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Detroit News: Saab NA hires consultant

December 21, 2011 in News

This comes from the Detroit News:

Washington -Saab North Americas said Wednesday it will not file for bankruptcy, even as its parent company in Sweden has sought court protection this week.

Saab NA’s president and chief operating officer Tim Colbeck said the company had hired Bingham Farms-based McTevia & Associates as an outside administrator to ensure that all creditors are treated fairly.

Parent company Saab Automobile AB filed for bankruptcy in Sweden on Monday after its former owner General Motors Co. blocked a deal to sell the company to a group of Chinese investors.

The company, acquired by Dutch luxury car company Spyker Cars in February 2010, has produced few vehicles since March and struggled to raise enough cash to pay bills.

Colbeck, who is a former Subaru executive, acknowledges Saab has “not very good odds” to keep the company from liquidating.

Jim McTevia, the company’s managing member, said he plans to conduct a 30-day or longer review of Saab North America’s operations, before offering the company guidance on its next steps. “I am going to keep the company operating as long as it has the capital,” McTevia said in an interview.

He said Saab North America accounts for more than 35 percent of Saab’s worldwide sales. “There is a tremendous amount of value here,” McTevia said. He’d like to keep the company operating long enough to find a new buyer for its parent company in Sweden – and says it is smarter and cheaper to keep Saab North America out of bankruptcy.

Colbeck said the best chance for survival would be if a company purchased Saab out of bankruptcy in Sweden. He said it’s disappointing that the “hard-fought battle to save this brand” hasn’t succeeded.

Saab has been forced to suspend all warranties and dealer incentive payments. It hopes to restart its parts business.

Saab is working to restart warranty coverage for vehicles in dealer showrooms, Colbeck said.

Saab’s 188 U.S. dealers have 2,400 Saab vehicles in showrooms and last month sold just 356 vehicles.

Colbeck acknowledged that Saab North America could be forced by its creditors into bankruptcy — or it could opt to file for court protection down the road — if no buyer emerges for its parent company.

Under the terms of its sale of Saab in February 2010, General Motors Co. will underwrite warranties for all Saab vehicles sold before February 2010.

Colbeck declined to answer questions about the fate of Saab North America’s 50 employees at its Royal Oak headquarters or answer detailed questions about current financial situation.

Without a new buyer, Saab — the quirky company that produced thousands of turbo hatchbacks and pioneered many safety advances — will go out of business.

Saab is the only one of the four brands that GM exited during its 2009 bankruptcy restructuring that has made it this far. Pontiac, Hummer and Saturn have all gone out of business.

Thanx Bernard for the tip! =)

28 responses to Detroit News: Saab NA hires consultant

  1. Sadly, says nothing about warranties POST GM.

  2. Don’t know what to say, just feel bad….

  3. Good article, it paints Saab in good light while still keeping to the facts.

  4. Just wondering, they want to restart the warranty for the vehicles in dealer’s showroom, but not that of post-GM saab cars in the road, which means when these saab cars run out the showroom, they also don’t have warranty either? Just joking…

  5. “Parent company Saab Automobile AB filed for bankruptcy in Sweden on Monday after its former owner General Motors Co. blocked a deal to sell the company to a group of Chinese investors.”
    It wasn’t about selling the company, and Detroit News knows it but tries to make GM’s unfair decision sound more fair. Dislike!

  6. That was typical GM, just trying to look good in a situation they hrlped cause…

    ”Under the terms of its sale of Saab in February 2010, General Motors Co. will underwrite warranties for all Saab vehicles sold before February 2010”.

    So much for their hyped press release….

    • In the US GM was liable for warranties through the 2009 model year. They have been supposed to be reimbursing Saab NA for them. So, by “offering to pay warranties” they are trying to look like they are being nice. Anyone who has followed GM in the past 4 years knows GM is not doing anything it does not have to do, without putting some spin on it to make them either look “generous” or have good reason for their arcane actions. Last that I knew Saab NA had a very large receiveable from GM for warranty claims that Saab NA had paid the US Dealers but GM was holding back payment. Doesn’t sound like a “business partner” I’d want to have…..

      • This is exactly what I commented in the previous post, GM takes care of cars sold before Feb. 2010 is not because they are good will, is because they have to do that. But lots of folks doesn’t believe in me and still hope GM also being good will to take care the post–GM cars…

        Dame, after two clear NO to YM and VM, you should see the real face of GM, still dreaming…?

      • To be fair, do we know if GM was being paid for delivery of 9-4x’s. I don’t think I’d being sending cash to SCNA on top of waiting for past due payment on product I’ve already delivered. I’d offset — rather than pay warranty claims send SAAB an updated statement showing credit against balance due on 9-4xs produced.

        • SVX92- Whether or not GM got paid by Saab AB for 9-4X’s or any other matter should have (legally) no bearing on GM paying Saab NA. In the simplest of terms Saab AB and Saab AB are different legal entities. So, to be fair isn’t even in GM’s vocabulary. In the real world GM is wrong—dead wrong.

  7. Actually, I see a silver-lining here … The fact that Saab NA is holding in is good news in my mind. Clearly, they see a very real chance that Saab could emerge from bankrupty (albeit with the possibility of bearing a different name). By sticking around, Saab NA can ensure that as much of the NA corporate structure and dealer network can remain intact as possible so that once “New Saab” is online, it will be possible for the cars to be sold in North America.

  8. Just wondering, can SCNA survive just based on part business? If they can, that will be good news for us coz it is easy to buy part in the future.

    If nobody take care of Saab Auto AB, then we are done with our warranty. We should file a class case against GM. Please see here: http://www.saabsunited.com/2011/12/never-ever-give-up-2.html/comment-page-1#comment-173704

  9. Guys, News from Yahoo do mention that SCNA try to find a solution for warranty of the post-GM cars. Which one we should trust? detnews or yahoo?
    —————————————-
    Saab Cars North America to Pursue Out-of-Court Solution
    http://finance.yahoo.com/news/saab-cars-north-america-pursue-205600239.html

    ROYAL OAK, Mich. , Dec. 21, 2011 /PRNewswire/ — Today, Saab Cars North America has elected to pursue an out-of-court resolution for SCNA operations. The SCNA Board of Directors believes this is the best course of action to maximize the enterprise value for its customers, dealers and creditors. McTevia & Associates, a nationally renowned and respected financial advisor to companies in transition, has been chosen to direct the process. In the interim, SCNA continues its day-to-day operations.
    “The SCNA Board’s decision to explore all possibilities out-of-court is the most appropriate direction to take for customers, dealers and creditors,” said Tim Colbeck , President and COO, Saab Cars North America. “By having an experienced, outside Administrator oversee the process, the interests of all parties are better served.”
    Most importantly, SCNA is committed to developing a solution that would provide warranty coverage for Saab vehicles covering model year 2010 and 2011 models. As has been previously reported, GM is honoring Saab warranties for model year 2009 and prior years, per agreements.
    SCNA is aggressively investigating all options aimed at reinstating its parts business in North America in a timely manner. Saab Parts Company in Sweden remains operational and not impacted by the recent announcement regarding Saab Automobile AB.
    Swedish Automobile N.V. (SWAN) announced that Saab Automobile AB, Saab Automobile Tools AB and Saab Powertain AB filed for bankruptcy on Monday, December 19 , 2011.

  10. Would they be willing to take donations?

  11. I prefer yours.

  12. I am still missing how a company that is not under court protection can stop paying warranty claims and/or make the statement they “suspended” warranty coverage. SCNA seems to backing itself into a corner legally. Either be lumped into the bankruptcy or honor your contracts. Can any north american based lawyer chime in on this?

    • It hasn’t backed itself into a corner, it got pushed there. While they, for the moment are still solvent, it gets really complex when your foreign parent go bust.

      SCNA realizes it does not have the funds or simply can’t, due to parts, honor the warranties to their full extent, over time – even if it can, today.

      By appointing themselves an administrator, they can still legally control the company, but hopefully show their trading partners and creditors that they are making the best attempts for the benefit of everyone.

      They are in a tough place through no fault of theirs, and they are handling it very professionally, I think. Their next moves will be influenced by what happens Next in Sweden, but I doubt if much will happen until after Xmas.

  13. As I recall, Peugeot America had offices for quite a few years after the marque pulled out of the USA and Canada in 1991. It oversaw warranties and was the primary parts distributor for the region. Perhaps this is the gameplan for Saab NA as well. I suppose they could also market their dealer base and infastructure to a vehicle manufacturer who needs a turn-key operation in North America as well– small luxury companies like Fisker and Tesla (not to mention Mahindra who have been trying to get into the USA) would be wise to look into this. I see this as a very smart move.

    Regarding Saab warranties, most dealerships already can offer a warranty from a 3rd party company like Vehicle 1. When I bought my pre-owned 9-5 (which was #204 off the line– I sure miss that car), my dealer offered me such a 3rd party warranty. This should be the way forward in case GM or Saab can not or do not cover the remaining new cars on the dealer’s lots.

    • Yes, this is right, but this still has to be paid for by someone. Dealers have already paid for cars WITH a warranty. Now, they are faced with selling cars at a loss and then coughing up for some warranty too…

  14. Strategically, this makes sense for the moment. If SCNA filed for bankruptcy, unlike Sweden, it would be game over, and liquidate.

    The probably couldn’t entertain chapter 11, ( bankruptcy protection) as it’s hard to make a case to the courts that at the moment there is anything worth protecting, in the long term.

    It appears they have some cash to continue in the short term, but I don’t know if there is any revenue stream currently. ( perhaps they are still owed money from dealers from cars in inventory ).

    Something better happen in Sweden in days, otherwise these satellite entities will surely start falling like dominos.

  15. Saab? Quirky? Who knew?

  16. It’s funny, I don’t really view my Saab as “quirky.” Keys between the front seats? Well, let’s see: Do a little research to find out about GM products (many of them) with ignition problems—-and GM saying it’s “the weight of people having too many keys together with their car keys—-hanging from the steering column. It pulls down and causes issues with the ignition contact.” Well, I see that as being quirky. And it’s not been a problem on my Saab!

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