Tonight I chatted with Eric Geers from Saab Sweden. Eric is the Director of Communications for Saab Automobile, working mostly out of Gothenburg.
We covered a number of topics and I’m pleased to say I’m feeling quite good about Saab’s prospects should GM make it through the current storm it’s in. After my first questions about the 9-6x, the current outlook for Saab is exactly where we started:
Trollhattan Saab: What’s the general mood around there with everything that’s going on right now?
Eric Geers: I would be naive to say that everyone is extremely confident that everything will be OK in the future. I think people have a belief in the fact that we have done the right things. The thing is that you cannot influence the economic situation. We don’t know exactly when the end of this is going to be. That’s the scary part.
But we’ve taken actions since around 2003 or 04 when we were part of the selection process for production – they were looking for where to produce a midsize vehicle (the 9-3) – and so we did a lot to shrink our costs. From a cost structure perspective, from a people perspective, the number of people and so on, we are in good shape. We have improved the factory, we have absolutely the best quality we’ve ever seen, from our warranty costs and so on – they have come down spectacularly – so we see a number of things that we can control that are all moving in the right direction. From that perspective, the people are extremely motivated.
The other thing, of course, is that you would like things to move faster with product expansion. We have been saying this, and we have been….under the leadership of Jan-Ake Jonsson we have been starting a new way that we kicked off a couple of years ago. Basically the Aero X was symbolic for “well this is going to be the new Saab”. Since then we have developed new models that you will see rolling out from next year.
Of course you want to do that faster, but at the same time there are doubts that this is the right time to launch a new model – under the current conditions and so on. But we know that that is our weakness. We have two model lines, the 9-3 and 9-5, and one of these is 11 years old and we know that that’s far too old.
So the things we control we feel very good about, also the workforce feels very good about what we have achieved. But the thing you cannot control is the economic outlook and what the effects are going to be.
TS: I’ll get to the 9-3 and 9-5 in a moment, but one of the things I wanted to expand on a little bit is….the cuts the company has made to get in shape over the last few years. We’ve been writing about the fact that cuts have been made, but what were they? What has been done in the last few years to bring the company into line?
EG: Well, a lot of things have been done. For example, in terms of people, we now have around 4,000 people manufacturing around 100,000 cars. From that perspective we’re doing well. We’ve also integrated a lot more with General Motors, significantly, to make sure we don’t duplicate to make sure that things we’re doing here… they’re not also doing in Russelsheim or in Asia. We are now an official GM Global Manufacturing System plant, so that means that we can build a car of a given size in Trollhattan as well as in other plants around the world that have the same manufacturing system. We’ve been taking out a lot of ‘fat’ out of the organisation….
TS: Has that all been in the form of jobs?
EG: No, it’s not all been jobs. If you look at the way we developed the 9-5 or the current 9-3, those were rather expensive to manufacture and to develop. Sometimes we’ve been blamed for being too much like an Opel. I can tell you that the current 9-3, in fact, doesn’t share too much with an Opel Vectra at all. To the point where you wish you would have shared more – not the things that are visible to customers, but going completely on your own – the thing that Saab did in the past – that’s not really the way to go forward. In the end, you need to get good business results and that’s what’s driving us forward…..
….All in all, we are in very good shape. You see with our neighbors, Volvo, they still have to go through all this. Their workforce is far beyond what we have in terms of the number of people and they have to go through what we’ve already been through. Cutting down further, at this point, is not a case for Saab. At this point, our ambition is to grow.
TS: Imagine it’s down the track and all the current GM stuff is sorted out and you’ve got your three models, including a new 9-5 and 9-4x. How many cars do you need to sell before you’re turning a profit?
EG: We would say that if you can do between 150,000 and 200,000 cars then you would have a very nice business. Now, at the same time, if people will ask “where is the break-even point?” then you have to ask “well, tell me what are all the exchange rates, and so on and we’ll tell you where the break even point is.” These exchange rates tend to flow up and down a bit, so it’s not easy to manouvre through this. Hoping that an exhange rate works in you favour is nice but it’s not a strategy you can build your business case around. Hope is not a good strategy.
TS: Planning to fail.
EG: Yes. So what you can do then is, for example, build a car where there is a strong demand. The 9-4x we’ll build in Mexico – which is, by the way, one of the best factories in the world in terms of quality – and that’s what you’ve got to do when you know that around 50% of your audience for this car is in the US market. You want to build it there with a low cost base, in dollars, and then shipping them from the dollar zone to the Euro zone does make a lot of sense.
——
More to come:
– Eric could only tell me a little about the 9-5 and 9-4x
– Plans for the Saab Festival 2009
– A little also on the 9-3x
– and more.
But right now I have to go to bed 🙂
——
Recently, I chatted with Eric Geers from Saab Sweden. Eric is the Director of Communications for Saab Automobile and splits his time between Gothenburg and Trollhattan.
In part one of this interview, we covered the general conditions at Saab at the moment, especially in light of the current situation facing parent company General Motors.
Here’s part 2:
——
Trollhattan Saab: We’ve heard that they’ve been delayed, but how close were the 9-5 and 9-4x to being finished? We’ve heard that GM set priorities whereby a car had to be 90% ready to continue on in this current climate. How close were these cars to being done on time?
Eric Geers: First of all, we never officially indicate when we’re going to launch new products, but as I said earlier, there were so many speculations that in the end, dates end up almost living their own lives. So as long as a car hasn’t yet made it to market, it’s very difficult to talk about a delay.
There are always re-timings when you are developing a product. There are always timing issues for various reasons. What we did say is that the 9-4x has been delayed a little bit but the 9-5 is currently completely on schedule.
TS: So the 9-5 is on schedule from your perspective?
EG: Yeah.
TS: And that schedule hasn’t changed in the last six weeks?
EG: …….
——
Note, the vehicle is on schedule from Eric’s point of view. Whether that schedule ever aligned with the speculations here or elsewhere in the automotive web is another matter.
It’s at this point that things got a little blurry in terms of what I can and can’t say here at TS. If I get my information from a Djup Strupe, then I feel at liberty to share. But if I get it directly from an executive and he requests that I use it for perspective only and maintain confidentiality, then I have to respect that.
Suffice to say that should GM and Saab survive the next few months and the market improves, then I firmly believe that 2009 is going to be a better year than what we thought it was a few weeks ago.
——
Trollhattan Saab: The other vehicle I wanted to ask about was the 9-3x…
Eric Geers: The 9-3x is going to be here. I just don’t know yet if we’re going to do an official press release and turn that into something…but as of next week the 9-3x is going to be out for test driving on public roads around Trollhattan so we can give you a look at this one.
TS: I don’t know if I can ask you this, but are we likely to see this before the 9-5?
EG: Yeah, that will be before the 9-5
——
This is great news, but not too surprising. The 2008 Saab 9-3 facelift was seen on public roads in Trollhattan well before the official unveiling at the Saab Festival in June last year. That the 9-3x, which is basically a 9-3 SportCombi in heavy boots, will do the same is good to hear, but not a big surprise.
It’s also encouraging that this vehicle will come about before the 9-5. There was recent news from one particular market that the 9-3x would be delayed in that market until 2010. It’s quite clear now that if that news still holds, then that’s for that specific market only and not for all markets.
——
TS: The big question, because this would be such a good seller, with the 9-3x being raised up a little, is there now room for a diesel engine (in combination with XWD)?
EG: …..(pause)….err, that’s part of the thing that’s still being discussed, powertrain. At this point I can’t give you the full update, but BioPower will be there. Diesel is still being discussed but I assume that that’s also the case, but it might not be because of the XWD issues. We also have to look at the numbers and the markets, they’re changing and the sectors are changing. In the end it becomes a business case, whether it does make sense to have it with a diesel or not.
TS: I’ve had quite a few people, especially from Europe, asking about the combination of the TTiD and XWD..
EG: Yeah. I know…..but I can’t say too much about that one. It would be great to get it in there but in the end it’s going to be the volumes that dictate whether it makes sense to do it.
——
Reading between the lines here, it sounds a little like the TTiD/XWD is physically possible, but maybe only with a bunch of expensive modifications that Saab will have to justify with projected sales numbers.
I really hope they do it, but knowing that the SportCombi is already a niche seller, and that the 9-3x will be another niche, I think it’s going to be a little tough to make a case for a niche within the niche within the niche. If you know what I mean.
——
TS: Assuming that there would be a delay in the new 9-5, I was wondering how you anticipate plugging any gap that may arise between the old one and the new one. Do you have enough of the old one left to see you through if necessary?
EG: I wouldn’t worry about that one too much…
TS: Well, the main concern was with the engines. Do you have enough of them? You sold the engine plant a while ago, right?
EG: Yeah, but that’s a matter of planning and banking and so on.
TS: So you’ve got plenty of those engines hanging around then?
EG: Yeah, that’s all under control.
TS: You want to send one down to me?
EG: (laughs) Yeah, we can ship you a couple. It might take a couple of months, but they’ll be there….
TS: I’ve got nothing to put it in, I might have to shoehorn it into my 900
EG: Sounds good….
——
That’s all for the second installment and we’re about two thirds of the way through the call.
Still more to come.
——
Recently, I chatted with Eric Geers from Saab Sweden. Eric is the Director of Communications for Saab Automobile and splits his time between Gothenburg and Trollhattan.
In part one of this interview, we covered the general conditions at Saab at the moment, especially in light of the current situation facing parent company General Motors.
In part 2, we looked at the progress with Saab’s new key model, the Saab 9-5, as well as a little info about the 9-3x, which will be seen in testing soon.
Here’s the third and final instalment, where we cover a number of topics in brief.
——
About Trollhattan:
Trollhattan Saab: What will you be building at the Trollhattan plant in 2010? Assuming the 9-5 is being built on time in Russelshiem, that will be out of the plant and 2010 was the time when we’d heard that Trollhattan was scheduled to start building vehicles on the Delta platform.
Eric Geers: Yeah, we call it compact premium. Delta is an internal code. It’s the size of the architecture that’s very important. It’s not so much the platform itself, but the manufacturing size. So if you are, say, a midsize or a compact plant, it means that you can build any of these types of cars in any of these types of plants in the world. So if there were a demand for compact premium vehicles anywhere in the world, it will be easy for us to build them there.
At this point, for example, with the 9-5…if there were to be a huge demand in Chine, for example, you couldn’t make it there. So with 30% or 40% import taxes in China or in Russia: if you want to be successful in these markets then you have to manufacture there.
TS: OK, so getting back to the fundamentals of the question there, can you build the current 9-3 and the compact premium vehicles together on the line at Trollhattan?
EG: Well, the 9-3 is on premium compact – the next generation.
TS: So, you just keep building the current 9-3 there until the next generation is ready?
EG: Yes, absolutely. The 9-5, 9-3, BLS…they are all still built in Trollhattan [until the 9-5 moves to Russelsheim]
——
On the 9-5 and the reasons why we can’t talk about it too much…
EG: …it’s not so much about discouraging sales of the current model because it’s not a big seller outside of Sweden, of course, because of it’s age. It’s still a great car, but it has 11 years of history.
TS: Yeah, it must be hard to sell people their third or fourth version of the same thing
EG: Yeah. It’s a great offer from us. You get a lot. You get proven technology, it’s a good car. But the new one is going to be completely different, I can tell you.
——
The 2009 Saab Festival
TS: Is the festival going ahead?
EG: We don’t know exactly about the festival but it might be that we do an event where we invite the Saab clubs to celebrate. We might look at some sort of activity that not necessarily is a Saab festival as we know it today. I can’t promise too much because we haven’t taken a decision on the festival at this point.
TS: I think a lot of people will just assume that it’s happening and turn up anyway.
EG: (laughs) Yeah, quite possible.
——
The roof
SW: The 9-X Air….when are we going to see the roof?
EG: Ahhhhh, the roof!
TS: Yeah, we keep hearing about the roof, reading about the roof, but no-one will show the roof in action.
EG: Exactly. We don’t want to do that because then people will see how it works and it’s going to be copied. And that’s what we don’t want.
TS: So, is that a patent problem?
EG: Well, part of it is the patent issue. You still want to make sure you own the technology and that no-one can copy you because it is a unique system.
TS: So once the patent comes through will you show us how it works or will we have to wait for a production model?
EG: This system could show up when we would introduce the next gen convertible. Not so many decisions have been taken on that one.
That car in that size is extremely good for Saab, we believe. It’s the right kind of technology: small engine, less size and weight, and so on. In the end, how the car will look….we’ve seen all sorts of media headlines like “Build it” etc etc, so the response has been very good. Now, it’s a matter of, well, how is the next generation 9-3 going to look? Obviously it’ll be very much Aero-X inspired, 9-X inspired. You’ll see a lot of it there. So I think we’ve found our new design lanuguage.
I wish I could show you some of the new products! The design language and also the rear end of the new Saabs are going to be very pronounced, it’ll be very identifiable as Saabish from a distance. That’s really what the key thing is. I mean, if you look in the rear view mirror you need to know that that’s a Saab.
TS: Well that’s right. You can see a classic 900 from 200 meters down the street and you know within a quarter of a second what it is.
EG: Exactly. And that’s the sort of thing we want. Not necessarily aggressive, but a stronger presence.
——
On Saab
TS: I’m pleased to hear that everything’s still feeling quite positive. I know there’s a lot of speculation, there’s a lot of worries and everything but everyone is pulling for Saab to come through in good shape.
EG: One of the good things is that Saab is a very relevant brand. It’s Scandinavian, it has the right heritage in terms of small engines. We’ve always been reliant on four cylinders, small turbo engines. Some people thought “Gee, now they’re finally moving to six cylinders” and you get into the big numbers and so on but we see that (small is) still the heart and the soul of Saab.
And it makes more and more sense, especially these days when we see six cylinder sales going down. Everybody, in the end, is going to use turbocharged engines, smaller engines, two litre…..you can expect engines to go down further in size. The BioHybrid was already 1.4 and so on, so from that perpective, Saab is a very relevant brand. It’s admired by a lot of people, so from a brand perspective, we have all it takes to become successful so we strongly believe in this. Now the only thing is you have to make it happen.
TS: Yeah, exactly right. Even Ford have got an engine variant now that they’re calling Ecoboost, or something, which is a direct ripoff of the old Saab Ecopower name. All the companies are going that way (i.e. turbocharging) and Saab’s had that philosophy for years. All we need is for people to see it.
EG: That’s what it is. And sometimes if you’re a small brand, that’s not always easy. In Sweden it’s easy because everyone knows what Saab is but as soon as you go outside of the borderlines of this country it becomes more and more difficult. That’s one of the biggest challenges.
——
On websites
TS: Why do some countries have different Saab websites to others?
EG: Well, you can have one main look and feel for websites, but there are some markets that still want their own look and feel for their specific customers. Sometimes it works and sometimes it doesn’t. Sometimes there’s advertising that you don’t want to see. You want advertising that we develop but you have to give some sort of freedom to make sure you hit the right audience in a specific market.
In the end, of course, the goal is to get one global look and feel with everything you do and say, and so on. That’s one of the things that the brand center is doing. It’s not only just looking at cars, but also looking at communications and the way we sell ourselves to the customer. The more consistent you are, the better. Especially when you’re a small brand. You need certainly to be consistent, which we haven’t always been in the past. It’s one of the things that Jan-Ake’s hammering all the time: consistency.
TS: Well, the Swedish site looks absolutely fantastic and it’s based on the international one, and I think the UK one has gone with the same basic look and feel. I hope the others can do something about it. It seems like it’d be more cost effective.
——
Once again, I’d like to thank Eric Geers from Saab for taking the time to have a chat.
And the photo at the top is Eric’s original photo, Simpsonised. 🙂
—