December 5, 2011 in Editorial
Monday again, and finally we have something to report. Yesterday news broke that a new ownership structure has been reached to give Saab a lifeline. No real new facts in this post of mine, I’ll just add my few cents to what we now know. Things have turned out in a different way as I had expected a week ago to see NSC going for Saab, but then again Victor always has a trick up his sleeve. Still, the general plan to bring up a third party to cover the stake Pang Da and Youngman can’t get is there, just with slightly different players.
So let’s take a look at the basic info we got confirmed yesterday. Here’s the new ownership structure again:
Chinese Bank: 29,9%
First thing one would ask is where Pang Da has gone. I always emphasized that they a are a car distributor and their main goal always was to be exclusive distributor for Saab in China. That’s nothing you need a stake in Saab for, though it would give a distribution contract even more value. Besides that it has been reported a few weeks ago that they spent lots of money on supporting lease deals so there is quite a bit of work to be done at home for them. Could be another reason for them to step back and let the deal happen as the return for their investment, pre-paid cars, will come with that deal anyway.
Youngman went below the 20% barrier that GM has set. The only way for them to stay in the deal if you ask me. As eager as they were to take over 100% (or 60 personally) I think they just had to realize that this will never work and step back to protect the investments they already made. I did not add up all those small sums they injected but I think this should make up a reasonable amount by now and they don’t want to lose that. Their goal was to get cars developed, the Saab sub-brand, to get their share of the Chinese market. They get that with this deal. So in the end, they get what they want.
Some may wonder why the Bank of China is above that 20% barrier. Reading between the lines it became quite clear that GM’s problem with Youngman was not because of their Chinese origin, it was because they are a car maker. The Chinese Bank is just a strategic investor that is not after getting control over technology. So it should not matter for GM where they come from. To me it feels good to have them on board as they should seriously have the financial muscle to pull this through. Of course the have to want to use it but as they entered now, they are surely aware of what it takes to get Saab back on track. And their involvement should ask please the NDRC.
You can never predict GM’s reaction but I’d imagine that this deal was tailored to the GM demands very carefully. There is just no time left to go back to the drawing board again. This has to be it. It is also good news that the EIB loan shall be paid off and this may be one of the advantages to have a bank on board. It will mean that with SweGov and EIB two more parties who have to give approval to every move are out of the game.
Looking at it from that view it can’t really worry me that SweGov tries to interfere again. That may be what we heard about in the reports of “SweGov steps in.” The headline just missed “the way” at the end. I never got what their point was and I don’t bother trying anymore. I just want them to step aside. I think Maud was right as she once said that SweGov does not know how to run a car company. I’d even extend it to stating that they have no idea which stakeholder is the right one for Saab. I just hope they get the bill for that at the next election.
I’ve been pretty hard on Guy Lofalk in the past and I still stand to that. I believe that the Geely stunt has caused a lot of turbulence and in the end led to the death of the original plan with 54 % Chinese ownership. I just hope he focusses on his job and gets the deal through now despite interfering governmental noises. I don’t think he wants to lose more reputation and if he gets this done now he will be among the good guys, at least in public perception.
If you ask me, this deal looks like a good one. Not the best possible deal maybe, but it gives Saab a lifeline. Honestly I am not angry that GM blocked the 100% deal, I think this one includes better chances for Saab in Trollhättan. Still, the ties to the important Chinese market are there. And at least the Chinese Bank should be powerful enough to inject the amount of cash Saab needs.
On a personal note I really hope this means some security for the employees at Saab before Christmas. In 2009 they went through a huge uncertainty in those days and they should not have to experience that again. My highest respect to those who stayed until now. This is not easy. Let’s hope this gets done.