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James Cain does it again

February 29, 2012 in Editorial, News

Today we were again faced with some statements from James Cain regarding GM and their stance towards the parties that are interested in Saab (from E24.se):

Our contact with Brightwell consisted only of several letters they sent with requests to start a discussion. We answered that we are not interested. It has never been any negotiations or discussions, he said.

TT: Why did you not agree to meet them?

- We stand by our policy not to sell technology licenses to a new owner for Saab.

TT: Not in any way?

- No.

TT: Typically in business, everything has a price tag.

- Not in this case, says James Cain.

TT: Can you describe why GM does not want to give Saab a chance to survive?

- They have had several chances to survive. The business has been in terrible shape for a long time. That’s why GM, when we had our own problems, decided to close down Saab. It was not GM’s fault that Saab decided to stop paying their suppliers and their employees.

To make it short: I do not believe that. As I stated before he is a spokesman and his job is to tell the press what he is told. But there are always some things that are handled in certain levels of the management that don’t give reports to the press department about what they are doing. It is as simple as that. So you can’t even blame Mr. Cain for not knowing about everything, he is dependent on the info he gets. But what I really don’t like is the tone he uses from time to time. Maybe it is because GM did not like Brightwell openly stating that they were in talks. Maybe it is because Zamier once said “of course we are not negotiating with their spokesman”. But there are still better, more professional ways of stating something than the way he did. If GM wants to keep things behind closed doors I can repect that but if you want to deny do it in a proper way.

We at SU have been in contact with Brightwell and honestly I see no reason why they should have lied about GM. They put huge effort in this and noone spends some millions into something like that just for fun. They believed in Saab and had a very interesting and serious plan how to bring Saab back to life. And obviously they got quite far with GM up to a certain point.

It was pretty clear that we had to say goodbye to one or the other party at a certain point of this process and we still have a few in there, so there is no need to panic. Still it is sad to see Brightwell leave that soon.

As I already stated yesterday my belief in this is that GM found another party who fits them better or has more to offer. And that is not only meant in terms of money. There are other benefits that GM could like even more. In China they are facing a market that is more and more driven to suit the local brands. In Europe they still got their problems with Opel. So whether they like it or not they need some partners in certain fields to protect the main interest of their shareholders: to keep going and head into the future without facing a 2009 deja vu.

I know that not all of you may follow my arguments in this and there is a lot of personal view in here. But we have learned to be pretty critical towards GM. So why should I take James Cain’s words for the only everlasting truth?

Digging into his last sentence I would even want to correct him an bit. GM decided to sell Saab due to their own problems and the wind down decision only came because they could not agree with Spyker in time. Or should I take this a a freudian slip that tells me GM’s initial general intention was to close down Saab? I think I would not go that far but it could make one think.

On the other hand as a prove for GM’s goodwill he reveals another thing:

James Cain now reveals that GM was in favor of the Russian financier Vladimir Antonov, who is suspected of financial crimes, if he would have gone in with money.

- We had an agreement that had allowed him to invest in the company, but it did not succeed.

But that is another story…

270 responses to James Cain does it again

  1. Would it be an option for Saab to buy GM? I have heard GM still hasn’t been net positive for its DIP funding source (ahem.. the taxpayer). Would it be possible for Saab dealers and others could foreclose on GM and make them more market-based in the future?

  2. Found this list of bidders on the net – searching Yahoo but can’t find it again. t was in a lengthy article.
    “Bankruptcy trustees have confirmed that offers were filed before the deadline yesterday. One of them is China’s Zhejiang Youngman Lotus Automobile again. Other potential buyers are rumored to include Chinese automaker Geely, Swedish sports car maker Koenigsegg, Indian firm Mahindra and Mahindra, and Fiat. One speculative and maybe wishful rumor has BMW in the mix. BMW has done a great job with the revival of the Mini brand and has demonstrated a unique ability to take that unique brand and revive it successfully.
    Of the possible buyers, it doesn’t make sense that GM would approve a sale to the Chinese given its past issues. So a sale to another automaker seems most likely. Let’s hope the new buyer is well capitalized, has deep manufacturing and technological resources, and understands what makes a Saab a Saab. Otherwise the brand will be destined for the ash heap of history and go from being a Saab story to a sob story.”

  3. why is this a surprise ?

    GM has consistently said no all along. Look at the hard facts. 9-3. Its already long in the tooth, if they put it back in production, how many units are likely to be produced before the new 9-3 comes along – 20 000 units ??

    9-5. Doesnt sell at the prices they were asking, that’s for sure. Can you make a business plan for a lower sell price ? doubtful.

    9-4. They made 500 or so units, as of today, there are still 67 available. GM will not go back into the contract manufacturing business.

    Saabs volume is simply a rounding error for GM.

    Any buyer of Saab needs to think beyond GM. anything else is just kidding themselves.

    therefore the “European car manufacturer” bid is the pony I am backing. Anything else wont get out of the starting gate.

  4. I’d just like to point out that it no longer matters a jot what GM says or does. Bidding has now closed. Each of the individual bidders will have made their play knowing full well what is their own individual relationship with GM. Either they have GM’s agreement for what they propose or their plans exclude GM involvement. This is now a done deal and we’re just waiting to hear what the winning bid has as a plan for the Company.

  5. GM says, “Let’s try another European automaker and see if the results are different….”

    http://money.cnn.com/2012/02/29/autos/gm_peugeot_alliance/index.htm?iid=HP_LN

    • GM never learns, do they?

    • I saw an announcement about that on the BBC this morning. They are doing it to try and reduce the development cost of future Opel/Vauxhall models. Opel are losing millions. Peugeot are losing millions. GM hope to keep the customers of both in future but sell one car to both.

      The French aren’t keen on outsiders. I don’t hold out much hope. GM have no track record of success overseas.

      Maybe GM have promised all their technology to Peugeot in the short term.

    • The PSA Peugeot Citroen want to be careful who they get into bed with.

      I do find it rather strange, that GM should partner PSA, to save money on purchasing parts and materials for their cars, when GM has Opel to do just that.
      The Peugeot family make better cars than GM, [having just driven both in Spain myself].

      Lock up your IP, PSA…….

    • This is exactly what Saab did with Fiat/Lancia in the early 1980s to produce the 9000/164/Thema.

      • And the fantastic Fiat Croma, not to forget. But not exactly the same. Almost nothing in the 9000 is identical to the tech content of the other members of the Tipo4 quartet. The Italian solutions were considered inferior and lacking in quality by Saab engineers (something that repeated itself more than once during the GM era with GM Europe’s tech input), so they just redesigned just about everything. That made the 9000 -arguably the best Saab ever- so expensive to build that it had to be pitted pricewise against luxury-class icons such as the Merc S-Class and the BMW 7-Series to prevent absorbing a considerable loss on every unit sold. The sales figures of the quirky 4-cylinder Saabs against that kind of firmly established 6- or 8-cylinder competition were predictably poor, the operational losses were mounting and, in the end, prompted the Wallenbergs to sell out to GM. So, oh irony, the best car Saab ever built ultimately caused -or at least sparked- the present-day downfall of the brand.

        Ivo

  6. GM have no reason to licence their IP to anyone wanting to buy Saab.

    They clearly know any deal would be of short term benefit to them, as NO ONE trust anything they say or do & a new Saab owner would only want their cooperation until they could replace the IP.

    GM know only to well this is what will happen, so effectively they also know that any future Saab factory & development would be of long term Harm to them.

    SO WHY HELP NOW………when they will be a major competitor in future

  7. GM appears to have made it quite clear it wants Saab dead. Any new buyer of the crumbs has to start from scratch and without a few billion dollars it wont really be worth it. :(

  8. GM is not a successful business … it has always been run by bumbling idiots… it is nothing but a house where executives go in and out of, walking always with many millions of dollars and more. It is also a cancer that if torn away form the fiber of the american fiber would cause great short-term harm.

    • Scire: You’re wrong. They ARE a successful business—they are showing profits—it’s just that the way they achieved their success is…ummm…let’s just say “unorthodox.” Most companies make a profit by being good at the business they are in. The business GM is in—-designing, manufacturing and selling cars—-they’re not very good at. Begging for handouts—-they honed that skill to a level never before seen. “Mooching” is what they are best at, as evidenced by the billions and billions of dollars fleeced from the U.S. Treasury to float them (for a few years at least). GM = Government Moochers.

  9. Can somebody tell me how come GM seems to find SAAB such a frightening enemy, if this statement is true? :

    “They have had several chances to survive. The business has been in terrible shape for a long time. That’s why GM, when we had our own problems, decided to close down Saab.”

    No logic in this at all! It only exposes the real agenda for GM: destroy SAAB so it will not be able to compete on the market!

    It would be a far more intelligent way to explain why to me… :-(

    • The reality is more likely that GM does not want the distraction. The few Saabs made under Spyker brought no real revenue to GM, but it did provide a distraction. Meanwhile, GM is doing well with its current strategy with fewer brands.

      • And they’re doing especially well with their recent strategy of begging for taxpayer billions like a homeless mongrel would beg for a scrap of sirloin.

  10. If in fact the rumor is true and BMW is the new owner, they do not need Ganster Motors for anything!

  11. It seems like all rationality has flown on the window in these comments and emotion has gone off the deep end. Nothing GM is doing is illegal and if you break it down very simply, GM gave Saab a chance by selling to Spyker, they failed and now GM is washing their hands of Saab. They aren’t playing nice but that’s business and to be honest, no one really cares but Saab lovers. It’s time to get past the GM hate and move on, the statement that they aren’t going to source cars to anyone is not news, the fact that GM wants Saab gone is not news either yet fellow Saab lovers on here are acting like a dumped girlfriend who just can’t get over it and move on. Its’s time to treat GM like a memory instead of the company you all hate yet at the same time expect to save Saab.

    • @Alex740: you conveniently left out the fact that GM pulling the licenses in December breached a number of contracts they had signed with SWAN. Too bad there wasn’t enough money left to take GM to court, eh?

      You breaking it down very simply is also leaving out a huge portion of another problem. GM’s selection of the final bidders back in 2009. It wasn’t pretty and it certainly gives some indications of GM’s intent.

      • I’m not going to defend GM, I don’t like what they have done either but It’s all done and much of what is being brought up here has been done for years and we just can’t get over it here at SU. Time to move on and stop getting so riled up every time GM does exactly what is expected of them or in this case, exactly what they said they were going to do by not licensing the technology that belongs to them.

      • Actually, if Saab had a real case to bring against GM for breach of contract, it would be considered a potential asset in any bankruptcy proceedings.

        In 2009, GM selected the final bidders to reduce the chances of Saab being having a foreign company from a place with weak IP laws.

        Sound familiar?

      • Didn’t Citizen Cain say something to the tune that SWAN/Saab defaulted on payments for IP licences and parts supplied? Wouldn’t that be part of the 100 million USD GM claim they have been stiffed for?

        Ivo

  12. BMW is going to buy Saab, and will get all the licenses from GM it wants. Saab will be positioned as the brand for individualists who appreciate design. Jaguar and Mini show there is a market, but a midsize design brand is lacking so far. BMW learned with their former 5 its designs can’t be too progressive (and is ever since just as middle of the road as Audi and Mercedes), so that’s were Saab comes in. No other brand has more potential in that segment than Saab.

    BMW having access to GM’s IP is not an issue (they already have similar technology), so GM will be happy to earn some cash on their IP. As GM knows they will need BMW somewhere in the future in whatever market, so slowing down BMW’s Saab-plans is not an option.

    BMW’s backing will make Saab easily sell 100,000 cars with their current portfolio. And that’s only the beginning. Suppliers will jump onboard quickly, as they see the potential of Saab and the bigger BMW pie. Production can start within 2 months.

    Smart move BMW.

    • He had a dream….

      Great stuff. Let’s hope it’s still there when you wake up.

      Ivo

    • I’m on board with you. Please make some space on your bandwagon for me. If this takes off in the direction you claim it will—-we are going to need something as large as a cruiseship for enough space to give everyone else who wants to be with us a seat!

  13. All,

    A couple of points: 1) I think the majority opinion is that had GM not bought out SAAB in the first place, the Trollhattan facility would have long ago been converted to flats. I am a US tax-payer who thinks that by and large GM produces crap products and generally shows a very backward and conservative USA-centered corporate mentality. As Jeremy Clarkson said, GM got fed up with Saab engineers spending money that GM felt they didn’t have to make improvements on the crap components that Saab were given that GM felt they didn’t need.

    2) Given GM’s approach, they did what they considered was in the best interest of their shareholders, because they lacked the imagination and vision to see what Saab really was about.

    Insofar as why is Saab so absent in the USA press? IMHO, that has to do with inadequate marketing. Saab USA (the largest market, after all) either lacked the right people or the right amount of money to influence the media, and like in every other situation like this, the media formed their own uninformed view. Also, the message was truly appalling. “Born from jets” was not true and was never what Saab was about. Unparalleled driving experience, (not flying experience), unparalleled safety and definitely unparalleled all-weather performance is what Saab was about.

    In addition, the press began to use terms like “unique” and “quirky” to describe Saab, when they should have been influenced use terms like “advanced”, “forward-thinking”, “innovative” etc. This another example (and there are many others) of a superior product being doomed by inferior marketing.

    What is worse is that things had evolved to where Saab had less and less influence over that they were given to work with. As Clarkson said, they were given the Cavalier and told to change the body and the badge. To GM’s view, all Saab was was a pretty shape and a badge. They lack the imagination to appreciate good engineering when they see it, as anyone can tell from looking at any GM product.

    So they replaced a superior platform (the 99/900) that featured things like a front-wheel handbrake, and proper gearshift components, with a middle of the road middle-aged bland platform that had rear-wheel handbrakes and a cable gearshift that felt like a toy. (I turned that car down based on that alone). To GM’s view, that was all that was necessary to create a “new” 900 since they had no way to appreciate the beauty of the old one.

    The question is why/how did Saab get to the point where GM was telling them what to build? What happened to the company that led the industry in innovation in the late 70′s and 80′s? As I have said earlier, that was when Saab was doomed – when GM got involved in the first place.

    There is no point in personalizing this by attacking their spokesman. He is just doing his job, and he certainly was not responsible for the acquisition of Saab, nor for what happened since. The real problem is with who negotiated the terms and conditions to sell Saab to GM in the first place. That was the time to put in the safeguards that would have saved them from having to resort to badge-engineering.

    A few years back, when as part of the economic stimulus plan the USA government had a program that subsidized trading in old “gas-guzzling clunkers” for more modern and efficient cars, there was an article in the New York Times describing the program, along with a photo. The photo was of of a hapless 9000 that had seen better days. The badge (as we know Saab badges do) had 1/2 way come off and was cracked, peeling and faded.

    This was a marketing worst case disaster. Why was there a photo and why was it of a Saab and not a Hummer? or an Oldsmobile? or some big stupid American SUV? God knows there are millions of those driving the roads here, getting 5 miles per gallon, rusting and pouring out smoke from the exhaust. There are many more old SUV’s than old Saabs here. . But they used a Saab. Why? IMHO, because for some time, there was no marketing presence, so all the press paid attention to those brands that shouted the loudest – ie had the most money, and made up whatever story suited their needs to cover the brands that don’t.

    I doubt GM was particularly generous with the marketing budget for Saab, particularly if they were pissed off at Saab for (in GM’s view) over-engineering the products.

    So it all comes down to money. Nowhere is it mentioned that the result was a vastly better product, with a quality of design and manufacture that GM could not even dream of. No matter that had there been enough marketing budget to tell the story properly, the media and public would have figured this out on their own. No, all GM could see was that Saab was routinely exceeding the unit manufacturing cost, and could not see envision the benefit because GM had no idea of who buys Saabs. Why? Because they were too fat, lazy and complacent to find out. Their near-death experience was long overdue. Were it not for all the regular working-class jobs that would have been lost, I was all for seeing them go under. Their upper management is the problem.

    • Very good piece. Sadly, I have to agree with most of what you write. Such a waste….

      One slight mistake imho: the USA wasn’t Saab’s biggest market, Sweden (and the rest of Scandinavia) was. I believe no. 2 was actually the UK. North-America came third. In terms of continents, Europe was a much bigger market for Saab than the USA. But that doesn’t really change anything in your appraisal.

      Ivo

    • Very nicely written, but I’ll squabble with some of it anyway, just for the hell of it:
      1) GM might have been “conservative” at one time. They ain’t anymore. If you’re right, then they are conservative and backward thinking—but doing a horrible job of TRYING to be progressive, worldly and forward thinking. I’d see someone/or a company for who they really are—not for who they want us to THINK they are. Come to think of it—-you might be right. The Volt seems especially forced—not something GM’s bean counters would ever want, but something they feel they must produce to “look good.”
      2) James Cain is fair game. I’m not being critical of him for what he is saying because as you point out—-his job is to dessiminate information he is told to. My critique is that he is really lousy at it. This is about the third time he’s given this information in what I consider to be an abrasive and clumsy way. I thought former White House spokesman Robert Gibbs was out of his league too—just not up to the job—but far better than this guy. That’s just my opinion.
      Other than that, I think you’re really on target with your comments about Saab’s lack of marketing and “missed” marketing in the U.S. It was pitiful. Was it as lacking as Peugeot’s for example? No. But “Born From Jets” probably didn’t sell a single car. It didn’t bring one new person into a Saab showroom in my opinion. It might have barely reinforced the brand to people already predisposed to buying a Saab—-but was invisible to everyone else. The ads missed by so much, it’s laughable. I truly believe I could spend a weekend with a camera, a computer and a couple friends—-and come up with a marketing/advertising image and full campaign for Saab—-ideas for TV spots, print ads and outdoor advertising panels—-that would play 1000% better than “Born From Jets” ever did. Pathetic.

    • Forgot to add my little fantasy marketing line for the new Saab Cars:

      Lose “Born from jets”

      Instead:

      Saab: You could drive something else. . but what is the point?

  14. I’m thinking of writing two books, titled:
    “Raising Cain” (One woman’s saga in the child rearing years of GM’s bright and bubbly spokesman) and
    “A GUY named LOFALK” (Taking a wrecking ball to a proud and historic car company).

    Think I’ll make the NY Times Best Sellers List?

  15. Everyone talks about GM making crap. Maybe it’s because the founder of General Motors Co. (later Corp.) was William Crapo Durant. And yes, that’s really his middle name. I don’t know how it’s pronounced, but you know how I pronounce it. :-)

  16. GM has wanted to close Saab down for at least two years, hoping for them to do anything else is just ridiculous. they still have a right of veto over any new owner which they will employ no matter what credentials they have. GM are working in direct opposition to the administrators.

    • Again, I doubt they bought Saab with the intention of closing them down. At the time, Cadillac was only slightly less of a joke than it is now. As far as I can tell, in Europe, it is still no less a joke than it ever was.

      I think they bought Saab because they thought they could pick up a Volvo-Audi-BMW-killer on the cheap and use their supposed economy of scale to produce, for $10,000 a fancy badge car that they could sell for $50,000. They thought that size and purchasing power and price could outweigh the appeal of superior engineering, since in their USA-centric view, the average car-buyer either doesn’t care or can’t tell the difference between adequate engineering and quality engineering. They seriously underestimated the intelligence and sophistication of Saab drivers (probably because they never made the effort to talk to any of us).

      So they thought they could just trade on the name, cheapen the cars and no one would be the wiser. Over here we all knew GM would do just what they did to Saab. Many of us went out and bought up the last of the old 900′s so that we would have proper Saabs as long as we could. Unfortunately the “new 900″ met our expectations . . in the saddest way. It is a miracle and a tribute to the design and engineering team that the og 9-5 retained as much Saabness as it did.

      Eventually, people here figured out what was happening, and the flight to Audi and BMW started. By the time the og 9-5 evolved enough to become really nice car, it had aged too much. BMW introduced 2 or 3 genereations of 3 and 5 series while all Saab could do was dress up the 9-5 more. The new 9-3 was lovely, but too late and suffered from the reputation of the “new 900″ Saab never made the numbers, so GM decided (probably a good 5 years ago now, I would guess) to pull the plug.

      But i don’t think this story played out the way GM had hoped.

      Saab: You could drive something else . . . but what is the point?

  17. I dedicate this next song to everyone’s favorite spokesman, Mr. James Cain!
    http://www.youtube.com/watch?v=4WdSSy7hBYk

  18. You’ve got to laugh at the sheer hypocracy of a guy who works for a company that wouldnt even be in existence if it werennt for the US Government. BAIC will own GM in five years time then maybe we can see how smug Can will be then.

  19. James Cain’s attitude and comments make me sick & am absolutely livid!!!!! GM have mismanaged Saab, treating them like an unwanted stepchild. They seem hellbent on destroying the company, the livelihoods of Saab employees, including my partner, friends and dealerships. Saab builds far superior cars to GM – I’m praying that Saab will be saved and will start to build their beautiful cars again.

  20. It is really difficult to understand the kind of game GM is playing here. I very much resembles an angry child crying ‘if we weren’t able to do it, nobody should’. It might be that GM is feeling quite strong now and that they did let go SAAB only because back then they were afraid to justify before the US government. I can imagine that GM will soon be in bad need for all the money they are rejecting now. We’ll see.

  21. James Cain is the new Bob Lutz!

  22. Does he have anything to say about: “General Motors is temporarily halting production of the Chevrolet Volt due to slack sales.” (CNN online)?

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