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till72 on Brightwell pulling out

February 28, 2012 in News

As Jörgen already posted earlier, Zamier Ahmed of Brightwell told di.se that they pulled out of the bidding process for Saab because they did not get as far as they wanted in the negotiations. Here’s an intresting bit:

It is the attempt to reach an agreement on the critical technology licenses, which GM owns the rights to, and production of 9-4X, which did not lead to any concrete results, according Zamier Ahmed.

When it comes to technology licenses, said GM will not say no, according Zamier Ahmed, but gave “unsatisfactory answer.”

What answer would you have wanted from GM?
“It is very simple. We would like to have the answer that they want to cooperate.”

Zamier Ahmed has previously declared that he has had discussions with GM, and that the signals are positive. According to him, he has been in contact with members of GM’s top management, which he also met in Detroit.

It was hoped to present a favorable response from GM on Thursday, along with the bid for Saab.

As you can surely imagine, there is no news from me without some additional words. So here we go.

First I don’t see a reason to believe that Brightwell did not talk to GM. Sure, our friend James Cain did state that there were no negotiations with any party about Saab. But this is the official company talk he has to obey. There are so many things going on behind closed doors he is not aware of as it simply is considered secret so he won’t get to know it until there is something to state in public.

Second I can imagine how frustrated Zamier is after they put a lot of effort in this and they did not reach their goal. Still, he stated that they did not give a satisfactory answer. Ne did not say that GM did say “no” generally. Of course GM know that there is a certain timeframe for Brightwell. They needed a postitive answer now but it seemed like they got none at all. Which brings me to my

third point. From all the dots we have collected and connected up to now it may well be that GM has found another party they’d rather see in this. If we tend to believe that Brightwell was really in talks with GM (which I do) this may explain why they changed their mind on the last meters. We got some indications that there was one party jouning the process quite recently. I’ll leave it to that as saying more would be a bit too bold in the current state of things.

So stay as sane as possible and don’t start senseless rude attacks towards GM. They won’t help but they may still hurt things. This is not over yet. Not at all.

78 responses to till72 on Brightwell pulling out

  1. Just a general comment, I want to thank you guys for keeping us updated on all of this. It’s been real workout. Just trying to keep an open mind and hope for the best outcome for this beloved brand that deserves a fully realized future.

  2. Some bidders need to get over GM already. Either they can move ahead on their own or they can’t. GM would be nice to have, but don’t count on it. New 9-5 and 9-4x licensing reminds me of a song from back in the 90s. Time for a break-down. Never gonna get it never gonna get it. Never gonna get it never gonna get it. Never gonna get it never gonna get it. :)

  3. Brightwell was the least feasible suitor anyway. Not an automaker, don’t have the deepest pockets or an emerging car market to capitalize upon. I think the appeal was that they would do the least to change SAAB. No surprise GM is not cooperating. Not a lot in it for them. Low volume in sale of licenses and they would just be keeping alive an embarrassment long enough to develop an independent product line.

    If you really want SAAB to screw GM, I would be rooting for YM. Unlike Ford, GM (Buick) is huge in China. A Chinese owned SAAB could cut into that market. Volvo has already made in roads. I think the only reason for GM to license to Brightwell would be to keep SAAB from YM. So, maybe GM indifference to Brightwell is a sign that YM is not the likely winner.

  4. Thank you once agin till72 for a level headed response.

  5. As always Till make such good writings :D

    And he is right, it’s NOT over at all because of the Brightwell that rejected!

    Never ever give up folks!

  6. Thank you for putting what I had thought, tonight, more succinctly than I could have.

    Totally agree with your conclusions.

  7. Is there somehow we can stop everyone posting Saab things on GM:s Facebook page and focus on Saab survival instead??

  8. This is so frustrating. It would be beneficial for the administrators to speak directly to GM is this case as do agree with you Till, it appears GM accept the fact that Saab will be sold and they have a preference for the new buyer. Let’s just cut out all this shit and get something done then – GM, Administrators and the preferred bidder get talking and start building Saabs again in Trollhattan!

  9. I’m sure GM are smart enough to know that they’ll get a better deal if license fees are negotiated entirely on their terms, which may only be (in their eyes) AFTER someone has already had a bid for Saab accepted.

    Too bad Brightwell, I certainly wasn’t convinced but it’s a shame to see anyone pulling out before the final decision. BMW, you have my vote.

  10. The buyer that wants to buy Saab and keep it alive has got my vote!

  11. Hey look: GM is looking to buy a stake in Peugeot…..what is the over/under in that working out?

    http://www.reuters.com/article/2012/02/27/us-peugeot-gm-idUSTRE81Q1XO20120227

    • The PSA Group (Peugeot/Citroen) with a gross profit of 1.1 Billion Euros last year are not going to do anything stupid now are they? they are looking at selling only 5% of Peugeot to GM. This may be a stategic way to sell their two brands into the USA? Americans would be more annoyed at where GM are getting the money from? (or is it from SAAB licensing to the new buyer??…….interesting)

    • Nice, they can spend 240 million USD on a “symbolic” stake in PSA, but can’t pony up a few dollars to cover our 2010-11 warranties on cars from a brand that they are hell bent on killing off for good. Real nice…real nice.

      • Hey, think about it this way – if everything was going to be great at Saab, your dealer would have charged you MSRP. When I paid a discounted price for my Saab back in 2008, I knew what the risks were and what I was getting into. The writing has been on the wall for a while, well before GM sold. It’s not GM’s fault that Spyker could not turn things around. Why would they cover warranties for cars built by someone else?

        • DMR: It would be a good will gesture to cover the relatively few cars built at Spyker, with GM technology, during the Muller era. You’re right—-they don’t need to do that. Also, they aren’t big on good will at GM. Very clearly, GM isn’t familiar with good will.

      • They are not a company that values customers—-past, present or future. Clearly, they don’t get it. I urge Americans to look to Ford, Chrysler—-or for that matter Honda or Toyota to replace their GMs. I replaced a Buick station wagon with a Kia van recently. I feel great about it.

    • PSA has some Diesel engines in difference size and they do consulting services. Maybe there’s a reason to drop/ end the FIAT diesel deal?

  12. I don’t think posting our outrage on Facebook will have any impact at all on GM’s childish behavior—-won’t hurt and won’t help. But I think it’s healthy for our community to let their community know how we feel and that if GM behaves this way toward every potential buyer, there will be a price to pay in sales and image. I don’t see anything wrong with that. As far as Brightwell goes—-they were last on my list. But I’m very concerned about how short this list is becoming.

  13. Maybe Brightwell is getting soft so had to pull out! :P
    But GM will remain hard on its position and keeping pounding….ouch…:P
    Sorry for the sexist remarks.

    Some bids will be better than others. Seems like the weaker ones are dropping out.

  14. GM may have viewed BH as not able to “walk the talk” so better to sign a license deal with an organisation who can pay in cold hard cash… if the germans are on the case it is highly likely they have political allies promoting their case in Washington.

  15. Again, for perhaps the 37th time: Why is it a surprise when GM says “no” to a company that offers to buy Saab and also wants GM tech thrown in? From Day 1, GM has consistently turned down any offers to buy its tech, maintaining the stance that Saab is a distinct and separate entity from the tech it licenses from other sources.

    Why are people so baffled by GM doing exactly what it said it would do?

    • Because its all smoke and mirrors on GM’s behalf.

    • Well, GM did it once with Spyker, and might have done it with Koenigsegg or other bidders in the first round. Plus it seems from the news article as if there were discussions with Brightwell over a period of time which were seemingly progressing, not flat out unproductive. That’s why Brightwell is so upset with GM’s behavior: if you’re going to say no, just say no and be done with it. Much time and energy was wasted because GM was not clarifying its position.

      Logically these facts imply GM might have been wiling to license to Brightwell under different circumstances – and what those circumstances are only GM knows, but if Brightwell was the only realistic alternative to Youngman I’d bet real money GM would’ve granted them a license.

      • Greg, that’s a fair point…but GM’s deal with Spyker was financed 25 percent in cash and 75 percent of the sale price in stock of the new company. It had a large stake and it retained control of the IP. GM has none of those incentives with Brightwell, YM or any of the other minor bidders.

        The failed negotiations have all taken the same path, with the hitch always being the final disposition of the current GM technology — which GM consistently refuses to sell at fire-sale prices. I don’t know how much clearer GM could have been, as they’ve turned down at least two or three other serious bids for the same reason. Saab is a separate entity from the GM tech that it licenses, and anyone who wants to buy the company is likely aware of that.

        • Good writing. I wish we all knew what has been going on at GM and anyone got to a concluding talk with GM. Seemed the deadline for bids was yesterday. So anyone restarting Saab as we know, it would likely have had a deal concluded by then.

          Otherwise it seems the only party willing to restart Saab is Youngman.

        • Mike, thanks for your perspective. I agree with you 100%. I think GM, however lamentable, are well within their rights to do what they’re doing.

          I think there are other “sacred cow” assumptions here worth challenging:
          1 – The idea GM clearly makes money on licensing the Saab IP: This may not actually be true. Looking at the costs of staff as advisors and the potential to make even more money with other scenarios (like making more SRX’s in the Mexico factory rather than 9-4x’s) I don’t think it’s 100% clear this is a financial winner for GM and, even if it is, it’s likely a tiny value.

          2) GM is afraid of a Saab competitor: Unlikely. More likely, as Greg pointed out, that they just don’t care and this is an annoyance.

    • Thanks Mike for yet another rational post. This notion that GM is obligated to license their technology just doesn’t make sense. Its their technology, and if they believe its in their best interests not to license it, so be it. That does not make them greedy corporate bastards like some suggest.

      • And what GM do you have in your driveway Ben?
        People like to vent, plain and simple.

        • If you must know I have 1991 900SE Convert in Monte Carlo Yellow – 50k miles and not a scratch on it. However, just because I am fortunate enough to have that beautiful car does not mean I view the world through ice block tinted glasses.

          Nonetheless David, you are correct – people do like to vent and this is an excellent forum for that. I feel as if I am also venting, just from a slightly different perspective.

      • - However, what most people suggests here is that Ford made another conclusion, although they got a couple millions for letting go of Volvo. And from that perspective, I would conclude that there is a fair bit of shortsightedness in such a decision.. Some call it greedyness, other a disfunctional corporate GM culture which missmanaged the company to such a degree that it almost turned into the biggest bankcruptcy of all time…

  16. I just wrote detailed letters to my Congressman and my two Senators. GM needs to be called in. This is getting out of control now. They owe me and other American taxpayers 20 billion dollars and they’re walking away from being paid for licensing on these Saabs—-it smells real bad.

    • If I were American I would be doing the same.

      • Good luck with that. I did, just after bankruptcy, and received the following reply three days ago. At least one of my representatives have staff that can email a form letter…

        Thank you for contacting me to share your views about General Motors.

        Given the complexities and range of issues our nation faces, it is always helpful to be able to draw on the ideas, perspectives, and passions of Oregonians. I appreciate your input and will certainly keep your thoughts in mind as I work to address the challenges of our state and our country. Please keep in touch.

        Sincerely,

        Jeffrey A. Merkley
        United States Senator

        • You know what makes me the angriest of all? It’s not the potential money they’re turning away by letting Saab milk that last little bit of 10 year old IP (which frankly is ridiculous), it’s the money they blatantly wasted on negotiations with these people rather than saying no to them. How many plane trips, overnight stays, meals, hours/weeks of wages were wasted on these negotiations when they knew the answer? They have time to waste money like that, they give out 7k bonuses, why not try some good old fashioned work.

          • The new 9-4 (which Brightwell wanted badly) isn;t 10 years old. The new 9-5 (which Youngman coveted) isn’t 10 years old. The current 9-3SS is an old platform, true, but it’s a GM platform.

            And GM isn’t “wasting money” in protecting its IP; it’s wisely refusing to give it away….

            • I’m pretty sure you failed to read that properly as I said GM wasted a considerable amount of money leading Brightwell Holdings on when they could have straight up said “no we won’t license to you”. The plan on their end all along was to deny them, which means the charade was indeed wasteful. Also as far as IP is concerned I’m talking about the 9-3ss, not the 9-5 or 9-4.

            • Saab helped develop those platforms. GM consistently forced Saab to use GM’s platforms and parts, often with not so good result (poor quality/higher cost).

              GM then, in 2009, consistently picked the underdogs among those that bid for Saab.

              Then, in December 2011 they pulled the licenses because YM had agreed to lend Saab money (in return for an option to buy Saab once Saab no longer used GM tech).

              I say GM has a moral obligation to right wrongs here.

              • re: moral obligation…..When you work for a company, any IP you produce as an employee is typically owned by that company. GM owes Saab nothing.

                GM will act in its best interest, and if that means recouping some of the sale price via a licensing deal that props up Saab for the near future, then it will do that instead of writing off the loss…

                • Again mike… GM entered into an agreement with Spyker, giving them access to the licenses in question. In Dec 2011 when Saab had reached an agreement with Youngman to borrow money, GM pulled those licenses.

                  It would surprise me greatly if Saab/Spyker’s contract with GM was such that GM could simply pull those licenses away at the drop of a hat. Unfortunately, as we all know, Saab was in no shape to take this to the court. GM obviously knew this as well — hence they pulled the licenses.

                  • Rune, GM retains the option to prevent its tech from falling into the hands of a foreign company operating where IP protections are a laughable joke. It’s a smart move. Period.

                    • Borrowing money from a foreign entity, no matter who, is not the same as transferring technology. Period.

                      GM breached the contract, clear and simple. Yes, that was probably a smart move in case GM’s primary goal was to bury Saab.

                      I can only repeat what I have already written several times now. It would be a very special contract that prevents the new owner from borrowing money. Unprecedented I’d say — and clearly set up to increase the chance of failure. There is no way GM looks good in this situation.

            • Mike: Who said anything about “giving” it away? They’d be selling it. And they owe ME and other taxpayers 20 billion dollars.

        • Jeffrey should not even had to put his title under his name; the language itself shows what business he is in :)

    • Angelo, that’s probably the most irrational post I’ve seen.

      Why would the US government advocate GM selling its intellectual property for pennies on the dollar and potentially losing market share — albeit a small share — of its own brands? If you actually think about it, you’d see that GM’s position is the right one for GM, regardless of what it means for Saab. As a taxpayer, that’s the proper stance for GM to take. As a Saab lover, it sucks.

      • Mikey: GM owes the U.S Treasury 20 billion dollars. They need to begin paying that back, NOW. They can make some money on licensing this technology. Further, do you realize that they are creating more unemployment in the U.S. by how they are handling this? Saab dealerships are terminating finance departments, salespeople, greeters and even some techs and parts employees due to not having cars to sell and seeing no future. Your defense of GM is irrational. I’m not.

        • Angelo, the Saab unemployment argument is pretty weak — unless, of course, you work for a Saab-only dealership. Saab USA and the associated Saab-only dealers might employ 1,000-1,500 people. The GM/Chrysler bailout directly saved 800,000 jobs, and estimates of indirect jobs (suppliers, finance, ad agencies, etc.) hovered at 1.5 million jobs. No contest, friend.

          And yes, the US (not the treasury) is likely not going to recoup all of the $20 billion outstanding, mainly because the government unloaded about half of its shares of GM early because it listened to folks like yourself instead of holding them to wait for the instability of the EU to pass.

          • Great Mike, tell the people laid off by the Saab only dealers, and their familes, that this is a good thing. Also, the multi-line dealers that sell Saab often have Saab specialists in Sales and for repairs—-consider them too. Check your history too about the price of GM stock since it was re-issued. I have no clue what you’re talking about.

          • Why do you assume it’s one or the other? Jobs can be saved all around. Sacraficing the people who work for Saab in the U.S. doesn’t help the jobs saved by bailing out GM—-one isn’t impacted by the other. Finding GM fans here is fascinating stuff—-simliar to finding Saab apologists/haters.

      • Intellectual property for the 9-3, for pennies on the dollar? Can you explain that one? What will they be doing with that technology?

        • Angelo, all of the previous deals have fallen at the same point: when the potential buyers try to deal with GM for the tech that Saab licenses from GM. Brightwell wanted the 9-4. YM wanted the 9-5 and 9-3SS.

          Without those licenses, Saab is a factory and people who work in it, and a relatively untested platform that was designed to use GM tech, but can be adapted to use other powertrains and suspension components. That’s it. Any new car would be 18 months down the road, and there would be no immediate revenue to keep the brand afloat.

          • Mike: My point is that “pennies on the dollar” for 9-3 technology is very misleading. What is GM doing with the 9-3 technology now? I remember reading that Youngman was ready to move ahead without the 9-4 and 9-5—-just using the 9-3 and my point is that I don’t understand what interests GM is protecting by denying 9-3 to a new owner—-other than simply wanting Saab out of business. Again, are you going to tell me, with a straight face, that GM is concerned that Youngman with the 9-3 can actually damage their own business in China? If you believe that, I have a bridge to sell to you….

            • If the Phoenix platform is ready to go, then it should be a snap for a prospective owner to use it as the underpinning of the new 9-3….right? Right?

              Well, no….because YM wanted to use existing platforms to build the current 9-3 until the Phoenix was fully developed. That’s the entire issue: companies wanting to use existing GM tech (even older tech) to take back to China. Letting YM do that would have been insanity.

              Think of it this way: If I lease your lawn mower for $10 a week, I can’t sell it to a neighborhood kid for $8.

    • Angelo, my friend – a good chunk of GM’s income relies on sales in China. If they lost China becase some Chinese company built a Chevy killer using the 9-3 (remember the shared platform and parts bin, blah blah blah?), then I’m sure that the gathering mob of unemployed ex-GM folks in the midwest might be a little larger than our group of diehard Saabistas. I would think that your Congressman is smart enough to see that. GM’s position is the reality of things. We can’t really deny what it is. If I were the head of GM, I would sadly have to make the same decisions they are making even if I drive back home in a Saab.

    • Wow, I agree with a lot you say Angelo but not this. I sure don’t want my congressmen wasting time on the Saab sale. GM did it’s part by selling SAAB rather than shutting it down 2 years ago and the company failed. They are being very cautious about who they license this tech to again and I don’t really blame them, Saab sales are so low that the profits to GM are very little, at this rate I’m sure GM spends more money in lawyers trying to deal with Saab then it could make licensing the tech to someone like BW. GM is probably waiting for someone with some real funds and serious benefits to GM to take over the brand, not a little investment group that most likely would fall in bankruptsy again in 2 years

      • Alex: I’m surprised if you believe the last couple sentences of what you wrote. Suddenly, you think GM is being selective so that Saab has a strong future with a company with “real funds.” They settled on Spyker a couple years ago—-and I believe part of their thinking was that Spyker was small, not well funded and not competitive—-a good place to dump Saab and not worry about it. Now, I think they would just like to see this all go away. Time will tell—-I hope you’re right and I hope GM is cooperating with someone like BMW, but I have my doubts. Also, you say Saab sales are so low that the profits to GM would be very little by licensing. Alex, it’s a catch 22. Without GM’s cooperation, Saab sales are going to be low until and if some new buyer goes to different platforms. With GM’s cooperation, maybe the right company can increase Saab’s sales. They/You can’t have it both ways: Threatened that little Youngman can eat into their Chinese sales but not interested in doing business because not enough cars will be sold. Those are two completely different and opposite arguments, aren’t they?

        • First off, GM 2 years ago was in a completely different situation, they came hat in hand to the American public and to not sell Saab when there were interested parties would have been a PR nightmare. GM today is profitable and they don’t need Saab or the very little money they bring in. The risks of selling to Younman in their mind far outweighs the meager benefits of small profits. If a company like BMW takes over it benefits GM in more than one way, first off with BMW backing Saab sales will be far higher and the GM developed cars may actually pay back plus GM can further develop the alliance thye have been building with BMW. Plus BMW is not a threat to GM the same way the Chinese are, BMW has better tech than GM and doesn’t need to steal intellectual property like GM fears with the Chinese. GM also knows that a company like BMW could probably develop Saab on it’s own without the GM tech and eventually would move away from GM anyway so to get some deal out of it to supply parts could actually be very beneficial in the long run with minimal risk. More than anything with a big company as an owner of Saab the Saab problem is now someone else’s and GM is done with Saab as they clearly want to be.

          • Bingo.

            The part about the risks of selling to Youngman hits the nail on the head.

          • Alex, you “hit the nail on the head” both in terms of Youngman *and* BMW. If BMW actually is bidding for Saab, they would be the ONLY one that has what is called LEVERAGE with GM, which just MIGHT get GM’s attention and perhaps licenses necessary to produce the 9-5 and 9-4X. Why? Because GM *wants* BMW’s cooperation and partnership in fuel cell technology and both gasoline and diesel engines (among other things). GM, at the end of the day, will do only what GM believes to be in THEIR best interest. They would not find it in their best interest to piss off a company like BMW that they wish to have future cooperative projects with.

  17. I can’t believe I’m defending GM but absolutely no one on here knows why GM denied BW, the fact that they even talked to them shows that there maybe hope after all with the right party. To think GM just wasted BW’s time for the hell of it is an incredibly naive and I have to say, stupid, point of view. In the end Saab tech belongs to GM and I don’t blame them for being very cautious about how it’s dispersed. Not to mention the Saab saga has dragged on for years, they aren’t going to make a deal with another poorly funded owner who has no experience running a car company. GM doesn’t want to go through all this again in a year and honestly who can blame them? GM probably talked with BW and then upon deeper investigation and shareholder meetings decided they weren’t a viable party, that’s business. I also think that the assumption that they suddenly cut off talks means that there is another bidder with which GM has struck a deal is incredibly presumptuous as we have no evidence of that.

    • I think a more realistic assumption is that GM talked with BW, did their due diligence, spoke with their investors and decided “no”. They aren’t giving it more discussion because they don’t want to waste anymore time on this, again, that’s business.

  18. Brightwell wasn’t in the position to get the deal. Because of the missing network they had no chance to build a GM IP free plan. And it wasn’t sure for the public if they really had the fundings in place.

  19. I hope for the best regarding possible other parties that might be in talks with GM – but I only rely on parties having plans not including GM…!

  20. From a cynical perspective, GM interests would be best served by having an agreement with the party least likely to succeed?

    … take the royalties now, but not risk future competition.

    It looks increasingly as if any Saab future will be without GM involvement and that means a buyer already in the motor industry with very deep pockets able to carry the business through to new model lines.

  21. One thing is clear, GM is past. All of us know it and we must think in a new concept about the future cars in SAAB with other designs and technology. I knew that GM wouldn’t help to SAAB because they want us dead. We’ll hope to have good news in the future with new Administrador and I wish that they came from Germany.

  22. Also, relating to GM: Let’s suppose for a moment that they are in discussion with Mahindra or BMW—-working behind the scenes to try to come up with a positive solution. Let’s suppose that in a few weeks maybe—-an announcement is made that GM has worked out a plan with one of them—production of the 9-4 and 9-5 will resume, a mutually gratifying agreement has been reached and all is well. You know what? RIGHT HERE, RIGHT NOW, GM should be issuing at the very least, a basic public statement: “Discussions are ongoing with several parties. We cannot comment on further details at this time.” That’s all—-throw a bone to the world—-let dealers know, let fans know, let owners know—-that there is a sliver of possibility that something can be worked out—–IF there is that sliver of possibility. They pay a spokesman a lot of money. SPEAK PLEASE.

  23. It’s kinda silly that Brightwell didn’t had a plan B; a plan without GM. Especially since VM was there “advisor”. They should have known this. And maybe VM did after all, and is there something going on behind the screens even he couldn’t think of……….Let us wait ans see!

  24. If BMW actually are bidding for Saab, they would be the ONLY ones that have what is called LEVERAGE with GM, which just MIGHT get GM’s attention and perhaps GM licenses necessary to produce the 9-5 and 9-4X. Why? Because GM *want* BMW’s cooperation and partnership in fuel cell technology and both gasoline and diesel engines (among other things). GM, at the end of the day, will do only what GM believe to be in THEIR best interest. They would not find it in their best interest to piss off a company like BMW that they wish to have future cooperative projects with… AND (edited) they are surely aware that a company such as BMW could actually replace GM’s IP and components within a much shorter period of time than any other bidder.

  25. Purely for light relief (I need some), someone on this site mentioned that MAN trucks are based in Munich. MAN and Scania trucks are merging. MAN is owned by VAG. Are we sure VW isn’t the bidder for Saab?

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