Plan B, my thoughts.

As I wrote in my Post one week ago the english version of the reorganisation plan was not published. So all of I wrote was mostly based on the Appendices 2 and 3. In the meanwhile I was able to read the reorganisation plan in English as posted by Tim and this are my thoughts about it. This is only my view, an engineer that has worked for the automotive industry for the last 16 years and loves Dilbert, the comic stripe, so you can imagine what I think about management.

The form
This is the document sent too the creditors so they can judge if the reorganisation will take NEVS to a position where they can get their money.

I think the administrator is putting the reorganisation as the only way for the creditors to be full refunded.

The unsecured creditors are mot expected to receive full dividend from the distribution in the event of bankruptcy despite the high book value of the assets

I could believe that some of those creditors already know what a bankruptcy means for them as they already went through one in 2012.

There have been many talks lately about SAAB AB not granting NEVS the right to use the SAAB brand for their products anymore. This came completely unexpected, and we still have no idea if this decision is irrevocable or not, but if this is the case, why are the SAAB word symbols in Trollhättan? Yes, it is coupled with costs to remove them, but no car from that factory will be allowed to be branded as a SAAB car not now and not in the future, so why postpone that. And coming back to the plan, why would an attorney write this sentence in the plan

As stated in the letter, [RedJ:Is to think that this is the letter that has been attached to this document when it was sent to the creditors] one of the manufacturers is specially interested in incorporating the Saab car as a premium brand in its existing vehicle group, …..

knowing that NEVS will not be allowed to use the SAAB brand?

The content
I want to focus on the point 5, reorganisation of the business. Thera are mainly two plans, stay as an OEM an build their own cars, maybe with the SAAB brand or give up the OEM status and develop and build cars for other manufacturers. Yes they also talk about the combination of both, but I think the feasibility of the combination of both will be further inspected when some kind of binding agreement exists on the OEM plan.

The OEM plan is long known, although no one has yet officially confirmed the names of those two Asian car manufacturers. One Automotive OEM kill buy up to 80% of NEVS and make a business plan where SAAB comes back to live as a premium brand, we have the examples of Jaguar and Volvo, and both have proven to be a feasible option, although SAAB in ist current position will need much more money and time to create new products, whiteout being able to create revenue with older products. So it will be very interesting to see the final business plan from that Asian manufacturer.

The other part of the plan is to create a JV with another Automotive OEM to share costs in the development of cars based on the Phoenix platform. This is also no new business approach and SAAB has some experience in that with the SAAB 9000 and its italian cousins. And to be honest I don’t think that Chinese OEMs will manage to build a global platform without help from an European or American OEM, at least for the next 10 years, bets accepted. So this is their possibility to make a product for the global market and by doing this being treated as a serious contender. The question is, does this Asian manufacturer see this opportunity this way?

But there is a small passage in the text, that I think I do not understand fully.

The Company has also entered into negotiations with other parties that have expressed interest in the production and facility resources in Trollhättan. These negotiations, which were initiated after the initiation of reorganisation, might result in sales of all shares in the Company or in an agreement on contract manufacturing and development projects.

From my point of view, one of the options seems to be, that somebody might buy the whole of NEVS from the current shareholders and use the production facilities to produce its own cars. I may understand it wrong, but it feels like they are also thinking of stepping off, which means the end of Saab cars, I hope not.

Plan B
Restructuring to contract manufacturing.
This is the plan that destroys any last possibility to see a Saab branded car in the future. But maybe it is a not so bad option for Trollhättan and its car building knowledge.

During the SWAN era, a company with the name SAAB Engineering Services was founded. SES was meant to leverage the use of the engineering capacity in SAAB Automobile with external projects. PORSCHE has also the PORSCHE Engineering company, but the history of PORSCHE is quite different.

During those last SWAN months and during the bankruptcy period some external customers were interested in the engineering capacity in Trollhättan and most of all in their testing capabilities. It is not a secret that during the bankruptcy period some products from JLR (Jaguar LandRover) where tested in Trollhättan.

So using this experience and contacts NEVS have been thinking about expanding the engineering services to NEVS Industrial Services, adding all their experience in production and production planning as well as production capacity in a very flexible production plant.

Who would be the competitors to NIS? To all the companies that I know only one offers the full package, namely MAGNA. But as far as I know it has already to much to do in both engineering and production. Nedcars and Valmet, as an example, offer only production capacity, and Semcon or PEG, to name others, only offer Engineering services. If you add to the equation the fact that Asian OEMs may want to try production in Europe for Europe before building an own production facility, you could say that NIS has a future. Time will tell.

Conclusion
I’m still hoping that NEVS is able to ink contracts with those two Asian car manufacturers, so plan B ends up as an added income. If this was the case, the production line would be able to run at a higher capacity which is good for Trollhättan and at the same time create some extra income needed of develop those cars that we all love with some out of the box ideas.

If Plan B is the only income for NEVS, it will still be good news for Trollhättan, as cars will be produced in Trollhättan, but it will be bad news for a Saab fan base, as this will be the end to cars with a Saab brand.

I started this post one week ago, in the mean time the reorganisation plan has been accepted by the creditors and reorganisation has ben prolonged till the November 29th.

I don’t know the reason, but since October 8 many positive voices have been heard from NEVS, and the most important to me, Mattias Bergman has announced that he expects the contracts with the two Asian car companies will be inked before November 29, while his normal answer previous to that date was nobody could say when, but negotiations move forward.

CoolCombi
Member
1 year 11 months ago
I have been driving a Saab exclusively since 1986. First a new ’86 C900 Base Model, next a ’99 9-5SC that I bought in 2002, next an ’09 9-3SC which I bought new at GM’s first bankruptcy and currently an ’11 NG 9-5T4 Premuim. I have attended several North American Saab Owners Conventions in addition to our local club hosting the event in 1988. Peter Backstrom stated that there will be a Saabfest in Sweden in 2016. I plan to attend that one if it comes together. The Saab brand has been hanging by a thread since the Spyker days… Read more »
kochje
Member
1 year 11 months ago

I am in exact the same situation.
My Saab 9-5 NG is having 156.000 KM right now and I hope I can use the car for the last four years before I go on pension leave. Look also forward that the Griffin rises out of the ashes again. So cross our fingers that plan A and plan B get realized. These two together will have a better basis for the plant in Trollhattan and hopefully gives the employees again the trust for a stable future and us again our beloved cars.

Giray
Member
1 year 11 months ago

Plan C – use Kickstarter 😉

Romac
Member
1 year 11 months ago

Kickstarters have been known to bite the ankle!

It seems a different sort of wait for news this time compared to last – somehow bleaker.

Angelo V.
Member
1 year 11 months ago
“I don’t know the reason, but since October 8 many positive voices have been heard from NEVS, and the most important to me, Mattias Bergman has announced that he expects the contracts with the two Asian car companies will be inked before November 29, while his normal answer previous to that date was nobody could say when, but negotiations move forward.” Quite often, these optimistic sentiments are expressed toward the end of a corporate lifespan—-on the heels of a company’s demise. I’m not saying that’s the case here—-but the fact is that anything he says must be taken with a… Read more »
tianalfred
Member
1 year 11 months ago

States to electric restructuring is approved, the transformation of the way in doubt
2014-10-10 23:48 automobile sensor, Tian Yongqiu

—-
Edit from RedJ:

tianalfred, if you want to add some information from an external source is OK, but it is not OK to dump som external articles as Posts.

Mailr
Member
1 year 11 months ago
About the name issue, Mattias Bergman has stated in an interview that renegotiation the the name license is needed anyway for Plan A, and hinted that there was already ongoing discussions with Saab AB before the reconstruction filing. Of course Saab AB won’t give a blank endorsement to a new owner, so Mattias might be truthful that the severity of the termination may not be that great. From the standpoint of Saab AB it is quite logical to terminate the license at the time of the reconstruction filing, as any convoluted statement from competitors about Saab AB being involved in… Read more »
kochje
Member
1 year 11 months ago

That seems to be 100% correct.

SaabKen
Member
1 year 11 months ago

So basically SAAB AB was thinking along the lines of: “‘Nuff of this nonsense ! We’ll pull back our name before/during any reconstruction/bankruptcy process occurs. After the dust settles and we’ll negotiate the naming licensing with the new owner(s) if they are deemed credible business-wise.” ?

kochje
Member
1 year 11 months ago

That’s most probably how they think.

Angelo V.
Member
1 year 11 months ago

I guess it’s a chicken/egg thing though, or a Catch 22. I mean—-the deal might hinge on whether or not the Saab name can be used—-and whether or not the Saab name can be used seems to be hinging on the deal. We’re hung up folks.

Niklas G
Member
1 year 11 months ago
Regarding the Saab brand, Jonas Fröberg has some doubts that Saab wants to give the rights back to NEVS and their new owner. He claims in a recent article that one of the reasons that negotiations take so long time is that Dongfeng manucactures military vehicles and therefore are not accepted by Saab as a partner to NEVS. http://www.svd.se/naringsliv/motor/darfor-far-nevs-bilar-inte-kallas-saab-langre_4000995.svd Anyway, there are many speculations and rumours flyting around and no official confirmation even about who NEVS are negotiating with, Dongfeng have even sent a press release claiming that they are NOT in any negotiations with NEVS. So we’ll just have… Read more »
Mick E. Bice
Member
1 year 11 months ago

So ditch Dongfeng and keep Mahindra. Problem solved.

SaabKen
Member
1 year 11 months ago

+9 !!!

Avelik
Member
1 year 11 months ago

Brilliant idea! I’m sure Mahindra will be super happy to spend a few hundred million euro more to cover the DF’s part of the investment. They will be even happier to lose a prospective partner in one of their most important markets.

Mick E. Bice
Member
1 year 11 months ago

Mahindra could of course choose to learn the lesson about the ever-elusive Chinese money the hard way, which will make whatever’s left of Saab remain a laughing stock for a few more years. Or they could learn from history and go it alone. Depends on how smart they are, I guess.

Avelik
Member
1 year 11 months ago

PSA is still waiting to learn the lesson. Same for Volvo. “The lesson” is in your head only

Angelo V.
Member
1 year 11 months ago
Every deal is different, so there isn’t a generic lesson to be learned. There are good Chinese partners and bad—-same as anywhere else. I do think there are some inherent risks in having intellectual property rights raided—-that has happened to some Western entities who have partnered with Chinese firms—-and the Chinese firms have violated parts of the agreements and their government turns a blind eye because they’re in on it. That’s been happening for many years. But truth be told, yes, the money is there—–and there are also very smart people there and a good labor force too. So to… Read more »
Avelik
Member
1 year 11 months ago
That was my point. Some people here seem to demonize all the Chinese companies just because of the problems SAAB had with some of them. It is a fact that many Western companies have had problems with Chinese ones but there are many explanations for that. It’s true that the Chinese think differently from the westerners about certain things and that causes problems in the dealings but that is a double way process and it’s not always the Chinese who are to be blamed in a case of a problem. Other important factor is that many Chinese companies haven’t accepted… Read more »
Niklas G
Member
1 year 11 months ago
Nice to read that opinion about Dongfeng. 🙂 If the reason for the negotiations to take such long time is that both NEVS and the two asian companies are determined to make a deal and a business plan that all three really agree on and find worth spending enormous amounts of time and money on carrying through, then that’s a whole lot better than making a much quicker deal with some company that care less and/or signs a contract for funding with money that they do not have. So fingers crossed for the current negotiations to lead to something really… Read more »
Ronnie_Rad
Member
1 year 11 months ago

Mahindra also manufactures military vehicles.

If that’s the problem, then I guess the ship has already sailed. Saab AB can’t be accommodated.

hans h
Member
1 year 11 months ago

Saab and Mahindra already cooperate in other fields. So I don’t think that is a problem. 🙂

tianalfred
Member
1 year 11 months ago

why the article from Chinese perspective on NEVS were ALWAYS deleted? here is the original Chinese, you may use google translate to read: http://www.cheyun.com/content/news/3545

Mailr
Member
1 year 11 months ago

This picture was interesting (unfortunately I can’t read the Chinese texts):

According to this the setup has canged and now, Mahindra is to get 80% of NEVS, and there is a third company called OEM3 involved as well.

Now, and I’m guessing here, that might be a separate entity that will is planned to get a Saab name license. I.e. it is possible that NEVS won’t get the name rights back, because the plan is to use it in a different legal entity!

tianalfred, do you think I’m on the right track?

tianalfred
Member
1 year 11 months ago

Hi Mailr, thanks for kind comments on my charts and my article as well. KJJ has sold out all its controlling shares in State Holding, with an attempt to get money, but unfortunately it’s not enough. also What i know is that the brand issue of saab is under extensive discussion among all parties. some local Chinese gov. is playing very important role as well.

Mailr
Member
1 year 11 months ago

The article is a little bit hard to interpret through google translate (btw, is there another service you can recommend that yields better results?), and as I assume you have seen other local Chinese info on this, do you have any clue on what Qingbo is doing, and how they view the situation? Is there any discussion in Qingdoa on this, and if so, where is is going, or is there other issues going around that dwarf this? I.e., the local take?

Doug R.
Guest
1 year 11 months ago

Agree Angelo,,,, Bottom line the name Nevs is shot sucks… Most important its tarnished and has no credible value,

I think in reality this tail spin is coming to an end soon… Drama and way to much time for a deal… Bigger deals in the past with much more complexity have come together sooner.

That is why I just don’t see the light.

hughw
Member
1 year 11 months ago

We had a singer in the US who gave up rights to his name or something like that and afterwords was known as ” the Artist Formerly Known as Prince.” Perhaps the new company can be incorporated as “The Company Formerly Know as SAAB.”

Angelo V.
Member
1 year 11 months ago

How many years did it take to walk a man on the moon, 8 or 9? It took NEVS the better part of two years to restart production of the 9-3. And we’re hearing that it can take up to 6 or 7 years for new models? It’s ridiculous.

3cyl
Member
1 year 11 months ago

Decades of struggle may be an indication that the task of making SAAB viable is more difficult than putting a man on the moon. At this point it is surprising that anyone is interested in attempting it. It probably wouldn’t take any longer to establish a new brand.

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