SU public: It seems like a roller coaster, reading through the comments at times. Some people seem severely fatalistic, while others are maintain their intense optimism. I mean, it’s nice that people are able to express themselves–both through positive and negative comments–so I don’t fault anyone for doing that. Though they sometimes seem like (to ME) when you watch a new movie with a friend who constantly remarks about the possible outcome of certain scenes or the ending… Read more »
Grumpy
Member
4 years 10 months ago

Good one!

nichell
Guest
4 years 10 months ago

Government Motors(gm) doesn’t care about people. Are they concerned about the people who walked into their dealership and bought their products and now can’t get parts? No. When is Government Motors going to start caring and stop demanding money from taxpayers.

JogNien
Member
4 years 10 months ago

I believe this is just a negotiation process.

Jeff
Member
4 years 10 months ago
The Chinese know what GM will accept now. It’s up to the Chinese to find a way to make it work. GM holds the cards here, not the Chinese. The only wildcard I can see that would put pressure on GM would be the NDRC, but I’m not sure how important the potential of Saab’s future is to the money they’re raking in off the back of SAIC and FAW. In that respect, whatever is in GM’s best interest seems to be in the NDRC’s. They have quite the cozy relationship already. In other words, whatever is in the best… Read more »
Bravada from GMI
Member
4 years 10 months ago

I believe the only option for Saab to continue is for the Chinese to back out and another investor to step in. If GM was any wiser than they were before, they’d be that investor.

JH
Member
4 years 10 months ago

So you mean that General Motors should buy back Saab? That would be… interesting.

900 classic cab
Guest
4 years 10 months ago

Well, at least they aren’t waiting until the next minute to say no (unlike EIB) and they are giving some time in order to get things going.

Carmania
Member
4 years 10 months ago
According to DI.se http://di.se/Artiklar/2011/11/9/250581/Saab-Oklarhet-kring-tekniklicenserna-vid-konkurs/ it is not clear if GM can stop a buyer from getting the licenses if SAAB is in bankruptcy. If the bankruptcy trustee sell the complete company the Swedish law forbids contracts where right-owners such as GM can stipulate conditions about the which buyers are allowed. This is to secure the value in the bankruptcy for the creditors. This make sense since otherwise this type of conditions could make all companies worthless if they go inte bankruptcy. GM risk that the only way to keep their technology is to make the highest bid for the SAAB… Read more »
TurboLover
Member
4 years 10 months ago

I believe GM has already fixed this issue in the contracts with Swan. Otherwise I would be very surpriced

Grumpy
Member
4 years 10 months ago
A very interesting point in case, but I assume that GM already worked with the possibility of bankruptcy at Saab when they sold it. It even seems to be part of the plan to avoid cost for closing. In any case we probably don’t need to look at Swedish law for how this will be handled but look at the US system. Surely it favors GM anywhere in the world. Especially if we are talking about Intellectual Property. Nah, Swan, Pang Da and Youngman needs to find a solution directly with GM and really fast. They can’t sit on their… Read more »
Tripod
Member
4 years 10 months ago

Eh, the blog post has the same link; and even if Till didn’t mention every view on this, it’s there. 😉

(What Mr Åbjörnsson says, about the licenses, to DI, he told SR (Swedish national public radio) a day earlier. I wouldn’t, as you, say that the “Swedish law forbids” this; as Till said in the post there are different views on this. But who knows, they haven’t seen the contracts, there are few cases, if any, to compare with etc.)

http://sverigesradio.se/sida/artikel.aspx?programid=83&artikel=4788062

Carmania
Member
4 years 10 months ago

Sorry, but the interesting point was that it’s not clear that GM is “safe”. Re. “Grumpy”, US laws can of course not override Swedish (and European) law in Sweden.

saaburban
Member
4 years 10 months ago

Some sporadic ideas…..
– Saab should spin off its Sonett brand and base it on youngmans lotus platforms & spykers to build à sub-brand / incarnation or evolution of Saab.
– Saab should invite GM to be partner again so that what’s good for Saab is good for GM.
– Saab should merge with Volvo & use their IP rights to make new models, maybe Volvo making premium cars ala Audi, n Saab making cars such as skoda / vw to beat porche saabs sonett / spyker brand would stand on top.

ivo 71
Member
4 years 10 months ago
Mr. Cain oversimplifies GM’s position in this case. He says that Saab either survives the reconstrucion or goes bust and that GM just sit back and wait for the outcome to decide how they are going to react. In reality, GM don’t just lean back and wait. They directly influence the outcome of the reconstruction by unequivocally stating their intention to render the most promising (the only viable?) outcome, 100% ownership by YPD, impossible by withdrawing IP licences and halting the supply of certain key elements of Saab cars and the assembly and deliveries of the 9-4X. It is understandable… Read more »
scand
Member
4 years 10 months ago

GM doesn’t have much to lose at this stage; they have already written off the value of their preferential shares, and it’s not like they are involved on a day to day basis, or would have to deal with a wind down process.

Sadly, I suspect they will be far more rigid in their position than they were two years ago.

ivo 71
Member
4 years 10 months ago

On the other hand, 326 M USD is not nothing, even to GM (which is still technically bankrupt and government/people-owned) and a few hundred million or a billion USD in extra revenues (IP, parts, 9-4X) is no pittance either. GM made a profit of 1.7 billion over the last quarter (or maybe the first) of the current year. While it is a lot of money, the amounts I mentioned are not insignificant in proportion with the overall profit. And they have no extra expenses harking that money in.

Ivo

skwdenyer
Member
4 years 10 months ago

In fairness, they do have extra costs; the variable ones. You’re right that Saab’s volumes are low enough to have effectively no impact upon fixed costs – the GM factories and supply chain are all in place for other, much larger targets. But the variable costs – materials, labour, handling, accounting, finance, credit control, warranties, etc. – are there.

It still makes Saab’s business worth having, but it isn’t all pure profit.

ivo 71
Member
4 years 10 months ago

You are correct, of course. I should have written that they have no or hardly any need for extra investments with everything already in place. And, if Saab stuff is identical to stuff in Buicks, Chevys etc. then even the overheads are -kind of- negligible. And they are most certainly more than included included in the calculations of the prices Saab pays.

Ivo

michaelb
Member
4 years 10 months ago
I am not a GM expert, but just a few thoughts: – absolutely unforgiveable for both VM and YPD, not to have explored GM’s position in detail in advance, already after the first MoU with YPD was signed. – Youngman pays a high price for their crooked behavior, to cancel a written MoU and gamble Saab into serious difficulties. As GM I would not trust them as well. Written committments apparently do not bother them at all. I would care as well about IP in China. – For my understanding, GM should have a vital interest for Saab to stay… Read more »
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