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Decision Week – Extended

December 8, 2011 in Editorial

It’s more or less quiet on the news front today. Time to take a breath and reflect a bit. Yesterday we featured the article from Automotive News China that stated that Saab is trying to get a loan of 600 million Euros from Youngman and that unnamed Chinese bank. It caused a lot of discussion in comments and views were quite contrary.

No matter how you look at it, the core in this idea of taking a convertible loan or/and issuing preferred convertible shares is trying to find a way to avoid the need for GM’s approval. I still think the plan itself could work out even though you stumble into the next questions about how GM would react and what NDRC would think of this. GM is pretty stubborn when it comes to protect their interests. They are neutral in an evil way, they don’t actively kill Saab but they don’t offer help either. In the end, you can’t even blame them because in today’s business world everybody is looking for his own favor. NDRC may let this go through if you can sell it to them as a long term investment, which it surely is. Even more, this would secure the investment already made.

So, what’s left now for Victor and Youngman is to find a way to get things done without the need for approval. Using preferred shares is not the only tool here, ownership change below 19,9 % should also be an option. Maybe even a combination of both. I’d even imagine that GM would be fine with such a scenario as their major demands would be met. Even if not, they had to fulfill their contracts with Saab as they are. But still, it would not be wise to burn all bridges to GM as there may be three or so years until the companies are fully divorced.

When I look at the interview Guy Lofalk did with di.se, he states that GM was not open for negotiations and did not say what they requested to let a deal go through. Well, GM said this before, total ownership change below 20 %. The reason that every proposal had a higher change is pretty clear – those who inject huge amounts of money want to get a certain share in the company. So they had to give it a try and hope for GM to ease its mind. Having a pure strategic investor on board taking over a certain share and keeping Youngman under the 20 % barrier could have worked. Noone wants to go into such a process on his minimum demands.

Lofalk blames GM for blocking all proposals and Youngman for not injecting the cash they promised. This statement lacks perspective. I already talked about GM, so let’s get to Youngman. They promised to put in money based on a MOU that is void by now and no additional has been signed up to now. Even if they wanted, I highly doubt that they can just put in the money without any agreement. On the other hand they are still at the table working hard on a solution. They seem to be very dedicated to this, unlike Pang Da who stated this week that they are still in but the fact that they are not in the latest proposals speaks for itself I think.

What I really miss in the interview is that he reflects on his role in this process. Given that he had to know about the ownership change clause in the contracts I still feel that supporting the 100 % takeover attempts by Geely and Youngman/Pang Da wa pretty foolish. He surely has no other choice than to end reconstruction in the current situation. This is not his fault. He has messed up things before. Not that he is responsible for the situation of Saab as it was when he took over. But as I see it he was not helpful either.

Meanwhile, as work goes on in Stockholm and elsewhere, all we can do is keep calm and carry on. It is very tough for Saab, but it is not over yet. I know that all involved will explore every possible option to pull this through. There is so much at stake, for Saab and also on a personal level for the involved parties, that everybody’s motivation can’t be any higher.

111 responses to Decision Week – Extended

  1. 600 mio is never enough as the total cumulated loss until today is about 760 mio !

    • Depends on how fast the suppliers and other wants their money, and what agreements are made.

      How do you calculate the 760 Mio?

    • well, then let’s make it 760 mio loan , if you say so.
      any other ideeas?
      Serriously, they presented this in front of the creditors meeting and perhaps they thought a bit on how this money should be used.

    • Thanks for the wise numbers but could you please name the source to it so that we can rest arrured it stands the proof of reality?

    • fuzzi,
      You are not talking about “clear and due debts” (i.e. to suppliers and some other), but something else.

      You are probably talking about all the current liabilities, apart from the long-term liabilities (2.6 billion SEK), mentioned in the balance sheet for June 2011, presented when they applied for voluntary reconstruction.

      Yes, they were said to be around 6.9 billion SEK, around 760 MEUR. Around 2.3 to suppliers etc. (accounts payable); 1.7 to “group companies”, and then some 550 MSEK, i.e. 0.55, “advance payments from customers”, (that ought to be for cars). That’s 4.55 billion SEK.

      Then there is another quite large entry, some 1.9 billion SEK in “accrued expenses and prepaid income”, could be several things I guess, I’m not an accountant, not good in the English terms in this field; its nature is periodic expenses, I think, it could be future interest, or wages & taxes; they will have to put them in the sheet. That’s in total 6.45 or over 90% of the “current liabilities”.

      That is something else, I think, than “clear and due debts”, which has often been mentioned in discussions; a smaller part as mentioned above. True, if I understand everything, current liabilities is supposed to be paid within a year.

  2. GM is neither benevolent or malevolent. It just plain doesn’t care. It narrowly escaped the grim reaper itself recently. I don’t think it will be so lucky next time. One thing for sure, few in the Saab fraternity will shed any tears when that happens.

    • I tend to slightly disagree Markac. After all the hardship Saab had to put through because of GM and after all the proposals that GM decliend, I actually do believe Mr. Lofalk when he says GM would not accept any deal at all. By now I am preety much convinced they intentionally want to destroy Saab. In my opinion this is not just about GM’s current IP, it’s also about Phoenix and even more importantly about everything else that Saab engineers might develop for Youngman or any other Chinese or other car manufacturer that should inherit Saab through any institutional owner in the future.

      For GM this is pure business and I respect their decision and attitude, because it makes sense to them. But they must know that it will not go well with many Saabisti. This is what they get from me – it’s a promise:

      1. I will never ever buy any of their cars,
      2. I will make sure noone in my family ever buys any of their cars,
      3. I will advise my friends not to buy any GM car.

      • I would rather walk every day for the rest of my life than buying an American car; they are pretty much inferior to most things out there (maybe were good during the first half of the last century, but since then not much has happened), and if not in tech, then definitely in design, IMO.

        And this fine company, GM, seems to think, for some reason, that their soon to be old IP is of such a great value that they can’t let it live for 2-3 years in the hands of another company, or minority owner, via licenses. They must have very high thoughts about themselves. And if not the IP; surely they can’t be afraid of competition? The largest vs. the smallest, that’s absurd.

        GM components in a Saab, that is as close as it ever will be.

        Those guys at GM should realise that with Saab they would gain some little extra money via licences for some time; even if it’s only pocket money to the executives, it comes as a plus, in addition to what they get from their own products. Even the bean counters should understand that. But since they don’t care about that, they must be afraid, they must be. Cowards, that’s what they are in my mind. It may be pure business; but as you said SpinM, it will not go well with many Saabisti, and it doesn’t.

        They know that their inferior products would have been nothing if it hadn’t been for the resources in Sweden and Germany; and that comes as no surprise as I mentioned initially, for the last 50 years or so, Europe has been leading in engineering of the combustion engines, fuel injection, you name it. But this is ridiculous; as mentioned, it’s the largest group vs. one of the smallest volume manufacturers.

        • I would rather walk every day for the rest of my life than buying an American car; they are pretty much inferior to most things out there
          It is easy to blame GM and have a bad opinion about American cars. However, I drive an American car. It is called a Saab. It shares common parts and design with some American cars. It is better, in several ways, than my previous Saabs. (OK, I hate the peeling rubber in the dash).

          When one buys a Honda made in the UK or US, they still think of it as a Japanese car. That is why I think of my car as partly an American car. When I bought it, Saab was owned by an American company.

          • derek,
            there is a slightly difference between a Saab and a UK build Honda.

            Saab is build and developed in Sweden or at least Europe, the Honda is developed in Japan but build in Europe.

          • I thought a bit about the wording before posting; I didn’t, and I don’t, want to hurt the feelings of American Saab enthusiasts, or car enthusiasts in general, or even Americans in general. :) It was a bit harsh, yes. But that’s how I feel about their cars; they leave me cold. I haven’t complained about or belittled other brands before and there’s no need to as long as one’s favourite brand is around, unless one is a very odd personality. But now, during the last months, we have seen people jibing at Saab, here in Sweden. And now this, they have hurt something that I and everyone else around here care for. Well; if the next plan doesn’t fly because of them, then gloves are off.

  3. Is December 15 still the day by which a solution has to be found, or is there a further extension of that date?

  4. From TTela:

    “It worked intensively on solving all the technical issues surrounding a new solution for Saab in Stockholm.
    Victor Muller explained this morning for TTELA that nothing is finished, but seems optimistic….”

    Negotiations in Stockholm, where Young’s Rachel Pang has participated and Victor Muller and other employees from Saab seems to be in a critical stage. When TTELA texting Victor Muller with the question whether there are any major news to tell from Stockholm, he replies “not as yet”, and adds a Smiley..”

  5. “Negotiations…. seems to be in a critical stage.”
    I don’t know how to read that.

  6. Regardlesss of the outcome, it shows the problems in cooperations between a small and a big player. And by that, the fragile situation of Saab when relying on too many parts from suppliers that are also competitors. The same situation could theoretically arise with BMW. Would they allow their engines to be used in any Phoenix based car? And what about Fiat or Ford as alternative suppliers, in particular for Diesel engines? VM stated that his strategy was to outsource as many components as possible. While that sound reasonable, it leads to high dependency from others. the right mixture of in-house and outsource is still to be found for Saab, imho. If there is any option left, that is.

    • The same situation could theoretically arise with BMW. Would they allow their engines to be used in any Phoenix based car?

      That is a non-issue. SAAB is no threat to BMW and really hasn’t been, ever. SAAB may proclaim they compete against BMW and Audi, but with SAAB’s anemic powerplants and inferior interior materials, they compete only with BMW’s and Audi’s entry-level, lowest-trim models, and don’t even do so competitively when you consider SAAB’s MSRP vs. BMW’s and Audi’s MSRP.

      Now, many SAAB enthusiasts would say “Yeah, but SAABs do not sell at MSRP” but the truth is, car rags and consumer advocate magazines and competitor advertising compare MSRP to MSRP, not actual sale price vs. actual sale price. This doesn’t keep SAAB enthusiasts from buying because they know they can drive off the dealer lot with a brand-new 9-3 for under $30K in many cases, or an XWD model for about the same price as the going rate for an entry-level BMW – and for the selling price, SAAB is a fantastic deal. But, people who are not more than vaguely aware of SAAB don’t know that, and don’t even bother to go to the showroom to test drive one and learn that performance where it counts in the real world belies the numbers on paper.

      Most people really don’t need an ultra-quick 0-60, or 1G roadholding, or anything like that. I happen to be one of those drivers who does appreciate driving such cars (and own a few) but even so I can appreciate a stock 9-3 for what it is: an affordable, roomy, economical and reliable daily driver that I don’t have to worry about people stealing (thanks to redundant redundant anti-theft technologies) when I park it, whether it is at home, at the mall, or the movie theater. I know the car will be there when I come out even if someone tries to steal it, and it’s comfortable enough that I actually enjoy driving it despite the distinct lack of performance. It’s a fantastic car for a daily driver, and if I decide to tune it, I know I can get a bit more performance out of it. A tune won’t put it into ZR-1 (antiquated I know, but it’s still a stellar performer 20 years later) or 335i or BMW M territory, but it would make it a lot more fun for spirited driving through twisty mountain roads.

      I’ve driven mine over 400 miles nonstop, then stopping to fill the tank and just keep on driving multiple times without experiencing any fatigue or boredom, just taking in the sights while driving through mountains and farm lands. It is a great car, and while it doesn’t live up to the MSRP nor product positioning, it’s a solid car nonetheless.

      It is unfortunate SAAB is where it is right now. All too often I am asked “you’re driving a SAAB now? You must be doing really well now” (like many, I was financially struggling after 2001-2002 and am still recovering now after reinvesting everything for years) and I have to explain to them that SAABs are not as expensive as they think, and that they should check them out. I haven’t been able to talk anyone into actually buying one even when SAAB was still in full production, because of all the negative PR that was being thrown about when Koeningsegg and others before Spyker were still negotiating with GM, and SAAB’s crappy advertising really didn’t talk about the product like it used to. GM’s shenanigans pretty much nailed SAAB’s coffin shut, and it’s only now SAAB is dying of asphyxiation in that coffin, having been buried alive.

      Again, short of a miracle from God, SAAB is dead. Saving it isn’t impossible, but it’s going to require very deep pockets, and GM won’t let anyone who has the necessary resources touch SAAB. It does look very much like GM intentionally chose the suitor who was the least-equipped to turn SAAB around. I really believe Koeningsegg would have pulled it off with ease, as would other early suitors. I think the problems with Spyker were inexperience, too many premature announcements, lack of a sense of urgency, and failure to correct major errors in advertising and MSRP.

      • New SAAB buyers getting their cars for a “fantastic deal” (i.e. far below MSRP) is the problem. SAAB can’t make money at the prices its cars sell for. Buyers may be happy with their good fortune, but selling cars at a loss has not worked well for the fortunes of the Company.

        • Saab MSRP is inflated, at least in the U.S. For example, the current 9-5 is not a 50K car in the real world. It’s closer to a low 40′s price tag, which is where it would normally end up under normal circumstances. Most American cars and in recent years, Saabs (and some others) always start with an inflated MSRP and offer big discounts as an emotional/psychological component to selling. Meanwhile, many Japanese brands, BMW, etc., have a more realistic MSRP and tend to discount less.

          • It may not be a $50k car (unless you are willing to include a premium for owning something that is not as common as the competition), but it needs to sell near that if a profit is to be made.

          • The current 9-5 is not a 50k car? This sentence is something I have never understood. Does the car have just one fixed price?!!!!!!
            Last time I checked ‘the 9-5′s’ asking price was between 39k and 56k USD. An equally equipped 300 hp A6 was well over 60k.
            Don’t confuse the state of the company with what the product is worth (how much it costs to build). We’ve heard people who drive 80-90k Beamers say a 9-5 Aero V6 is competitive in terms of handling. Wait for that first snowstorm and a Saab is just about only thing that will take you home safely. My first test drive in a 9-5 was in the worst conditions possible and the car was freaking fantastic.

            If people weren’t willing to pay -when the company was running normally- over 50k for a Saab then SCNA shouldn’t had offered one. Only Turbo4′s. It’s that simple.
            Why didn’t they do any research before importing ALL those V6 Aero’s? Especially without sunroofs.
            I know Saab was in hurry to get something out there but still…

            • Regardless of the MSRP for a particular trim level, SAAB can’t make money selling cars at steep discounts.

            • RS: I think when you consider everything—-powertrain, interior materials and switchgear, resale value, demand…a strong case could be made that the sticker price of a “loaded” Saab 9-5 is excessive. Guys—-I love my Saab too and no one has been more vocal about pushing for Saab to survive—but the fact of the matter is that anything in life is worth what someone is willing to pay. If year after year, Saab has to slash it’s MSRP to move inventory, it’s very clear that the MSRP is inflated—-that isn’t an opinion, it’s a fact—-it’s a market driven fact. The year I bought my Saab (2004) their cars were only offered with 4 cylinder engines. I’m thrilled with my 220 HP ARC—enough power for me, good fuel economy and so far, very reliable. But the perception is that a 6 or an 8 is a step up. Some of the luxury competitors (BMW for example, possibly Audi) seem to have higher quality wood and leather—more metals and less plastics. Am I complaining? No, again, I’m happy with my Saab. But all of this figures into a fair market value for the car. If Saab can’t sell the well equipped 9-5 for around $43,000., tops, without losing money—–they need to re-examine their business plan. Personally, I maintain that they need to move downmarket and begin competing on the lower end with Subaru and Volkswagen—-aggressively—-and not focus so diligently on chasing BMW and Audi. People, this hasn’t worked for decades and I don’t see that changing. Yet with the Saab reputation, they can sell simple, well designed smaller cars (sedans and hatches) in large numbers. This is one reason I have been supportive of getting the Chinese in the picture.

              • If by inflated you mean that sticker prices are high for what you get, that may be (or maybe not), but SAAB MSRPs are not inflated in the sense that they are higher than what SAAB needs to make a profit on the cars.

              • I’m fully aware of the problem of price competitiveness. You need to have a strong case to be able to ask over 50k. Is a new 9-5 worth the money absolutely -if you compare it to the Germans while DRIVING the car.
                To me it seems cars in the US are sold based on how they look on the inside on the showroom floor and what’s the 0-60 time. That’s when Saab’s in trouble.

                To say Saab had chased A and B for decades isn’t true IMHO. GM never let them build interiors and put in engines that could have really done that, so we don’t know how it would have played out. Downmarket is exactly and unfortunately where we’re now and it’s not going great. To try and make a profit on smaller mass production (inexpensive) cars from Sweden would be even harder.

                • Perhaps, a future plan could be higher volume smaller cars from China and higher end models from Sweden, all branded Saab—-or even the Chinese made Saabs branded differently but sold through Saab. In that regard, it would be somewhat similar to Toyota/Scion, but sold in the same showrooms. I think for survival, Saab needs to get more cars sold, more cars on the road—–meaning a good entry level offering. Grow from the bottom up.

  7. “..or crucial stage”

    Critical maybe sounds to negative

  8. … or maybe: in a decisive phase.

    Anyway, yet another F5 day. Really difficult to concentrate in work or anything else.

    Usually I don’t do that much F5 but listen to P4 Väst to keep myself updated. Today, unfortunately, there was a fire in Uddevalla, some 40 kilometers from THN, and they sent their “Saab reporter” to report from the location.

  9. Let’s face this guys; it is as simple as it was stated yesterday;
    1) GM protects its interests and is not really motivated to look into new options
    2) So take an option that is not to be blessed by GM
    3) that option is just to get a loan to restart production at Saab, with all consequences of paying the outstanding debts and salaries.
    4) If that amount needs to be 600 M € or 750 M € is not the question; point is an investment needs to be made to frees Saab from a GM participation in this decision and that the company can do what it needs to do: restart operations.

  10. Make a deal with GM: give them piece of the pie.
    In my humble opinion, YMPD should offer 51% or 81% of any profits made in the venture. OR:
    Give them a royalty on every car sold. OR:
    Pay them a yearly fee for their technology.
    Make a deal with them, since they’re in the driver’s seat. gov’t motors is the bully boy.

  11. A really nice article on the blog saabactu. Full of passion and Saab spirit.
    In French:
    http://saabactu.blogspot.com/2011/12/edito-nulla-tenaci-invia-est-via.html

  12. Can someone list GM’s major demands?

  13. The next Saab modell should be named F5

  14. TTela
    “It worked intensively on solving all the technical issues surrounding a new solution for Saab in Stockholm.
    - We are continuing, said Victor Muller to TTELA at 15:30 on Thursday….”

    SAAB F5……. (Superb) =)

  15. It’s been obvious for several weeks, if not months, that this was the back-up plan if GM didn’t agree to the assorted ownership proposals. IMHO, the original 54 percent ownership proposal would have suffered the same fate.

    Victor, Youngman, and others had to know that a GM refusal to amend the change-of-control clauses was a real possibility – as a result I’m sure the current plan has been under discussion for awhile. It did not surface until now because Youngman would have strongly preferred the proposals GM just turned down.

    It was a bit of a poker game and GM called Youngman’s bluff (a bluff which assumed, incorrectly, that the possibility of Saab’s immediate demise could motivate GM to change its position).

    So now onto Plan Z, where Youngman puts money into Saab in exchange for bonds or warrants which are convertible into a majority stake after Saab no longer needs GM’s IP or after the IP is no longer commercially relevant.

    We have heard that the Phoenix platform is wholly owned by Saab – and this deal will put that statement to the test. If Saab can get the new 9-3 onto Phoenix without strings from GM, then Youngman need only wait a couple of years. (This also illustrates the need for a quick revision of the 9-5 and 9-4x, to get them onto Phoenix as soon as possible).

    • Sounds like a good assessment, Greg.

      I am just hoping that the storm in my part of the world tonight does not put me offline tomorrow in case there is good news. Are we expecting resolution any time between now and the 15th, is that right?

    • Well, there is some GM IP content in Phoenix but probably not too much to make it impossible to make the platform wholly GM IP-free.

      Love the ‘Youngman’s bluff’. Sounds like an avantgarde British movie ;-) .

      Ivo

  16. Is this even enough money to properly fund Saab over two years? I hope this is just the start of ever increasing financial contributions.

    • All I can say is Youngman better be pretty sure what they are getting in to!! So you have the Phoenix platform and a new 93….what is it facing? The new BMW F30 3 series, the new A4 (soon) and the refreshed C class. Not to mention the other competitors from Asia. The new 93 would have to be one AMAZING car!! Unlike the new 95 which got a decidely luke warm/negative reception from the automotive press, they need the kind of reviews the 9000 got when it came out. Moreover, to be completely divorced from GM is going to require a LOT more than 600 million Euros!! They need at least double that to get out of debt and development a class smashing car….if they do this with VM I have to say it takes guts!!

      • I have wondered about VM’s role in the company. While he should definitely be the CEO of Swan and any Spyker entity, Saab needs a professional automotive CEO or CEO wannabe (someone like Mark Fields at Ford – although there is not a hope in hell that he would take the gig). They should do a full and proper search for that person.

        VM should probably remain on as Chairman of the Board.

        • Well, that’s exactly what he wants to be. And was before JAJ decided to step down as CEO, forcing VM to put on the CEO’s shoes.

          Ivo

        • A chairman of the board has the final responsibility for the whole operation, that strategies are correctly chosen, budget and financing are lined up, and supervision and controlling is there. If you have a financial “glitch” turning into a liquidity crisis paralyzing the entire organisation for 8-12 months, if you have a business plan and sales volumes worlds apart, and no precautionary financing being done in advance, all strategies, planning, supervision and controlling processes have completely failed. Would you make such a person chairman of the board in a normal company?
          I would professionalize this function as well.

      • I don’t remember the new 95 getting “a decidedly luke warm/negative reception from the automotive press” … as I recall the positive reviews were far more numerous than the negative. Far more. ;)

  17. I can’t help thinking that SWAN should just be left to close down. Then get the administrator to sell the leftovers on to the Chinese who i am sure would be quite happy to start reproducing the classic 900 & 9000 range which surely must be Saab owned with all the tooling still available! Would do very well as a small niche car brand exporting a retro car, just like the vw beetle!

    • Sigh. The VW Beetle is not based on decades-old tooling found in the back warehouse. It is a 2011 automobile.

      The Saab name would not be part of bankruptcy assets. It is owned by Saab Aero, who likely would not further allow the Saab name to be used for autos. The drama of recent years has caused them brand name confusion, which I’ve read they would like to end.

      The Phoenix platform would be a real asset in bankruptcy, but you’d have to call the car something else than a Saab.

      • There’s all this talk about the Phoenix platform being free of GM IP. Is that really true? Some have said that certainly there are GM components on the platform that would have to be sourced from others, fair enough. But what about the platform as a whole integrated assembly? Is it clear that it was entirely developed post-GM without GM involvement or engineering? Or is it a hybrid where separating out the GM part of it would be essentially impossible?

        • I’ve read (we don’t really know) that Phoenix contains “less than 10%” GM IP. How hard that is to replace – no idea.

        • I seem to recall that early on VM had made it clear that they were making a hybrid of the existing 93 platform with a statement like ” it is a good platform so why get rid of it”. I remember it being reported by Swade on this site. Given the 93 SS platform was 60% unique to Saab, I expect there is a bit of a game being played wherein they have modified Epsilon 1 further and added in stuff from ZF. Likely murky enough to make an IP claim on pre-existing IP more difficult.

        • I’ve heard that Saab owns the Phoenix platform outright. Was development happening during GM’s ownership? I’m sure at some level but I believe GM has no rights to it after the sale to Spyker.
          As for GM shared components, I’m sure there are. During the original sale, Saab and GM both stated technology sharing would continue for many years (~10 years).

        • hugh, I think only Saab can answer this question, but from my experience, I doubt that the platform is bound to GM IP. On the other side, I think that the Next-gen 9-3 will source some parts from GM.
          So putting it simple, the 9-6x, 9-7 and 9-2 that will be based on phoenix can be developed without GM parts.

          But this is only my private view on things.

  18. If Saab goes bankrupt,… companys waiting for it to happened to take over and continue making cars
    sais Rolf Åsbjörnsson. to di.se

    “Would the company still be called Saab Automobile if any of the stakeholders would buy the company at a bankruptcy?
    “I do not say a word more,” says Rolf Åbjörnsson, who will not disclose any of the stakeholders is because he has “professional interest” on the issue….”

    http://www.di.se

    • Did a google on Rolf A.

      Well, this is someone who, for once, may not be blowing the traditional DI hot air, seeing as he is a leading Swedish lawyer on reconstructions, insolvencies and bankruptcies with a law firm that seems to be Sweden’s best in the field of IP and technical licensing. A competitor of Guy Lofalks firm, in other words, but then perhaps one that does know how to move in situations such as Saab’s.

      Ivo

      • Abjornsson and Lofalk have a personal beef that goes years back. In the small pond that is insolvency and restructuring in Sweden they are the two biggest fish – or among them at least, so they often find themselves at loggerheads whenever a large project like this is on the agenda. I believe they even worked for the same firm a while, years ago.

        Abjornsson obviously has good media contacts, because every time there is an issue related to his field, especially when Lofalk is involved, Abjornsson pops up in media with frequent comments. He has been in DI on almost a daily basis, offering his view on his old antagonist’s work, while promoting his own ideas.

        Which one of them is “better” or more knowledgeable I don’t know. I just think their petty little personal conflict is an unnecessary part of this already sorry saga.

        BTW – In the last reconstruction process Abjornsson represented Saab/Opel dealers.
        http://www.saabsunited.com/2009/04/you-make-the-news-saab-creditors-meeting.html

        This time around he is obviously using this situation to blow his horn and boost his profile. Successfully I must say. Media is sucking it up.

        • I am SO tired of Åbjörnsson and his theories. He *wants* bancrupcy. I am starting to wonder if he *needs* bancrucy.
          He has “‘professional interest’ on the issue….”

  19. Quickly reading this article,it appears to me that the answer doesn’t live in China either.

    http://www.chinadaily.com.cn/cndy/2011-12/06/content_14217296.htm

    Again, hope and pray for a good outcome but it doesn’t look good.

    Question, what happens to all of us holding warranties on new cars??? Does GM have any reason to honor those?

    • First article I’ve seen with Chinese biz insight. It well explains why a deal is unlikely.

      My understanding is Saabs through 2009 and those 2010 models produced by Saab when still a part of GM, still have GM honored warranties. Saab’s produced under Spyker/SWAN are a different story…

      • Oh maybe.
        But the article is a rerun referring to the deal that was rejected by GM latest.

      • The article is from the 6 of December, and it talks about the last attempt, and this is already history.

        • It was interesting to see the insight from a Chinese auto analyst and a Chinese economist, as well as the Chairman of Pang Da. I don’t see how the passing of 48 hours would change their comments.

          • Hmm.–The article relates to wether or not BOC is involved and Pang Da is in negotiations.
            Both has been denied, BOC by VM, and Pang Da is not mentioned in the press release, and GL has given up on his attempts, which in that case would be including Pang Da.
            We actually discussed it in comments the day it was originally published, but you may have missed it.

          • Keith,
            on Monday you were denying that SWAN had sent a new plan to GM, but this non-existing new plan was refused by GM on Tuesday.

            I know you have trustworthy sources, but give us a break.

            Come back on the 16th and tell us that “You know that this was going to happen”.

            • I did have that conjecture, you’re right. And it certainly appears I was wrong. I owe you a bottle of Glogg.

              The amateurish PR leak job (a bank in china?) looked like merely a stall on GL’s bankruptcy clock. Perhaps it was a real proposal, but it wasn’t handled like one. Which at this 11th hour is a problem.

              Think of all the announcements of MOU’s / the money is coming / the suppliers will be paid soon / Spyker is sold to Coventry / no it isn’t / Spyker is sold to North Street Capital / lets just pretend we didn’t say that / major financier arrested for embezzlement / wages here soon / Pang Da is out / Pang da says they’re in / a mystery bank / we don’t have a plan but its a framework / ……

              Imagine what SWAN’s credibility is with GM at this moment.

              If after this hideous hack PR total bad management train wreck… VM still manages to avoid bankruptcy…. well damn, he’d be the negotiator of the century. If he does, I’ll eat crow. I might have to front your bar bill.

              • Keith,
                what you are telling me is what news outlets (this included) tell the world. Sometime (I’m still including SU) news outlets trust their sources and a very one sided view on things comes out, sometimes we try to give a broader view on one piece of news and people try to find a way to put this in a dark light.

                But this is only the level we (the people on the outside) communicates about those news. GM, GL, VM, YM, PD and SWAN communicates on a different level. The proposal from SWAN to GM on Friday wasn’t a two liner, nor was it the time before. Al this affair is costing a big amount of money in Lawyer’s fees.

                If VM manges to avoid bankruptcy you might invite me to a beer if you like, but till then try to accept the fact that most here know the reality, and although we hope for the best we are prepared for the worst, and we don’t need somebody that constantly tells us that the worst could happen. I don’t know nor do you what will happen on December 16 2011.

              • I’d start saving up, then. Red J has lots of friends. They all drive Saabs, BTW.

                Ivo

    • Nice formulation though:
      “General Motors is not willing to hand over the technologies to Chinese rivals, because the US automaker has applied some of Saab’s technologies to its current locally produced models in China”

  20. We’re in a bad place Saab fans.
    It scares me that the company is looking for a 600m Euro loan, the capital payments alone will be 3500euro/car over two years assuming that sales hit 100000units/year from minute one. This isn’t hugely likely given that dealers are closing in Europe and the US, the logistics of getting cars from Sweden to China will prove expensive and add to the issues.
    I truly admire Victor, his fight is epic, I want – no need – him to show how the economics of this plan are going to work as I need surety on the NG9-5 V6 Aero that I see as my next vehicle.

    • Who says that the money has to be payed back in two years — and who says it has to be payed back [in money] at all?

      And yep, fingers crossed for a happy outcome! It’d sure be about time…!

      • Peter, quote from VM
        AMSTERDAM — Saab Automobile AB is holding discussions with China’s Zhejiang Youngman Lotus Automobile and a Chinese bank over borrowing about 600 million euros (5 billion yuan) over two years, Saab CEO Victor Muller said Wednesday in a phone interview.

    • If it materializes, it will most probably be a convertible loan. Meaning that the lender may opt for converting the debt into shares after a suitable period of maturity instead of getting the invested money plus interest back. I somehow suspect that this specific lender would go for a conversion. And that that maturity period may coincide with the GM IP rights becoming obsolete and, therefore, academic.

      Ivo

  21. Doesn’t sound like a good time to get a Chinese bank to back a car company investment. From Automotive News China:
    “As China’s air quality continues to deteriorate, a number of cities are considering tough limits on car sales that could trigger a major backlash. Last January, the municipality of Beijing imposed a monthly limit of 20,000 new car registrations, a draconian policy that reduced car sales by 70 percent. The central China city of Guiyang enacted a similar measure in July, and two southern cities, Guangzhou and Shenzhen, may follow suit. This could trigger an industry shakeout.”
    Doesn’t sound promising. :-(

    • Saab will work under the radar. Which means, big sales for Saab are almost not noticed by the big ones, and therefore Saab will be able to sell in China, even unther those circumstances. Saab was not doing bad in Singapore although they have such a restriction.

    • So, as a wealthy Chinese, you set up a company somewhere in the boonies, have it buy your cars and loan/lease/rent them to you. There are many ways to sail around restrictions like that, especially if you have money.

      Ivo

    • Sounds like a potential goldmine to a company which has core competencies in electric, turbocharging, rightsizing etc.

  22. Is GM the largest seller of cars in China OR is it that China is now GM’s largest market?

    One of the two.

    Points being – GM has a great deal a stake in China and they are experienced in doing business in China. I suspect that they had decided that another Chinese company can not have access to their IP and while they still protect their interests there. It would seem GM thinks, and would make common sense to believe, that if a Chinese entity buys Saab that is will begin production in China. No one really cared if Saab continued to build and sell 100,000 cars a year made in Trollhattan. That is why GM finally went along with the original sale and why BMW wasn’t scared of entering into an agreement with the them. In that scenario there isn’t much threat to their wider worldwide business. As long as it was a Western investor planning on keeping Saab as a small European built brand then it was no big deal. Sell Saab to the Chinese and the Chinese start producing those cars in quantity in China for the world’s largest emerging market to compete against your existing interests there and it takes on a whole new threat. VW, BMW, GM…whomever, is NOT going to allow a third party to sell their IP to a company in China that is going to have the potential of being your competitor there. This isn’t about GM. This is about the original deal, agreements, licensing and funding that was set up when someone stepped in to buy Saab from GM. That someone would now like to change the rules, but it is not in his IP partner’s interest to do so. Who in the world in GM’s position would go along with the proposals he has been making? The same scenario would exist if Saab where licensing IP from any other major company and Saab were considering their own sale which would transfer those IP licensing agreements to a potential Chinese competitor.

    • When GM, the EIB, the Swedish government, Pang Da and Youngman all file a motion with the court complaining about Lofalk’s interference and sabotage, then I will believe there is a good chance that Lofalk has acted with impropriety.

      But until such a motion is filed, these complaints by Mueller and Swan sound very hollow.

  23. I do not want to talk about the things what is going on behind the scenes between all the parties involved parties since I do not have a clue. The only thing that I wnat to express is what I feel as a fan, a customer an actually as a former employee.

    1. Why am I a fan of the brand and why do I even feel that I could bring some insight to the SU community?

    Background: (sone time ago) I am brought up in a family which bought SAAB:s as far back as my parents could buy their own cars or could get a company car, (unfortunately they do not drive SAAB:s any longer but it is all down to the facts that they are getting older and want a smaller car, which is not in the SAAB lin up at the moment)

    (not to far back in time): My self an my wife have owned or had quite a few of SAAB:s as company cars and private cars (9-5 2,0t MY99 sedan, 9-5 2.0t SC SE MY01, 9-3 CC 2.0T 205 HPMY02 , 9-5 SC MY03 , 9-3 2,0t MY02, Saab 2,0t SC MY04 )

    The last is actually a car that we still have in the family (still it is low milage , we bought it as new , has done 55000 km since 2004, as our 2nd car and my wife just tells me, do not touch it, She tells me: it is my car (and you have your company car) and it took me quite some time to get it on board in the family eventhough my wife had driven SAAB:s for quite some time, She wanted an other Swedish brand when we should buy a new car, three small kids etc….. (Volvo V70 ….,), I got her to do the test drives and then it was not a question any longer. She does not even want to look at my cars eventhough it is always newer, has more Hp and more goodies (I do not have the oppertunity to pick a SAAB eventhough I really I would like to do, I have to pick Volvos, No I am not working at Volvo cars… I am working at the other Volvo company) . What we are waiting for now is that the production line should get up running again so that we could actually could replace “her” car. The question is if it will be a 9-5 SC, 9-4X or a 9-3 Convertible, it is up to her to decide, but what ever it is I am all in.

    2. Why I am an addict to the brand an why have I some insight and what is my sharing to the SU communitee?
    Answer: I worked at SAAB for 5 years and the learnings I got from that is a big part pf what I am today. By working at SAAB you got an extremely good insight into how an automotive company works by being close to the management and all functions within that. You learnt that nothing was impossible and you could make a difference. It is the best learning that I had in my life and I know collegues, some still at SAAB, and some of them around me and some of them in other places that still says the same. ??? Yes, I did leave the company but it was most around private reasons around commuting but also due to the fact that the direction from GM at that time was to do the 9-7x and 9-2X which was just re-badging and not realy Saabs.

    3. The bottom line. Why am I still a Saab fan? Bottom line: They do not make the best cars in the world but they make them good enough and with personality (there are still some things that I would like to be improved).

    Still there are some areas where they are outstanding. Design: It does not look like somethong else, you make a point eventhough you live in Sweden a I do.

    Other things:Ex last year when my parent could not get back home to their house they came to us and asked if I could brig them back home. I took my Volvo V70 , brand new with wintertires with studs, but what happened? I could not get up the hills with all the snow. I had to go back home, both the the question came , why do you not take the SAAB (6 year old and, worn winter tires) and I said, why not ? Guess what? It is not a 4WD but got us up there, and my parents asked my if I could take a walk back to my place since they needed a car the day after, ( no big deal it was less than 1 mile, (1,6 km) and most of it down hill) )

    Safety: I have been hit once and when you did look at the other car after the crash eventhough , that car hit me in the side on the drives side with the front of the car and that was just ready for the junk yard I could still just walk out and give them a hand to find out that everything was OK. Bottom line my father car at that time was not that nice but If it would not have been a SAAB (or possibly something similar, I would have been in an other shape after that)

    3. I think I know some at least about the “Saab spirit” or at least around hwat you learn by working at SAAB, It is actually one of the best “school”s that I have experienced , my profeccional career is highly influenced by that and …. guess what I have learnt that almost nothing is impossible.

    Our family is still well eonugh privilaged that we have the option to choose what cars we would like to have and one of them will always be a SAAB. I hope that Saab will be around in the future to enable us to have the option to buy a new one but if not (god forbid) I just have to buty at least a used convertible ( and I will take care of that as one of my family members)

    …. What is all this about, I am a Saab fan, I want the brand to be around tomorrow as well, I want to be able to buy a Saab as I know it, it does not mean that it has to be exactly what it has been yesterday but I want it to keep the spirit and the core values as we know it and I know that it is a lot of engineering value that we can not loose. Think about that (and that is what I might think that teh potential investors is looking at.. if they still are around which I hope)

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