GMs Troubles Are Just Beginning

Oh General Motors where have you gone? This week has been amusing to watch from the sidelines. When I worked at a GM store we were always the number one manufacturer in the world and there was a lot of pride and about as much arrogance to that. When would would have rally meetings they would always talk about our market share and where we out performed everyone and would point out different areas of concern. I remember one such meeting where the person presenting had expressed anger towards the fact that they saw a Toyota taxi and that it should be a GM. I get being frustrated but to just make a statement and offer no solution made no sense. As we have seen recently, this is GMs MO. Address a problem but do nothing to fix it or the wrong thing to fix it and bring more trouble forward.

Well this week has brought forward a boat load of trouble for GM. Let’s take a look into the week GM may wish to forget but just like everything else in there history, just acknowledging there are these problems will not fix them.

This week started with Spyker and former Saab boss Victor Muller bringing forward a US$3bn lawsuit claiming unlawful actions and driving Saab into bankruptcy. This must have been a great feeling for Victor, as one can remember the bankruptcy press conference where he was quite frank about the bankruptcy being GMs doing and the little hint of a smile when asked if he would pursue them legally. Anyone who wants to have an idea of how prepared Victor is, need read this article with Just Auto where Victor had this to say:

For his part, former Saab CEO, Victor Muller said: “Ever since we were forced to file for Saab’s bankruptcy in December of last year, we have worked relentlessly on the preparation for this lawsuit which seeks to compensate Spyker and Saab for the massive damages we have incurred as a result of GM’s unlawful actions.

“We owe it to our stakeholders and ourselves that justice is done and we will pursue this lawsuit with the same tenacity and perseverance we had when we tirelessly worked to save Saab, until GM destroyed those efforts and deliberately drove Saab Automobile into bankruptcy.”

Simon Warburton seems to be the reporter at Just Auto closest to the Saab case. In another piece by Simon, Victor says he has come back to “haunt” GM. I can just picture his smile as he said those words.

“They thought they could get away with it, they thought Spyker would die and Saab – it was a very understandable thought.

“If Saab could go down, how could a small parent survive? Now we are back to haunt them.”

This is just beautiful and fitting for all the garbage that GM did to stand in the way of a deal with Youngman to buy Saab and even when they had worked a deal that would not change ownership until Saab no longer used GM IP, GM still said no.

GM of coarse says that these claims are baseless to which I have to giggle. Anyone who has any insite in how hard Saab management work to try to structure a deal that would work for GM only to have Mr Cain come out publicly and say that GM would not support it and would stop all agreements would tell you a different story. GM, this is not going away and I’d be checking over my shoulder to see what’s coming next.

Well next may already be coming. Just yesterday there was talk about Youngman the one time prospective buyer of Saab possibly bring forward their own lawsuit against the auto giant. Youngman has not yet decided on legal action but may look on it favourably now with Muller going before them. Sometimes there is the perfect storm or the hit them when they’re down mentality and now would most likely be that time.

Victor Muller was trashed through the media in the last year and he shoulders some of the blame himself, he has stated many times. What is interesting is the people that are talking now and stating that GM needs to take him seriously. Lars Homqvist, the former head of CLEPA Europe’s Automotive Suppliers Body has said that Victor has “more energy than the whole management team at GM put together.” Today has brought forward (Scandinavian Auto Suppliers Association) FKG managing director, Fredrik Sidahl saying the following to Just Auto:

“It does not surprise me at all,” said Sidhal “Whatever [Victor] Muller, Spyker and Saab tried, GM did everything to stop that. Of course he [Muller] is a bit annoyed – I think he is right.

“It is a sad, sad story. I think he has thought this over and turned every stone. He has worked [on] it for the last half year.”

It’s great to see both of these men who represented the suppliers who were the ones that suffered the most through all of this supporting Victor in his attempt at justice. If anyone could have the right to be sour with Victor, it’s them and they see the reasoning in bringing this case forward. Yes a win could help their respective groups, but reading what they’ve said, you can see the underlining frustration with GM and who they feel responsible for Saabs bankruptcy.

Another piece of news today also came out of the conversations with Victor and Simon Warburton at Just Auto where it was asked if Vladimir Antonov was the third party backer who is funding the lawsuit. Spyker is funding this lawsuit on behalf of Saab through a third party as Saab itself is in receivership and is not able to fund a huge lawsuit. This third party almost immediately was speculated to be Antonov or Youngman to which Victor had this to say:

“We have secured the backing of an independent third party,” Muller told just-auto from his home on the island of Majorca. “Is it Antonov? No it is not – Antonov has very, very different fish to fry.

“It is not Youngman – it is [an] independent who has committed to fund the litigation – they work on the base of anonymity.

“Antonov is involved in this matter in no way, shape or form, nowhere to be seen.”

Hope that answers some of the questions some may have. These are problems GM has created for itself and like I said, they are not just going to go away. If GM truly feels they are baseless claims, I would be working very hard to try to prove it. Victor is a lawyer and knows the kind of proof he needs and if he has been preparing for the last six or so months, GM, you are in trouble. As a lawyer, Victor has an upper edge in my mind as he would have prepared well for his team of lawyers and would also know how to help his case and what he needs to prove.

Best case scenario for GM is that this further hurts their name and questions the public about how they are ran as a company, worse case…… I don’t think they want to know because if successful this could open flood gates of dealers, suppliers and many others bringing their own case forward. GM, you need to understand that you have a very big problem here and to wish it away will not fix it for you.

 

davidgmills
Member
4 years 1 month ago
A third party funding or investing in a lawsuit is called champerty. In many places it is downright illegal. Courts frown very much on third parties “egging on” litigation. If GM gets wind of this, they may start bringing up this matter and see that any third party financing of the litigation stops. One exception to the rule against champerty is when a third party wants to “buy” the cause of action, or “buy” part of the cause of action, and that is legally acceptable and maybe that is what the third party has done. The other exception to this… Read more »
Harriet
Member
4 years 1 month ago

you are on target – there may be criminal charges for violation of anti-trust laws as well, which would be even better

davidgmills
Member
4 years 1 month ago

If the government won’t go after the banksters for their criminal activity, I doubt seriously the government would go after GM.

Angelo V.
Member
4 years 1 month ago

Congress is more guilty of these reckless activities than the “banksters.”

davidgmills
Member
4 years 1 month ago

The banksters own the Congress.

Jake
Member
4 years 1 month ago

Either way, Victor’s first profession is being a lawyer, so I sure hope he knows what he’s doing… I still have faith in Victor!

kochje
Member
4 years 1 month ago

Agree and hope that he succeeds.

tombalas
Member
4 years 1 month ago
3 billion is a rounding error for GM – Detroit isn’t losing any sleep over this. One this is for certain – GM’s lawyers will make sure the litigation is very expensive for both sides. GM may not have the greatest car designers, but they have always had the best lawyers – and litigating against GM has always been a plaintiff lawyer’s worst nightmare. And don’t forget they have the home field advantage – the suit was brought in Federal Court in Detroit! As if an American jury – made up of Detroit residents – will give a judgment to… Read more »
MeanSabean
Member
4 years 1 month ago

Ya sure “GM have always had the best lawyers” these lawyers that you claim they have tombalas really helped them in the FIAT mess years ago!!!! Ha what a joke. I hope GM pay big time just like they did in the FIAT mess!

Angelo V.
Member
4 years 1 month ago

Where are you getting your information about how great GM’s lawyers are? I waxed nostalgic a couple threads back about how my friend’s father represented himself and successfully sued GM in court over the premature failure of his Oldsmobile diesel engine. He won. The lawyer they sent from Michigan to Pennsylvania was a rookie. Of course, it was a nusiance suit to GM—-it was far LESS than a rounding error—-but still, their executives are utterly awful—-aren’t they the ones who hire the legal team?

Belfast_Saab
Member
4 years 1 month ago

Great write-up Jason, taste the relish!

Chicago Fred
Member
4 years 1 month ago
A Saab suit is just a minor irritation for GM. But bravo to VM! Any irritation for GM–no matter how minor–is a total pleasure. They killed Saab–even though it could have been viable–and perhaps acted in an illegal manner. I hope the chickens are coming home to roost. GM has always been nothing if not totally arrogant. And I love it when arrogant people or entities get knocked down a peg or two. I am not under any allusion that a Saab suit will mean a whole lot to GM. But, they have to defend their actions in a court.… Read more »
74StingSaab
Member
4 years 1 month ago

successful or not, it gives us something to cheer for!

NorthOfAtlanta
Member
4 years 1 month ago

There is one more thing I haven’t seen mentioned, VM’s great timing on this politically. The present administration is on the edge of being a one term administration and really doesn’t need Government Motors brought back up in a bad light. After all it was the new GM, the one they created, that shot down SAABs chance at a Chinese white knight so to speak. I’d bet money on it being used by the Romney campaign if it gains any legs at all in the press.

davidgmills
Member
4 years 1 month ago

Come on. Obama is looking like he will win the electoral college in a landslide. he’s far ahead in most of the swing states.

Angelo V.
Member
4 years 1 month ago

I’d be very surprised if the President wins re-election in a landside. I’ll be mildly surprised if he wins at all. Who’s polls are you looking at, MSNBC? Didn’t they have the Wisconsin Governor Recall Race a “dead heat, too close to call” up until the polls closed? What happened there? Ed Shultz “Put on a pot of coffee, it’s going to be a LATE NIGHT FOLKS!” 20 minutes later, before the coffee was brewed, it was called—-about a 7 point win for walker.

davidgmills
Member
4 years 1 month ago

Intrade has Obama at 59%. I said Obama would win the electoral college in a landslide. You can win the electoral college in a landslide and still have a very close vote. You could win every state by just one vote and have an electoral college victory of 538-0.

Romney has to win nearly every swing state ( a dozen or so ) to win the election. Obama only has to win a couple and according to the polls he is up by 3-5 in nearly every one. Hence Intrade’s 59%.

Angelo V.
Member
4 years 1 month ago

I guess we’ll know for sure in November. I question the accuracy of the polls based on previous history—-another example being Al Gore or John Kerry being ahead of Bush. It’s like they want to influence the outcome by reporting the results they desire—–again, Scott Walker is an example. You are right though, that the strategy of “battleground” states makes the winner. 59% seems very high though—-he would be winning a bigger majority than he did 4 years ago—-which almost seems impossible given our state of affairs.

davidgmills
Member
4 years 1 month ago
Its not just the polls. Far more troubling are the exit polls. Exit polls are supposed to be the gold standard for verifying elections — and they were until we started having computerized voting. It is amazing how accurate exit polls seem to be when we vote on paper anywhere in this country and we have a auditable paper trail; yet, as soon as we vote on computers and have no paper trail to audit the system, we always seem to have a “red shift” of about three points. Unless it is someone like Ron Paul. Then the shift mysteriously… Read more »
Angelo V.
Member
4 years 1 month ago
I hate casting a vote that is not on paper—-i.e., ballotless, computerized voting. I don’t trust it. I’d rather hard copies that can be recounted, than some sort of computerized system. Also, sometimes the rules themselves hurt a candidate, as in Virginia—-where only Romney and Ron Paul ended up on the ballot in the primary—-no one else, even though Gingrich was in the thick of the race, as was Santorum. The thing that helped Romney and to a lesser extent Paul, was the fact that they were in the 2008 campaign and had organization that could get signatures all over… Read more »
Jake
Member
4 years 1 month ago

I don’t want to see Romney anywhere near the White House, but I never wanted the big 3 bailed out, either. I was actually more opposed to Chrysler being bailed out (I saw them as completely worthless and not savable) but now with Chrysler having their act together (thanks to Fiat) and Ford having their act together (thanks to Mullaly), GM is the odd one out, and the one that should have gone, if you ask me. Bailing out GM is one policy I won’t agree with Obama on.

Jake
Member
4 years 1 month ago

But then again, this isn’t a site for politics. I’ll be quiet now 😀

Angelo V.
Member
4 years 1 month ago

It’s very hard to separate the car industry from politics. At one point, in the USA at least, one had little to do with the other. Lately, the government OWNS part of the industry. I’ll leave it at that. Since this is a Saab site—-we should be discussing how it relates to Saab. I don’t suppose the 3 billion is going to help us get the 9-4 and 9-5 back…but maybe we’ll get a miracle of some sort! We can dream.

Troels, Denmark
Member
4 years 1 month ago

+

Brad
Member
4 years 1 month ago

a 1 term administration? please noone is going to put Romney in the whitehouse

74StingSaab
Member
4 years 1 month ago

We’re certainly going to work hard at doing just that.

Angelo V.
Member
4 years 1 month ago

If ACORN managed their tricks to get one party elected….one never knows who might step up to help the other party. Hopefully, election fraud cuts both ways. We shall see.

74StingSaab
Member
4 years 1 month ago

+1

davidgmills
Member
4 years 1 month ago

Try Diebold and ESS. Then you know who is putting who in office.

davidgmills
Member
4 years 1 month ago

I posted a video link on election hacking but it is awaiting moderation. If you want to see the video go to Youtube and in the search engine type in Hacking Democracy — The Hursti Hack.

The only way the hack could be caught is because this was done on an optiscan which has a paper trail. No paper trail (most voting systems don’t have one) there would have been no way to know the computer was hacked.

NorthOfAtlanta
Member
4 years 1 month ago

I still think VMs timing is great, check this out.

http://www.politico.com/politico44/2012/08/obama-lets-repeat-auto-rescue-with-every-manufacturing-131566.html

He doesn’t need this lawsuit against a company that he is trying to convince us that is a good thing he did.

guy davidson
Member
4 years 1 month ago

Nobama please

Brad
Member
4 years 1 month ago

obama 2012

Chris Hansel
Member
4 years 1 month ago

+1

Nate 9-3
Member
4 years 1 month ago

I see the three of you are all on team purple. Great team spirit.

Angelo V.
Member
4 years 1 month ago
Actually, on an “International” site like this, I think President Obama can gain some traction. It appears his ambition is to end American exceptionalism—-divert billions of dollars (trillions?) out of the U.S. so that “The world is equal.” It was the dream of his father after all. He’s even dabbling in cars, what with buying GM and all. Funny—-it’s a well known fact (look it up) that Mohammar Ghadafi was a car lover. He even designed cars—-he wanted to come up with one that would be sort of the Libyan version of the Volkswagen Beetle—-a modern take on a “Peoples’… Read more »
74StingSaab
Member
4 years 1 month ago

UGH, no one comes here to argue US politics, its crappy enough we have to see it all over TV and the papers.

Baver
Member
4 years 1 month ago

+1

maturbo951
Member
4 years 1 month ago

GO OBAMA, Rombutt cant even get or show his correct taxes. How do you expect him to run a country? He will run the US as GM ran it …into the ground.

guy davidson
Member
4 years 1 month ago

or OBwan.. as in Star Wars..

saaburban
Member
4 years 1 month ago
Wonder what NEV Sweden, thinks about this, when they are about to finalize the purchase of Saab. I could imagine they are pissed off with BAIC running around with Saabs ex battery partner Boston Power boosting that they gonna use Saab technology and kowhow to make an electrified china made 9-5. And finally, does Saab Aerospace really appreciate that the Saab brand once again will be mention for the wrong reasons. So what happen if Spyker wins or settles, will it benefit Saab in any way, or will it just make some individuals filthy rich? Another question is: does spyker… Read more »
Peter, Sweden
Member
4 years 1 month ago

The better question is why NEVS didn’t approach Boston Power before BAIC did? That I can’t understand… So if NEVS are sitting around and being pissed at the moment, I guess they only have themselves to blame.

Bernard
Member
4 years 1 month ago

I thought that NEVS had their own (unspecified, Japanese) battery partner.

adde
Member
4 years 1 month ago

BIAC’s first e-car has already left assembling line, actually in monday. Batteries are from Boston-Power. BIAC aims to build couple of hundreds e-car to start with, and go up to couple of thousands in 2014. They are already riding this wave, while NEVS recruting ppl, hasn’t yet bought assets etc, etc.
Same old story like with Saab – always late with products on market.
If NEVS doesnt obtain Saab-name, they will be just another brand among others when they start to deliver their cars….any year from now.

spacy
Guest
4 years 1 month ago

Just keep remembering NEVs have not paid yet!!

saabserb
Member
4 years 1 month ago
@Jason: You can call this that happens anything but please don’t use “GMs Troubles Are Just Beginning”. Does anyone here think that GM is in any real trouble because of Spyker/SAAB suing them? Come on, get serious. Articles like this damage SAAB community and make this site look like a sect of lunatics. I said it before, I am saying it now: I would love to see GM counting money because they lost the case. But I suspect that there will be no spectacular events around this. Either it will be a settlement, with significantly lower amount of money, of… Read more »
TonymacUK
Member
4 years 1 month ago

How about this for a flight of fancy? GM settle out of court, VM makes an offer to NEVS, who, realising they have made a grave error of judgement, accept. VM then sells to Youngman, who start producing 9-3s while rapidly developing the Phoenix.

Piet-Hein S.
Member
4 years 1 month ago

…AND the 2012/13 9-5 Sportscombi/Sportstourer. and while we’re still daydreaming: a 9-5 (Turbo)X?

74StingSaab
Member
4 years 1 month ago

dream big or not at all. Id love to see this as well!

Angelo V.
Member
4 years 1 month ago

I can have pleasant dreams about this tonight, but unfortunately, I’ll wake up to the reality that it won’t happen.

Belfast_Saab
Member
4 years 1 month ago

I had the same dream Tony……

Aerobic
Member
4 years 1 month ago
None of this will affect NEVS they have nothing to do with the Saab name. They just bought the buildings in Trollhattan along with some designs on paper. This is just a bunch of executives trying to save face. And the suppliers are all for it, of course. It’s the only chance they have of getting any money back. Just opportunistic hangers on. At the end of this, the only outcome will be that some money passes from some people who can afford it, to some lawyers who don’t need it. The whole litigation is irrelevant to Saab owners. Nothing… Read more »
Angelo V.
Member
4 years 1 month ago

I wouldn’t call it “opportunistic” for a company to try to get back what is owed to them, nor would I refer to them as “hangers on.” Of course, in reality, you’re right—-it’s just that it sort of paints THEM as the bad guys when THEY were the ones who were wronged.

Aerobic
Member
4 years 1 month ago

I suppose that I felt they were very short sighted when they stopped supplying parts due to non-payment. OK, they were not getting money they were due, but how much did they lose when Saab went under? Probably more.

The opportunistic reference was to the fact that they are hoping to get money for themselves without risking any legal costs themselves.

Angelo V.
Member
4 years 1 month ago
Fair point. I just wonder—-if they extended more credit, paid their employees for more labor, invested more in the raw materials, provided Saab with more parts—-would they have actually stood to get back the money that was due, any of it? Or, would they just be prolonging the inevitable and losing more money while doing it? Were they smart to cut their losses before more bleeding? We’ll never know. But at some point, suppliers have to decide when enough is enough, or they go into debt and THEY owe someone, with no prayer of being paid back.
spacy
Guest
4 years 1 month ago

Posted this in the wrong place above:

I, Just keep remembering NEVs have not paid yet!!

TonymacUK
Member
4 years 1 month ago

Me too!

davidgmills
Member
4 years 1 month ago

I wonder if Saab AB is a proper party. It seems to me that since Saab AB was in bankruptcy, the proper party would be the administrator who is administrating on behalf of the Saab bankruptcy estate. At least the administrator would have to consent to Saab suing and it would be the administrator that should get the proceeds of any judgement or settlement in favor of Saab AB to pay off Saab creditors (including the Swedish government). Since Spyker was not part of the bankruptcy, it has a right to sue for its own losses.

rune
Member
4 years 1 month ago

(You mean “Saab Automobile AB”. The military and aviation company “SAAB AB” are still live and kicking)

I do not follow. The original press release mentions what role the receivers have in this? Did you miss that part, or are you discussing something different?

davidgmills
Member
4 years 1 month ago
Sorry not Saab AB. Saab Automobile AB is one of the two plaintiffs in the lawsuit. It is in bankruptcy. A trustee or an administrator in bankruptcy has the right to bring a lawsuit on behalf of the bankrupt estate to recover income due the estate. That income then goes to the creditors of the bankrupt estate. For example, many times in personal injury cases I have represented someone, who because he could not work due to an injury, had to file bankruptcy after I filed a personal injury case. When that happens, I then have to get permission from… Read more »
spacy
Guest
4 years 1 month ago

Spyker owned Saab Automobile AB and lost the money they put into it, plus future profits they could have made…

scand
Member
4 years 1 month ago
The bankrupcy administrator is the responsible party for the estate of Saab automobile. He cant sue GM, as that is beyond his brief; he is there to wrap the estate up as quickly and efficiently as possible, and return anything to the creditors. He would have had to have consented to Spyker doing it in Saabs name, in order to give Spykers lawsuit any meaning – seeing as the contentious ATLA agreement for example, would have been between Saab and GM, not Spyker and GM. Saabs chump change share of the proceeds (10% reportedly) would then be added to the… Read more »
spacy
Guest
4 years 1 month ago
davidgmills
Member
4 years 1 month ago

An administrator of Saab Automobile AB sure can sue GM. See my post above.

scand
Member
4 years 1 month ago

Yes you are correct, but they (saab) are not in a financial position to do so, as is the case with most bankrupt companies I would suspect. That is what I meant, in this case, where suing GM would be costly exercise with no guarantee of success.

davidgmills
Member
4 years 1 month ago

That is where contingent fee lawyers come into play. They will take a case on a contingency basis where a bankruptcy attorney never would. All it takes is approval from the administrator (almost always given since there is nothing for the administrator to lose and everything to gain).

scand
Member
4 years 1 month ago

If Spyker had to get an investor, it would seem that no law firm was willing to do it on contingency, either because the odds of winning are not a dead cert, or because of who you are up against.

GM could drive the costs up hugely, I’d imagine, by casting the net wide for depositions etc.

davidgmills
Member
4 years 1 month ago
Personally, I think the law firm is the investor. And the expenses of litigation will be nothing compared to the potential pay off. You can take a lot of depositions for $100,000. Far more than you need. Experts might be $50-$100,000 but might be less. Couple hundred grand in expenses can get this case to a jury, easy. Getting past a motion to dismiss or past a motion for summary judgment — that is the hard part. But that is mostly legal work and that is free if the law firm is taking the case on contingency. It is likely… Read more »
scand
Member
4 years 1 month ago

If they were doing it on contingency, that would seem at odds with the statement that he has lined up a 3rd party investor to pay the costs.

Maybe the law firm is hedging their bets and doing some sort of hybrid fee structure.

Keith
Member
4 years 1 month ago

david – if the law firm has taken the case on contingency – do they need to disclose this? Or if the “investor” is a 3rd party and not the law firm, will the investor need to disclose who they are?

100%Saab
Member
4 years 1 month ago

Detroit, bad venue for Spyker.

Just a thought.

xelav
Member
4 years 1 month ago

Also from a sunny Mallorca , victor for president(of Saab )! Great news, he kept his word to keep fighting for Saab . Didn’t see him here yet 🙂

xelav
Member
4 years 1 month ago

Btw Tim R, are you flying me back this Sunday , with condor/Thomas cook to dusseldorf?

KaiC
Member
4 years 1 month ago

So we have got good news and bad news.Good news is VM is getting up after a long sleep .Bad news is it is too late for Saab.

rafael guerra
Member
4 years 1 month ago

as a result of this mess , little by little I promised to talk with my friends and any person who know about GM cars, I explained them that is the worst car, is the worst option, the worst company in the industry,
the objetive of this “mission” is to create a bad reputation about GM
one bad recommendation will result in 100 more in 1 year ,
I will continue doing this the rest of my life and I sure that GM will lost a significant number of sales….
at least in my HomeTown

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