NEVS Plan A and Plan B

The news Yesterday of NEVS approaching third parties although they are still in Talks with the two Assian car manufacturers.

The OEM track
The OEM track

Well later yesterday they sent a preliminary reorganisation plan to their creditors, and helped us understand what this Plan B means.

According to their press release:

As a complement to the main track prepares Nevs an action that has the potential to become a leading contract manufacturers and development partners in the other vehicle producers, as the two carmakers Nevs negotiating with are positive. This means putting the company’s assets in the work by taking advantage of the facility also to produce for external customers.

In other words, they are moving in the same direction as SWAN was trying to do on their last days. At that time SAAB Automobile AB created an engineering consultancy to create an added source of income.

The Complementary Plan
The Complementary Plan

Is there a market for that? I work in such an engineering consultancy, and yes the is a big market for that, but only if you can offer solutions to the questions of the car manufacturers. Other people say, you have to convince the OEM that they have a question to the answer you offer them, but this is another story.

Many people may say that doing this, you will sell your USP to other people making your products less unique, but nowadays almost no car manufacturer have a real USP. This is the reason why for example Volvo is not advertising their cars as being more secure than others, but they put the brand and their Swedish roots in the foreground. You see similar effects with other brands.

Will this Plan B really help NEVS survive as a car manufacturer? Time will tell, and according to their reorganisation plan it is only a complementary plan. If Plan A succeeds they would habe an added source of income with Plan B, if Plan A doesn’t succeed they say that the income of Plan B would suffice them to stay afloat.

My personal view on this is that NEVS was not contemplating Plan B till the administrator came on board. He must present a backup plan to the creditors on October 8, otherwise the creditors will not support him a let the reorganisation continue till November 29.

The 29th of November is no special date but the end of a 3 month period since they were granted reorganisation. I don’t know if they can ask then for a further continuation of the reorganisation, or if this is the end, but according to their reorganisation plan they are willing to have an outcome to plan a and plan b till then.

Steps from November 9
Steps from November 9

Rough translation of the text.

  • Negotiations are underway with OEMs regarding JV / TDC
  • Work and discussions with financiers under way regarding NEVS Industrial Services
  • Agreement on a new issue in NEVS
  • Reorganisation period of 3-month expires on November 29

You can find here the complete reorganisation plan. Although most is written in Swedish, the information on the plans is in English.

Bravada from GMI
Member
1 year 11 months ago

Those aren’t bad slides (even if it shouldn’t’ve taken more than 2 hours to make them), but they aren’t worth much without Excels.

Dagen Runt
Member
1 year 11 months ago

Start of production 2016. Production of what?

Angelo V.
Member
1 year 11 months ago

The classic 9-3, this time offered in white or red instead of silver or black. But seriously—-I had the same reaction you did.

900 classic cab
Guest
1 year 11 months ago

Outsource production for other brands (?)

900 classic cab
Guest
1 year 11 months ago

Because at this point, I don’t think we’ll see any SAAB branded car coming out of that factory.
Well…some Cadillacs were once made at that factory.

Angelo V.
Member
1 year 11 months ago

The Cadillac 9-3?

900 classic cab
Guest
1 year 11 months ago

yep, that one 🙂

No 9
Member
1 year 11 months ago

The ill famed BRS. From the dark days when GM divisions went after each other with the inevitable result we all know about: Bankruptcy. Opel is still trying to recuperate from this suicidal endeavour.

SaabKen
Member
1 year 11 months ago

It was called BLS, and infamously known as the “Bob Lutz Special”

BL: “Let’s sock it to Saab !”

bpsorrel
Member
1 year 11 months ago

I often heard it referred to as Bit Like Saab… 😀

Mailr
Member
1 year 11 months ago

My interpretation of it is that the first Phoenix cars are hitting the streets then and the current 9-3 will be dropped (except maybe for some low volume specialty production which would fit to keep the factory maintained), otherwise a restart would come earlier.

Let’s hope for a Phoenix car launch in 2016.

Angelo V.
Member
1 year 11 months ago
We’re a few months away from 2015. I don’t see any way they can have any Phoenix derived car ready for launch in 2016. It took NEVS almost two years to produce 9-3s again (more than a decade old car of which thousands have already been stamped out) and took them even longer to show a 9-3 with off the shelf bolt-on equipment as their “electric concept vehicle.” That’s the sort of stuff gear heads/wrench heads/shade tree mechanics do with their buddies over six packs of beer and a year of weekends. I understand the NEVS 9-3 EV was more… Read more »
Mailr
Member
1 year 11 months ago
Don’t be so pessimistic… I do agree that a 2016, especially early 2016, launch most likely is wishful thinking, however, the Phoenix haven’t had a normal design cycle, it’s been revised in mid-flight and, from my own design experience, is thus likely to be more mature than most as that gives better opportunities to correct early bad design decisions, so the completion may be more smooth than usual from a technical standpoint. Also, there is another factor, the production will most likely to start with (very) small volumes if, for nothing else market conditions, which means far simpler logistics. It… Read more »
Avelik
Member
1 year 11 months ago

It’s more than obvious. 2016 production start is part of the Plan B, which means it’s a start of outsourced production.

MeanSabean
Member
1 year 11 months ago

The scenario is almost set up like Swan’s,plan, let’s,just hope it doesn’t have the same results!

Smithy
Member
1 year 11 months ago

Anything about the right to use the Saab name? It’s quite an important detail.

saabserb
Member
1 year 11 months ago
Lot of my everyday work is to review and comment lots of documentation so let me give my comment on this :-): 1. Maybe formal, but anyway important: The Power Point matherial that is included in the document still contains SAAB logo! Didin’t NEVS loose that right few weeks ago? This shows me this: Either SAAB AB is changing their minds these days as a result of ongoing negotiations or the material is assembled using the old company template in hurry! 2. Maybe I don’t know the reconstruction process and what is needed but I don’t see any plan(s) here… Read more »
2T
Member
1 year 11 months ago
I had the same reaction initially, why on earth would an OEM decide to assemble its cars in Sweden ? Surely there’s is overcapacity everywhere and Sweden isn’t really a cheap country. But then Mitsubishi sold its plant in the Netherlands a couple of years ago and a third party now assembles Mini’s there – and NL isn’t exactly cheap labor either. The other thing is time-to-market. Some Asian manufacturer might want to produce their cars in Europe rather than have them spend two/three months on a ship. Speed of time to market can be a significant competitive advantage, perhaps… Read more »
Avelik
Member
1 year 11 months ago

On one of the slides in the Reconstruction plan it’s written that the factory in Trollhattan is one of the lowest cost manufacturing facilities in Western Europe, so it probably possesses some competitiveness.

phermansson
Member
1 year 11 months ago

Also consider the coming distance taxes on products in Europe, all items shipped from a greater distance will have an environmental footprint tax which size is measured in how far it has been shipped. Shipping a car from Taiwan for example will get a carbon tax Euro per km traveled until reaching the customer so shipping cars to Europe will be a costly business. So asian manufacturers who are really interested in selling their products within the EU might have to consider producing them in Europe in order to compete with the other already established European low-cost brands.

No 9
Member
1 year 11 months ago

Very interesting! This excellent move for the environment will have profound impacts on manufacturing sites. A major card in NEVS’ deck I would think.

John
Member
1 year 11 months ago

My be a taiwanes saab, luxgen. I would think it would be a lot easier to deal with tiawan than china. And i sure luxgen would love to sell car in europa

Dagen Runt
Member
1 year 11 months ago

The Valmet plant in Finland, the old Saab plant, is churning out the Mercedes A class these days. Production is looking to hit 100 000 units annually. Took a couple of dozen millions worth of investments but the cars are coming along now. Labour costs are roughly the same as in Sweden. Merc A is a hit right now and they needed a subcontractor to meet the demand. Something like that could well work for Trollhättan, although if they are about to subcontract an electric car, I doubt they need to prepare for similar demand.

Mailr
Member
1 year 11 months ago

Being a Valmet subcontractor, well, why not. I say that idea may very well work, there is likely to be people that have been working together, and fond memories, in both places from the time when Saab used Valmet as partner/subcontractor.

JoPlSe
Member
1 year 11 months ago

I hope it is a good plan. If you look at the other slides in the document you will find quite an extensive model plan. I guess it will take some time time to develop all these models. So even with new owners Saab may need to use the production capacity and have some income during product development.

Dagen Runt
Member
1 year 11 months ago
I read it too. They are looking to get a 3rd party client onboard during q4, develop a vehicle for that client in 2015 and produce it in 2016. That to me sounds as if they are looking to finish the 9-3 E for some other automaker than themselves or Mahindra, but that’s just my interpretation of it. Maybe they can develop a whole new model in a year. In their plan a they are looking, simultaneously to plan b, to continue with the 9-3 ice facelift and the 9-3E as well while developing the phoenix into four premium models.… Read more »
KT
Member
1 year 11 months ago
So if I’ve read this correctly, NEVS want to manufacture cars, but they also want to become a subcontractor for other OEMs? Well it makes sense in the short term at least. Rather than having a high tech manufacturing facility sitting idle, collecting dust and burning energy for little or no purpose for the next two years, you can produce cars with it for other manufacturers. Quite a smart plan if how I’ve perceived it is correct. Sad however that we won’t see any SAAB cars (if it’s still SAAB by that point) roll out until 2016. But if the… Read more »
Angelo V.
Member
1 year 11 months ago

KT: It would have sold reasonably well in the U.S. too—-especially if they ramped up convertible and combi models. Of course, if they were pigs with the price, the cars would sit on dealer lots. I don’t think NEVS is even close to producing cars in that factory by 2016—-it would take a small miracle for that, unless it is the 9-3 we’re talking about. And honestly, I’m having difficulty imagining another car maker who wants to and can afford to assemble their cars in that plant—unless there are political/EU reasons why it would be advantageous.

henke
Member
1 year 11 months ago
I am quite sure the old generation 9-3 could sell in respectable numbers even in Sweden… The problem for the Swedish market (and I guess for a lot of european markets in general) is that NEVS started with the gasoline version. Not many people here consider buying a gasoline car, and definitely not a thirsty one with 220 HP…That is a car for real SAAB enthusiasts, with a lot of cash as well… Many here at Saabsunited argue that the 9-3 is outdated, based on the fact that the gasoline version don’t sell well… I think that if NEVS re-launched… Read more »
Angelo V.
Member
1 year 11 months ago
There’s a health enough niche market in the U.S.A. that would absolutely, positively buy a Saab 9-3 diesel in sedan and combi models. There’s a small but large enough legion of diesel enthusiasts here, who for too long, haven’t had enough choices. Make it a decontented (read, cut back on the electronic crap and frivolous luxury features) car, with a diesel engine, and Saab would find buyers here if it was priced right. Add a convertible 9-3 with the traditional turbo gas engine and those would still sell in respectable numbers too. It’s not going to happen I guess, but… Read more »
3cyl
Member
1 year 11 months ago

The 9-3 didn’t sell well enough in its heyday and even then there were substantial discounts. It is not going to sell well enough now. The cost to build this old design in low numbers is at best about the same as or more likely even greater than the cost to build something more up to date. There may be interested buyers, but because of the competitive shortcomings associated with its age those buyers will expect it to be “priced right” (translation: sold at a loss).

Angelo V.
Member
1 year 11 months ago
It’s true that this car is more expensive to build than a new design would be (I’m not an expert, but Tim is knowledgeable on car production and this model specifically, and he’s said that several times.). Still, when you consider the gargantuan cost associated with designing a new model—-and when you amortize that mammoth cost over a typical Saab production run—-my guess is that as s stop-gap, the 9-3 could be sold for thousands and thousands less than a new model. Recovering the investment in a new model would mean adding a lot to the cost of the new… Read more »
3cyl
Member
1 year 11 months ago
More likely the low production volume would have offset any savings in deveopment costs requiring a price at least as high as that of more modern designs. Either that or sell at a loss – a good strategy for an owner who wants to get SAABs on the road with no regard to what it costs to accomplish those sales. This was evident in the petrol cars produced by NEVS, The concensus on these cars was that they were decent enough but not worth the asking price when compared to other products.. Some of us may have bought one of… Read more »
scand
Member
1 year 11 months ago

They want to become Valmet, or Magna Steyr ?

Which, if there is someone willing to use the factory to build *a vehicle*, then makes sense in the interim, rather than leaving it idle. With demand rising – perhaps there is more of a chance for this now, than there was when Muller tried to consider it a few years back.

baas900i
Member
1 year 11 months ago

Magna Steyr may be one of the mystery potential investors….

adde
Member
1 year 11 months ago
It does look very good in Powerpoint. But how will it be in reality? Lots of former Saab workers left their permanent jobs to start working at Nevs, which btw promissed them milk and honey just to come back (ie. in case it went to hell they would recive 6 months payment cos Nevs would take their employment time at Saab in consideration – now people found out they have gotten “wrong information by mistake”). Burned twice at same working place, they are feeling used and thrown away (i talked to one of, now former, workers). Angry and dissapointed are… Read more »
Angelo V.
Member
1 year 11 months ago
Heartfelt post and whether or not people like reading it—-it needed to be said Adde. Look—-I don’t know if it’s fair to expect an employer to guarantee that if you accept a job with them, you’ll retire from that job. That’s a very difficult thing for any business owner to say for sure. But I think we’ve seen what these people are capable of—-and it’s nothing, or very little. At this point, I can’t imagine, for the life of me—-any employee with talent, skills and other options, accepting a job with this group. They’ve been exposed and the wheel now… Read more »
adde
Member
1 year 11 months ago
Hey, Angelo! Ofc, there are no such guarantees nowdays, no matter of business you are in. I wanted to say, that basically that’s the only thing that can make me come back to Stallbacka, regardless of who ownes it. The trust in factory as a solid work place is gone due to all that happened in last 5 years. It is simply not worth being cannon fodder once again. Why should I and for whos sake? That factory is for youngsters who want to work a bit after secondary school (a year or two – and trust me i have… Read more »
Mick E. Bice
Member
1 year 11 months ago

The lesson SHOULD be “China is a dead end” – which I’ve said repeatedly for years, ever since Muller pulled Youngman and Pang Da out of his hat, and which unsurprisingly has turned out to be true.

SaabKen
Member
1 year 11 months ago
So if I read (and understand) all this reconstruction plan correctly, it simply (?) concerns NEVS’ plans and how its future partners will be involved, in the big picture. However *unless* the SAAB marque is maintained in some way, shape or form (how that will be done we have no idea …..), all this NEVS news is totally moot to me. As far as I’m concerned, unless the SAAB marque is maintained, NEVS is just its undertaker now and I don’t give a rat’s ass about the future of NEVS. Unless noted otherwise, NEVS essentially killed SAAB once and for… Read more »
Angelo V.
Member
1 year 11 months ago

Ken: I’m equally frustrated with NEVS. Without the Saab name, you’re exactly right—they’re not worthy of a second look by people who loved Saab. Without the Saab name, they’re utterly meaningless.

Doug R.
Guest
1 year 11 months ago

Saabken Can’t agree more as of today Saab is dead no matter what Nevs does.. The name has been taken away,.. therefore Saab is dead. That said Nevs is trying anything and everything they can to survive,, and future business moves may have nothing to do with Saabs future,,, Sadly they may keep the plant for two years longer…

I think this maybe the end… Reading between the lines I see a bunch of BS from one desperate company.. Sorry just what I feel.

Mick E. Bice
Member
1 year 11 months ago

Any plan that involves the usual Chinese “saviour” should be scrapped immediately without being given any consideration whatsoever. If that means that there are no plans left, then NEVS should close up shop for good.

Paul Willis
Member
1 year 11 months ago
First, it is sad to hear of the layoff of the NEVS employees. They have got to be some of the most loyal employees around, but one wonders how many can be retained going forward given the protracted negotiations for restructuring. I am not sure how unemployment benefits work in Sweden, but at some point a good number of these folks will likely decide to find employment elsewhere, which will make reestablishing the workforce, if and when production is re-started, difficult. I thought I had read that SAAB AB had decided to not extend the license of the SAAB name?… Read more »
Michael Specht
Member
1 year 11 months ago
1) I guess OEM A would be a holding company, financing only ; MNEH would leave 80 % of its Nevs shares, That’s a lot, it means KJJ will no longer be Nevs CEO. Hum… it sounds like KJJ is trying to sell Nevs (Phoenix patents included ?) without honestly admitting it. 2) I guess OEM B would be a car manufacturer (linked to the 80 % holding company) ; sharing 50/50 R&D means MNEH would only be 10 % involved in. Joint technical development centre with 10 % involvement only. What would that mean in terms of role for… Read more »
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