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Pressure being felt…

January 6, 2012 in Editorial, News

The administrators of the bankruptcy are probably getting aware of the pressure Victor Muller and the others in the Saab Management Team were under. First thing that needs to be said is that nobody in a very long time anywhere in the world have handled a bankruptcy of this size, budgets and procedures are created on past experience, well in this case there is none or very little past experience to base figures and estimations on. With estimations in this case I’m referring to the work-load the people administrating the bankruptcy had to take on.

Just dealing with thousands of people’s money in terms of the government paid fund is a huge task and right now the administrators are getting under a lot of pressure to answer questions that have remained unanswered for several days. When will the december payment be made and how much money do the employees really have a right to? These are extremely important questions since the employees themselves right now base their whole economy on the money provided by the state system. At a certain point when those aprox 170’000 SEK have been used up the employees will have to refer to their individual un-employment funds provided by the Unions in the Swedish system. But application for that money has to come in at a very exact point which is why it is imperative for the unions to get their questions answered by the administrators.

The administrator have so far just stated that they don’t have time right now and told the unions that they will get back to them on that issue, well the unions do not have the patience to wait which is why they have escalated the issue within the government. And the unions are perfectly within their rights, peoples well-being and livelihood is at stake which is no small matter.

It looks to me as if the law-firms needs to step up their measures and increase the group working with the bankruptcy issue if they are going to handle it smoothly, so far it looks like they are more or less trying to catch up with events as they unfold rather than controlling them. Small issues are being overlooks such as the rights to information regarding the payment details of each employee. Yesterday a lot of department-managers at Saab had to spend the better part of the day collecting bank account details of all the employees since there is currently nobody working at Saabs normal HR department and the law-firm did not have the rights to the information in it, all of it had to be collected again. A big administrative blunder which could have been avoided by keeping the HR department in working order until all the payments were in place or at least a system could have been developed to do so…

This leeds me back to thinking about how administrative tasks were handled by the allies after the end of WW2 in Europe. Most german installations were kept in place run by the german staff in order to keep society working, the administrators could have used this as an example and kept vital systems at Saab running in order to keep things running smoothly by the people who knew how to do the job. It might have been a more expensive choice but at least things work in a proper manner.

The issue regarding warranty in Sweden was also something that was caught by surprise by a lot of dealerships, this too was a thing that the law firm had to deal with quickly and so far the issue has not been resolved. Some reports suggests that it was the administrators themselves who stopped the payments of warranties from Saab Parts and canceled the deal made with the dealerships in order to make Saab look more attractive financially. If Saab Parts were to have taken over those costs the finances of the company would not look as good.

Another matter brought up is that parts have become more expensive. Small reports have started to come in that the net-price of parts have gone up, of course this could be argued in being just a pure market driven reaction. The low orders means higher production costs plus the fact that some parts were subsidized by Saab Automobile. The reality of the situation should become clear to us soon though as the dealership-organization in Sweden have prompted for legal action against Saab Parts.

In any case I can fully understand that the law-firm has their hands full, so many factors involved and so many parties that want answers right away and the only thing the administrators can do is to deal with them one at a time but its getting clear that they might need to increase their efforts in order to maintain confidence in their abilities to control the situation.

During the last year we were fortunate to get a lot of information about the process directly from Saab, it was reported through many channels in the media. This was a very unique situation for a company to be in and at the same time a very unique way for a company to communicate. Most companies would simply have said “no comment” and turned their backs on the reporters, Saab did not. Right now though we are “back to normal” and the information coming from the law-firms is minimum at best.

36 responses to Pressure being felt…

  1. Sounds like a nightmare to figure all of what needs to be done & keep it organized & to also make it clear as to what is what so they can answer questions they already have been ask or new ones that come up along the way.

    I agree it would have been smart to have kept the HR going for a bit longer. It would probably be a good idea to recall the HR personal back for a time as they would know what is where & all that to help make the process of gathering information smoother. :)

    I also agree that they should widen the assistants that are helping the main 2 administrators w/this information gathering.

    I wish them luck as I do Saab! :D

  2. It is painfully obvious that as usual the law of unintended consequences is biting everybody in the back side. When everybody goes around saying that Saab is a failed car maker and one that hasn’t made a profit in twenty years, it becomes a self fulfilling prophesy in the powers that be mindset. Now that the parked car has been chased and run into, the cost of failure is now going to become truly apparent. It would be nice if we could see the new 900 just to mourn what could have been with more help and less enmity from the stakeholders. Now we are left with a situation where people are just drifting in the breeze.

  3. A small correction: the unemployment funds have nothing to do with the unions. It’s perfectly possible not to be a union member (I’m not); laws and regulations apply to everyone. Unemployment funds are totally separate entities and there you need to be a member (they’re actually not ‘funds’ per se, but rather insurances, much like any other insurance).

    Also, while I wouldn’t complain if more information was coming our way, what we’ve gotten so far actually covers most issues you could imagine. I got my note of termination of employment in the mail yesterday. It’s got a host of information in it. Combined with what the administrators have published on their website, very few questions remain. And like you said, they’re under a LOT of pressure. Give them a little more time.. the biggest problem, it seems to me, is that everyone and his uncle want ALL of their very personal questions answered NOW. Give the administrators some time to answer the general questions first, take the highly personal stuff that nobody else cares much about later when they’re past the initial mess. There’s no need to panic – you’ll get your answers soon enough and besides, panicking isn’t particularly good for your health :)

    • +1
      Of course, everyone affected wants to know how they stand. They all have our sympathy. However, the priority for the Receivers must be to contact, inform and entertain potential bidders. Providing that is done effectively then everything will fall into place in due course. Perhaps we should cut them some slack to prioritize.

  4. “In any case I can fully understand that the law-firm has their hands full”

    Oh Dear, poor lawyers, they have to work so hard for a pittance.

    Btw, did this guy Loffalk already get paid for all the great work he did for Saab?

    • Lofalk and Muller, how many bonus dollars did he get to run a company down? You get a bonus of gold star in kindergarten for good work not the other way around. He should have got regular pay and not a dime more. That is usually the creed of a professional manager. If you need to go 24/7, you do it.

  5. Sometimes no news is good news, let’s be patience and wait.

  6. Its also important to remember that there were very good tax related reasons why they claimed they didn’t make any money over the last twenty years. GM frequently moves money around (by charging for parts etc, or for all the development work out of a unit like Saab) so that the profits are in the best tax haven, and the losses are in the areas they can get the biggest tax break.

    For example, General Electric told its shareholders it made $36 bn in profit last year, yet their tax return for I think the 10-year in a row to the federal government, claimed a billion dollar loss. Which meant the government actually gave them money back!

    Saab was treated the same way. GM got tax breaks because they claimed Saab lost money, but in practice it probably didn’t.

  7. Welcome to bankruptcy. My gut tells me these administrators have a bit different expertise than Lofalk whose job it was to reorganize. These administrators are likely to have more experience winding down than reorganizing and they may be in the winding down mentality.

    If so, that might make a purchase of Saab more difficult as these people may not have the same mindset as a reorganizer.

    But who knows?

    But obviously, this poses a huge challenge for any law firm(s) that may be short of manpower to handle such a huge job.

  8. During the last year we were fortunate to get a lot of information about the process directly from Saab,,,Right now though we are “back to normal” and the information coming from the law-firms is minimum at best.

    This is what I was thinking but some of the comments above did provide some helpful perspective.

    …nobody in a very long time anywhere in the world have handled a bankruptcy of this size, budgets and procedures are created on past experience…

    What did you meant by this? I may be a little confused because the definition of bankruptcy in different countries means different things and, therefore, different comparisons. GM and Chrysler were big bankrupties (under US law).

    My thirst for information – aside from a Saab is saved solution – is how the Swedish bankruptcy process works so I have a better idea of what is possible and when things are likely to happen (even if a milestone is a defined action and not a date).

    • +1.

      Tim, I’m not sure what is the purpose of posting another absurd article. On one hand you are using words like blunder and in another ‘In any case I can fully understand that the law-firm has their hands full’.

      Please why not report some concise news rather than a purely speculative approach to a rather difficult and overwhelming task for the administrators, who have been very fair in their approach and even praised VM and the passion for the brand by its employees and others alike.

      How about reporting the news about the union refusing to allow workers back onto the production line to finish off the partly built cars.

      • Joe, this is an attempt to talk about the why the unions are not willing to allow the workers to go to the production line yet. We have tried not to just repeat what you can find on almost every news outlet.

        The trustees and their teams have a lot to do, and the unions want things to be solved before workers are allowed to go to the production line.

        • ‘We have tried not to just repeat what you can find on almost every news outlet’. So you rather make up speculative articles that encourage discussion, and the creative headline . . . Pressure being felt, once again a pure speculative approach by Tim. This is the second time he has decided to conjure up articles of a personal opinion.

          That is a bit contradictory, after all many people myself included visit SU for regular news about Saab, not to find it probably better to start looking elsewhere since there’s an embargo on Saab stories which don’t wash too well on this board.

          • Why is it Joe that in the last two weeks that you have been a member at this site you have not made a single positive comment? If you dislike this site and what I write so much why do you even bother to come here an yet a lone comment? Please answer me on this one!

          • Joe, you may think what you want, but Tim has his sources, and when he writes something here he does not speculate. Nevertheless the article is tagged as editorial, which to my understanding means, opinion from the editor. ;-)

      • That thing about the unions stopping the production are unconfirmed rumors spread by autocar.co.uk and has not been confirmed or commented by the actual unions. To my knowledge not a single news-organziation has picked up or even been able to confirm that story…

    • Steve,
      even the trustees have said that (at least in Sweden) this is the biggest bankruptcy process they’ve ever seen, and now they have to handle it, and it looks like things don’t scale linearly. ;-)

      But, as I’ve said, this hasten stated by the trustees themselves.

  9. The following is from the last two paragarphs of the 30 December 2011 English version press release by the receivers…

    Bankruptcy proceedings are now in an intensive phase of information collection and evaluation of the company’s business and situation and the securing of assets. During the period in which Saab Automobile was in reconstruction, car production – which generates revenue – has been at a standstill, whilst other possibilities of bringing liquidity to the company were explored. This means that the receivers face, in part, a contractual-, salary- and collateral-structure of considerable complexity and, in part, greatly limited liquid resources. The receivers are working hard to clarify these circumstances. Meetings have been held with, amongst other, the management of the company, union representatives, municipal council leaders in Trollhättan, the county governor, the National Debt Office and the Ministry of Enterprise Energy and Communication for a mutual exchange of information.

    During the past eleven days, the receivers have also met a number of Swedish and foreign parties which have expressed their interest in a possible acquisition of the business or parts thereof. Contacts thus far have been positive and provide some hope that there may be an alternative and even combinations of solutions which would result in some continued business and an expedient winding up of the bankruptcy estate. We are unable at present to provide a timeframe as to when more concrete alternatives can be presented or when the matter can be closed.

  10. http://jalopnik.com/5873667/this-is-how-desperate-gm-thinks-saab-owners-are-to-not-own-saabs

    Check out this link. Oh my God, GM is so out of touch, it would be the most hilarious thing I’ve ever seen if, as a Saab owner, it wasn’t so sad to me. This (once again) shows just how unbelievably arrogant GM is. Unreal.

  11. Yeah—-let’s understand this: If you want to bring your Saab in and trade it on a piece of crap Chevy Sonic, they’ll give you a $250.00 discount. LMAO. Of course, the individual theives that are the GM dealers will give you thousands less than your Saab is worth on a trade-in—-so you’ll end up way in the hole if you’re even interested in the stupid offer. This is so insulting, it’s beyond belief.

  12. could anyone let me know which is receivers website ?

  13. summing up the ignorant fate of SAAB….

    Trillian: You idiot! You signed the order to destroy Earth!
    Zaphod: I did?
    Arthur: He did?
    Trillian: Love and kisses Zaphod? You didn’t even read it, did you?
    Zaphod: Well, I’m president, I don’t have a lot of time for reading.
    Trillian: My whole planet destroyed because you thought someone wanted your autograph!

    …and there you go…

  14. Per-Erik:
    Don’t Panic (large friendly letters)!

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