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Monday Again – Another Week of Negotiations

November 21, 2011 in Editorial, News

It’s a bit misleading that this post appears in the category “news”, it could well appear in “no news” as still we have nothing breaking to report. While this process of waiting is nerve wrecking for us it is also a good sign that all parties are focussed on getting a deal together. Indications we get from various sides also hint that things are moving, albeit slowly. The creditors meeting has been postponed so we don’t nessesarily expect big things to happen this week. We’d hope for it though, as for employees, dealers and the cash situation at Saab every day without a deal and production is a lost day.

Every now and then a short statement surfaces, but most likely because journos desperately look for news. Here is one like that, Huang Zhiqiang, vice president of Youngman underlined that they are serious about Saab when he spoke to Reuters:

Huang said that investing in Saab is a strategic decision for Youngman.
“It’s not a short sighted move. We got into the deal as a long-term investor,” he said.

Ah well, I think noone in this game is in for a quick buck as wou won’t get that from investing in Saab. This should also apply to the latest addition to the circle of interested parties: North Street Capital. Jeff posted an exclusive interview with their managing director Alex Mascioli last week. Comments on this post were pretty harsh, at least quite a few of them. It’s right that we don’t know too much about them and even the crew did not get an invitation to their money bin. But…

They are another entity to the game that is trying to build up a future to Saab. I think all of you remember CJ, who appeared in 2009 and attended the bidding process. He is still chiming in here from time to time. We had a critical but friendly approach to him even though we did not know much about him either. I’d like to ask for that, too, when it comes to NSC. It’s a bit naive to think that they come here, showing a detailled plan and how much they have in their accounts. If they are to show that, it’s to the parties in the negotiations and not to us. It would even be wrong to talk to much about an ongoing process. It’s not the time to leak details right now. And judging them from their homepage and the fact that you did nor hear of them before is a bit too easy.

It’s ok for me to have a critical approach to such things, we’ve heared about a lot of people in the past two years that did not meet our expectations, I’d even advocate to have it. I just ask you to hold your horses a bit. Maybe think (twice) before you write a comment to keep up to a certain level of behaviour we all want to see here at SU.

And no, comments on this post are not the place to go NSC bashing again.

57 responses to Monday Again – Another Week of Negotiations

  1. Thanks for a good write about the status p.t.

  2. Thanks for keeping us informed. It is much appreciated.

  3. +1

    Thanks for your statement, till72. I think it is fair to demand that in one’s criticism of SAAB’s options, one should always bear in mind whether or not oneself has a better alternative to offer. And closing down is NOT a better alternative.

    So let’s hope things will sort out for SAAB. I do believe that there can and will be a win-win-win(-win?) situation for all sides.

  4. Thanks for this good and objective overview, till72.
    As long as parties are on speaking terms; let them continue.
    Just need to wait for the white smoke that once should be produced.

  5. White smoke? Do you suppose that maybe negotiations are taking a long time because they’re communicating via “smoke signals” like The North American Indians did? This gal over here wants to get back to work.

  6. White smoke is mostly released when negotiations did result in a successful conclusion and do not have anything to do with the communication itself

  7. Trying to stay positive, but every day that goes by in this uncertainty is extremely damaging for SAAB. Is good that negotiations are still ongoing, the only problem is what this negotiations are about. I sometimes had a feeling while reading the news last week that diferent signals are coming from SAAB and Chinese. TTela.se reported on several ocasions citing Eric Geers and other sources at SAAB that negotiations are going on to find a new ownership structure that GM could agree upon. At the same time this seems to be unlikely since the Chinese are still pushing towards the 100% buyout sending GM additional package of explanatory information in hopes that this will comfort GM with the proposed deal.
    If we are to believe this , it looks like there are still two negotiations camps not necessarily talking or listening to each other.

    One encouraging aspect is that GL agreed to postpone the creditors meetings of 22nd. The question I ask myself is on which camp GL is right now ? (and I think this is crucial to the future of the negotiations and the future of SAAB).

    The most convenient for SAAB and at the same time most probable explanation of what has been going on is that Guy Lofalk came in with his own plan for SAAB which was not the same as the one on which the reconstruction has been granted.
    I think he concentrated only on the SAAB Swedish entity operations but he neglected the bigger picture with SWAN and GM agreements, and GM still being the major stakeholder in SAAB.
    VM could have warned him about the problems and the imminent refusal of GM, the fact the GL didn’t take it into account I tend to explain it by the fact that the relationship between the two of them were extremely tensed at the time and they were probably not listening / trusting each other very much.

    So here we are now, GM made a final statement in which they disagree on the 100% Chinese ownership , negotiations are still ongoing and all parties declare they are extremely interested, but we are still talking about the same deal two weeks after GM refusal. I think it will not surprise anyone if GM will have no comment or simply state their position hasn’t changed.

    So If GL or China are not willing to go back and renegotiate the ownership structure, than SAAB has to react sooner rather than later as this time I think there isn’t really any time to gain or to loose for anybody.

    • Just imagine if the production had not stopped in May. From what I understood they sold almost 5000 (?) vehicles per month at the time when production stopped (5.000×12=60.000) and had the 9-5SC and 9-4x ready for launch. Those could have added at least 2-3000 cars per month when sales and production ramped up in the autumn. It was not unrealistic that they reached a rate of 8.000 cars per month (96.000 per year) at the end of they year. Instead they are now worse of than when they started production again after the GM sale. All they would have needed to keep production going was about 100 MEUR, now they spent much more than that on nothing else than keeping the company alive while the company has withered away (key staff leaving, resellers leaving, brand image hurt etc.). My question is, did Victor Muller put his head in the sand when he was warned about the financial problems early this year? What kept him from striking a deal with the chinese when the company was healthy and still producing?

      • I agree with that, Victor Muller is a brilliant man of ideeas and negotiator but he is far from being a seasoned CEO of a carmaker of the size of SAAB. He doesn’t have the skills or experience of running day to day operations in SAAB , but he had to take over this position from JAJ. Should they managed to hire an experienced CEO from the car industry in time, probably they won’t be in this position now.

      • Victor has said they started chasing Chinese partners in October 2010.

        I take that as a sign they were doing some right things before the liquidity crisis set in.

        • Whoever was responsible for the initial liquidity debacle, in the end it is a clear joint responsibility of the CFO, the CEO and the chairman. Who gave when the wrong forecast or who made the wrong final decision about liquidity needs, is very difficult to judge from outside. The final responsibility is with the chairman, no way to escape that conclusion.
          But forget it to talk up VM. He has other qualities, but he is the most lousy CEO or chairman of a big industrial company you can think off. In the best case, if the ongoing talks should end with Saab’s survival, what I don’t dare to believe any more, a full year standstill of production with full employment/full salaries paid, despite a good product pipeline (Griffin 9-3, 9-5 sedan + 9-5sc, 9-4x). A plein disaster, nothing else. Complete disaster in communication and actions taken since, one mistake after the other. VM saved the company from shutdown in early 2010. If he achieves a final sustainable long term solution it is great and deserves our highest respect. The rest we forget, it is just bitter and depressing.

          • Responsibility is one thing, situation awareness, as discussed here, is slightly different.

            AFAIK, the only known “data point” is that Victor told the press that they started chasing Chinese partners October 2010. It does not necessarily mean Saab’s management were aware of a liquidity shortage, but it does point in that direction.

            VM had been the CEO for two-three weeks before the production stopped. He tried to get in more money through Antonov, but his efforts were effectively thwarted by swegov..

            But you knew this already, no?

  8. That thread about north street capital generated more responses than any other in recent days, and given the available facts, its hardly surprising that there is an element of skepticism , and intrigue.

    As one who’s 3 comments on that tread are now “awaiting moderation” (or deleted) I have to say I’m disappointed that SU chose to pull over 75 comments, and leave just two, non questioning type ones.

    While primarily being a Saab supporter site, you guys are also fortunate enough to be absolute front and center of one of the biggest story’s in the auto world at the moment. Not only have you got the central company fighting for it’s life, we have….. Russian bankers who have their banks nationalized. Check. Chinese car companies signing endless MOU’s and then going the speed of a snail. Check. Various other sometimes mysterious financiers who come ( and go) Check.

    You couldn’t write a novel or a movie script more interesting than this one!

    Please keep up the good work on the news front, and please allow a little skepticism and dissent in the comments. As long as it’s not malicious, its healthy.

    Thanks

    Scand.

    • I did not follow that particular discussion, but have now sifted through some of those comments that are presently marked as “pending”.

      An entire discussion thread devoted to how a website belonging to a PE fund should appear is not really that interesting IMO. The appearance of a website does not really say anything, one way or another. All it indicates is how much of a company’s business take place over the Internet.

      Skepticism is all fine and dandy, but we have had a couple of nay-sayers who are dead set on leaving very negative comments about Saab, Victor Muller and/or anyone related to Saab. Meanwhile, not one of these armchair quarterbacks bother coming up with ideas of their own. Or they present ideas that just won’t work. (interesting time back when Victor first claimed GM would not look kindly on 100% Chinese ownership — he caught considerable flak back then, and he caught even more flak when it turns out he was right…)

      Basically this comes down to one thing: Information. Back in the GM days we craved more information, but we barely knew the people who were running the show. Now Saab have an owner that is very forthcoming with information, but there is an outrage whenever it turns out he weren’t able to accurately predict the future (or outline every possible little detail that could go wrong).

      In the end it is just easier to freeze entire discussions before they get out of hand. (Or maybe that thread was accidentally put on hold — I just don’t know)

      • I guess you really didn’t follow that, Rune.

        Major part of that disscusion was about the content of the website, not appearance. I didn’t see one single negative comment about SAAB there, and we were questioning the credential of potential SAAB investors, from SAAB fans’ stance.

        SAAB is not equal to VM. And SU should be a more neutral place allows for polarized opinions.

        Jason, what you wrote was not only in bad taste but embarassing for us at this website. You don’t invite guests to your house and let people spit in their face. We were hoping our readers had the good sense not to do that. You didn’t. It’s just basic decorum. As a new member to SU, please try to be more constructive. -Jeff

        • In this specific case, I believe that content and appearance of the NSC website are one and the same thing. And I support the SU decision to neutralize the thread since a discussion about something we don’t know anything tangible about is, in my modest opinion, useless and may well prove counterproductive in the longer term.

          Ivo

          • I’m fine with that too.

            I’ve notice it since yesterday and didn’t even respond before Rune left a word here.

            That post mentioned they were expert in handling undervalued assets, which could not be proved by any of us. It’s not tangible either.

            Hm…I’m getting too far again. Won’t talk about them anymore.

          • ok, I thought GM wanted government fund at the end of 2008, and Obama turned it down. They suggested GM went for Chapter 11. And the restructuring plan was to create a new GM with profitable assets, which didn’t include SAAB. So they had to sell or close it, am I right?

          • I just noticed that the whole thread seems to have disappeared. If that’s the case then I strongly object against it. Of course I understand that SU is not a democracy and that the moderators can do what ever they like, but I think that just pulling a thread because you don’t like the comments is kind of disrespectful towards the people that tried to make reasonable comments.
            I’ve enjoyed being part of the SU community since 2007. Not all comments are always as respectful as they should be, but you quickly figure out who the a$$holes are and just ignore their comments.
            Pulling a thread (rather than closing it for comments) reeks of censorship and, imho, should always be avoided even if some vitriol stays out there for everyone to read.
            I’m very grateful for the SU team giving us all this information and a place to share our thoughts. I appreciate all the effort that Jeff puts in trying to get information straight from the horses mouth, unfortunately there wasn’t much more content there which raised all the criticism. But its my honest opinion that removing the whole thread is a mistake.

          • GerritN: Believe me, we share your frustrations. And being a loyal follower of SU, I am sure you realize that forum moderation is by no means an exact science. Trying to reduce the amount of disruptive behavior in the comments is a time-consuming endeavour and very much hit-or-miss. And let me assure you that the “miss” events are the result of our limited resources (namely: time) as opposed to executing some hidden agenda/censorship. Obviously it’s faster just to nuke an entire thread whenever things get unruly, which is not to say that we don’t try our best to perform surgical removal of vile commentary. Please Keep in mind, that time spent moderating takes resources away from news-seeking and quality writing. Hence, we must continue to ask that everyone who is about to post a comment to carefully consider if they are truly adding valuable insight to a discussion before clicking “submit”. The vast majority of you do this already, but those who don’t are forcing us to make some tough calls, in what little time we have.

        • Just one point that seems to slip out of most peoples mind at the moent:

          VM is equal to SAAB at the moment.
          He is the owner and potential seller, with the agreements that earlier on made GM sell to him.
          You can dislike him , critizise him, question his abilities etc,. but he is still the one with the keys to the gate

          • I’m sorry to see how quickly you can forget the way you treat GM back in 2009-2010.

          • Que?

            They made it impossible for Koenigsegg to go through with the buy.
            They denied the sale until VM came up, denied the sale as long as VA was in and finally sold after starting “Orderly Wind Down”

            Who treated whom how?

          • GM was the owner, it was equal to SAAB, the one with keys to the gate.

          • With a difference.
            GM’s plan was “Wind down”
            VM ‘s most definitely not

            Makes a difference in my perception

          • GM planed to close SAAB because it needed to sized down to get government backing. Remember GM itself was in reorganization as well.

            I don’t see the difference in SWAN’s case here.

          • JH22, you clearly are not familiar with the story of what transpired in 2009.

            I suggest you ask questions rather than make statements such as the one above.

          • What is wrong?

          • Please give us your perception of what went on,..Then we can start from there

          • ok, I thought GM wanted government fund at the end of 2008, and Obama turned it down. They suggested GM went for Chapter 11. And the restructuring plan was to create a new GM with profitable assets, which didn’t include SAAB. So they had to sell or close it, am I right?

          • Correct.
            The GM paranoia regarding IP made them choose “Wind Down” as the paranoia regarding IP left others out.
            They choose Koenigsegg, and after making it impossible for Koenigsegg to go through due to delays, they choose Spyker after pressuring VA out of the deal.
            This is the same GM paranoia that stands in the way of a deal now.

          • They eventually sold SAAB.

            And GM has every right to protect its IP. If it happened to you, I bet you would do the same, Khrisdk.

            I don’t want to comment on VA. All I want to say is SAAB needs a owner whoever has the ability and creditability to navigate it out of all these. You don’t want to see such drama in another 2 years, do you? I honor VM for saving SAAB back in 2010, but it turns out he cannot run this company, do you agree?

            If you guys can blame GM for the turmoil during the sale of SAAB 2 years ago, can I express my dissenting over VM as well?

        • “was about the content of the website, not appearance.”

          Makes absolutely zero, nada, null difference to me.

          You have found a loose thread which you choose to base a full-scale flame war on. Your action fails to impress me.

          • Impress you was not my intention, neither a war. I thought you didn’t follow it.

            It makes no difference because there is no content.

          • JH22

            Can you please expose once and for all your opinion so we can understand what are you trying to tell us?
            Because I sometimes feel I’m loosing the logical stream in your posts and have the impression you only want to have the last word in any conversation.

          • Er…I guess it is because there is no exact time like hh:mm:ss indicated after each post.

            I was actually replying their comments, I don’t know how to fix this.

          • Placing the timestamp next to the comments should be relatively easy to do for TimR and SU crew.
            But you know it’s not what I was refering to.
            What I was refering to is that you feel the need to respond to every comment in a thread and I noticed your opinions change depending on the comment you are responding to (go through your comments re GM just above), so I conclude that you’re simply trying to contradict everyone here so that the threads become both unreadable and ununderstandable.
            If you have a valid opinion on the situation , the present and past players around SAAB, please feel free to expose it in an understandable way.
            We are trying to build a positive attitude at this site and try to understand as much as possible on what’s going on given the limitted amount of information available.
            Please respect that.

          • All my comments re GM follows Khrisdk’s initial reply to my statement “VM is not equal to SAAB”. If you read through it you will know I was using Khrisdk’s logic as a respond to his word.

            I’m not trying to contradict anyone, just different opinions. I’m not the one started the hostility. My apologize for making you confused.

        • JH22:

          Sorry, but when you’re purposely mixing up the intentions of owners GM(in 2009) and SWAN, doing this in a Saab enthusiast community, I guess you’re going overboard to the extent that it most of all seems a one-man-war against the rest of the world. Which can be labelled as hosts of things, but principally, it is worthless…

          • That’s really not my intention. And I’m a Saab fan as you are.

            My statement was based on the fact, may be not that detailed. I’ve no emotional tie to SWAN, VM or any other parties of the negotiation, it is the car I love.

            I just wanted to bring this as objective as I can. Sorry if my comments bother you.

        • Isn’t there a chat room for all of this back and forth about hurt feelings?

      • @rune. I just went back and reread the post. Frankly, it almost reads like a press release from NSC. The company (or man) was and still is a mystery , but he’s managed to successfully convey the impression that he is some sort of benevolent hugely deep pocketed financier “ready to help out in any way possible”

        Maybe I’m just a bit more jaded on the notion of benevolent capitalism than others, but it sure does beg the questions, such as…’ok, and who are you, exactly’. … And ‘how are you proposing to do it’

        If he is unwilling to open up a bit, and wishes to remain in the background, thats fine, but why , then, agree to an “interview” in the first place? If I was a banker working on this deal, I would be saying nothing to anyone, until it’s done.

        • I thought NSC was representing several investors, not only a single person.

          The guy is said to own a Saab and may very well be a bit over-enthusiastic.

          In the present situation, is this really what concerns you the most? In that case, I must say the obvious diversion tactic is working like a charm.

          • I say NSC’s money is as green as the next guy…at least it seems their motive and direction they want for Saab is good…..I was rather bummed out when they backed out a few weeks ago.

            As for Saab in the Boca area of Florida, a plethora of sightings in one day….Murphy’s Law, spotted a 9-5 Aero Glacier Silver and the phone was dead :( …..my sisters think I’m crazy :)

  9. From just-auto.com – they are clearly speaking about a new proposal to GM and about a new ownership structure that would fit GM, this is more in line with what SAAB seemed to report last week :

    Quote:

    Saab also says it has sent a new proposal to GM in a bid to convince the US automaker to continue with existing technology licences and the supply of 9-4X crossover vehicles.
    GM declined to give its approval for Saab plans to be taken over 100% by Chinese companies Youngman and Pang Da.

    “There is communication of course between us, the Chinese and GM,” a Saab spokesman told just-auto. “A proposal has been sent – it is a new proposal. “We have to find…a structure that would fit everybody.”

    Saab also has to pay its nearly 4,000-strong workforce next week following the ending of the Swedish government’s obligation to pay salaries.

    “We know what our financial commitments are,” said the Saab spokesman.
    “We have to follow this because we are in reorganisation, so we have to follow the frame of the law – that is also the task of the administrator.”

    A provisional memorandum of understanding with Youngman and Pang Da expired last week, although Saab said this could be extended.

    It is not yet known when GM will reply to Saab’s latest proposal.

    End Quote

  10. IN A NUTSHELL THEN – we have until salaries are due next week- if no deal on the table (and at present there isnt one) its fair to say that the unions could force Saab out of restructure to protect its members legal interests. Add to this the large list of creditors and you can see the position as it currently stands…difficult to say the least. Cash and a plan needed within days….

    • The Unions have 3 weeks to react, I’m not saying it will take 3 weeks but it will not be instant reaction either I guess. Than SAAB has 1 week to respond and here we ga again… They shouldn’t go through that all over again. There should be pretty clear by now if the chinese envisage to change the ownership structure , otherwise SAAB should take actions in other directions.

  11. Saabsunited,

    Please make the “let saab go” push to overwhelm GM’s media page on the top, or stay on the side somehwere. The amount of “LET SAAB GO” posts have gone down on GM’s page lately… help us keep the pressure!

    http://www.facebook.com/#!/generalmotors

  12. This post title will be good also for political situation in belgium ;)

  13. So what does the back of the new Kia GT concept remind me off?
    http://www4.rcf.bnl.gov/~nieuwhzs/wheeels-kiagt-blog480.jpg

    • GerritN …wow well at least the phoenix SAAB concept might make it to production…I stopped a Large South Florida SAAB dealer that would stock 40 – 50 new SAABs…gone is the Large SAAB outside the bldging…worse when I inquired about my 2011 SAABs 9-5 warrenty they shrugged their shoulders…ouch…so lets hope someone with a lot of Capital still takes SAAB over…I would like TATA with Landrover and Jaguar SAAB would fit just under those car lines..compliment TATA’s Internal Line very well. As for IP technology concerns Jaguar and LandRover already have this in house

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