Tuesday Snippets

I’m on a work assignment for a few days, so posting will be at a slower pace than normal.
If you feel like trying your hand at being a blogger, now’s the time to write.
Two things from Autoblog this morning.
First…… 1,000 words on why I’d hate to see Geely take over Saab:
And second…..
Does anyone else think Autoblog have fallen early for an April Fools joke?
Onstar to offer hands-free Twitter functionality?
I did my own April foolery a few weeks agowith the “Saab sold to Saudi Arabian” piece so there’ll be no more foolery from me.
As seen recently on a customer mailout here in Australia.
Nice to have you back at SAAB Australia, Parveen. None of this Premium Brands crapiola. Seriously, it’s great to see Saab with it’s own identity again here in Australia.
Thanks PT!

The Obama administration’s findings with regard to General Motors

The following is an edited reproduction of a PDF that was embargoed until Midnight last night (US time).
It lays out findings and new goals for both GM and Chrysler with regards to their viability plans as previously submitted by them.
In short, they’re not seen as viable – yet. But they’ve got time.
There’s nothing directly related to Saab in here, but I thought it important to share if only as an addition to the GM Crisis articles here on the site.
There is a more detailed PDF on General Motors only, available here.
Obama Administration New Path to Viability for GM & Chrysler
In accordance with the March 31, 2009 deadline in the U.S. Treasury’s loan agreements with General Motors and Chrysler, the Obama Administration is announcing its determination of the viability of the companies, pursuant to their February 17, 2009 submissions, and is laying out a new finite path forward for both companies to restructure and succeed. These findings and new framework for success are consistent with the President’s commitment to support an American auto industry that can help revive modern manufacturing and support our nation’s effort to move toward energy independence, but only in the context of a fundamental restructuring that will allow these companies to prosper without taxpayer support.
Key Findings
• Viability of Existing Plans: The plans submitted by GM and Chrysler on February 17, 2009 did not establish a credible path to viability. In their current form, they are not sufficient to justify a substantial new investment of taxpayer resources. Each will have a set period of time and an adequate amount of working capital to establish a new strategy for long-term economic viability.
• General Motors: While GM’s current plan is not viable, the Administration is confident that with a more fundamental restructuring, GM will emerge from this process as a stronger more competitive business. This process will include leadership changes at GM and an increased effort by the U.S. Treasury and outside advisors to assist with the company’s restructuring effort. Rick Wagoner is stepping aside as Chairman and CEO. In this context, the Administration will provide GM with working capital for 60 days to develop a more aggressive restructuring plan and a credible strategy to implement such a plan. The Administration will stand behind GM’s restructuring effort.
• Chrysler: After extensive consultation with financial and industry experts, the Administration has reluctantly concluded that Chrysler is not viable as a stand-alone company. However, Chrysler has reached an understanding with Fiat that could be the basis of a path to viability. Fiat is prepared to transfer valuable technology to Chrysler and, after extensive consultation with the Administration, has committed to building new fuel efficient cars and engines in U.S. factories. At the same time, however, there are substantial hurdles to overcome before this deal can become a reality.
Therefore, the Administration will provide Chrysler with working capital for 30 days to conclude a definitive agreement with Fiat and secure the support of necessary stakeholders. If successful, the government will consider investing up to the additional $6 billion requested by Chrysler to help this partnership succeed. If an agreement is not reached, the government will not invest any additional taxpayer funds in Chrysler.
Detailed Findings on GM and Chrysler Plans

Read moreThe Obama administration’s findings with regard to General Motors

So just which brands were profitable for GM?

i don’t know the answer to the question in the headline, but it popped into my head the other day as I was reading the various corporate obituaries following Rick Wagoner’s removal from GM.
One of them mentioned that GM have lost around $80billion dollars in the last four years.
That’s $80,000,000,000 and to put that in perspective, that’s more than 10% of Australia’s 2007 GDP. Ten percent of the annual output from a prosperous, industrialised nation of 20 million people lost by one company over a period of four years.
A lot has been written about Saab’s lack of profitability, mostly in justification of GM getting rid of Saab. But with numbers like that, and all the internal accounting hoo-haa, it’s easy to see that Saab were, at most, just a tiny blip on the corporate radar screen. Jettisoning Saab is like swatting a fly.
In contrast, very little has been said about which brand is the major villain in this 80-billion-dollar sinkhole.
I would love to see the brand-by-brand breakdown and see who’s lost the most. The next time some journo rabbits on about how Saab were just a dead weight, we could then point them in the right direction and let them know that Saab’s philosophy on vehicle design was the way of the future, which GM ignored to their own detriment.
Just a thought.

How reliable is your Saab?

I was chatting with a friend of mine the other night. He’s a regular here and a fellow Saab nut, though he doesn’t currently own one. He’s in the market for another car but is a bit worried about picking up a Saab because of reliability problems.
Now, I should explain further….
This car will be used a fair bit for his small business, so uptime is important. He’s also got a young family to go along with the business, so running costs are important.
Me? I don’t place a huge premium on reliability. I never expect a machine to run perfectly and therefore, I’m never disappointed when something goes awry. I absolutely never expect a car to work perfectly. All those moving parts and the way I drive most of the time are a recipe for wear and tear.
Having said that, my luck with Saabs seems to have been rather good. In 4 years with the 9000, the only unexpected item we’ve had to do is a radiator. With the Viggen, the only surprise was an exploding shock absorber. With my C900 there was an intermittent fuel delivery problem that annoyed me a bit, but it was a 23 year old car and issues are to be expected.
I tend to class Saabs as pretty reliable vehicles. Look after them and they’ll look after you. But maybe I’m one of those who wears rose coloured glasses a little too often.
So how do you rate your experiences with Saabs in terms of reliability? When they go, they tend to go big, but I’ve just never had one go on me and regular maintenance (5,000km services) and a top notch mechanic seem to do the trick for us.
How about you?

2010 Saab 9-5 out and about in Trollhattan

Djup Strupe’s been in touch and let me know that from this week, some Saab 9-5 mules will migrated south from northern Sweden and will be visible out and about on the streets of Trollhattan.
Trollhattan locals who frequent this site ought to carry their cameras at all times. Saab 9-5s will most likely be disguised in some way, but as Saab are keen to remind people of their ongoing viability, they shouldn’t be too hard to spot.
You’ve been told, now go out there, hit those usual test roads and see what you can see!
And speaking of Trollhattan, one of our regulars here at SU visited the factory last week (I’ll refrain from mentioning names).
The factory was idle but he said there were some Saab 9-3x’s on the production line and they looked quite good in the metal.
There was also some work going on in setting up for the next generation of vehicles, which was quite exciting to see.

Is Saab safe from Chinese ownership?

I know that a few regulars here have made good arguments to support the possibility of Chinese ownership of Saab. I understand that they’re improving in terms of design and production and there’s a good possibility that they’ll come up to world standards quicker than what the Koreans did.
In intellectual terms, I know this. But I still don’t want Saab to go into Chinese hands.
I don’t know if it’s their preference for having a slice of state ownership in just about everything they do. It could be their habit of just taking whatever the heck they feel they’re entitled to (a nice slice of Australia’s Antarctic territory, for example). Maybe it’s just because they’re the looming biggest player on the world stage. And maybe it’s just plain old fear borne from ignorance of their language and culture. They make decent martial arts movies and if I’m to believe the eatery down the street (which I don’t), they make a good honey chicken also. But I’m not sure I want them trying to make my favourite cars.
As it turns out, I may have nothing to worry about.
One thing that puzzled me just a little as I read the stories about Chinese companies chasing Volvo as whether or not they’d have the resources or the understanding of scale to pull such a transaction off. Same with a relatively smaller operation like Saab.
It’s one thing to come up with a purchase amount. It’s another thing all together to run the company.
I wasn’t the only one with such doubts. From AFP:

Despite their global ambitions, Chinese automakers are still not big enough to take over their troubled foreign rivals, analysts and company officials said….
….Analysts….. said they do not expect to see any startling Chinese auto acquisitions in the near future.
“Compared with more than 40 billion yuan (5.8 billion dollars) needed to acquire Volvo, (Geely’s) market value is only about three billion yuan,” consultancy Roland Berger said in a research note.
“The total assets of Chery Automobile are about 30 billion yuan, with capital of three to four billion yuan and the acquisition requires about 40 billion yuan,” the firm said, listing the Chinese automakers that would be most likely to bid.
…..One exception — and one that has turned out badly — is SAIC’s acquisition in 2004 of small South Korean automaker Ssangyong, which now faces bankruptcy.
Jia Xinguang, an analyst with the China Automotive Industry Consulting and Development Corporation, agrees Chinese companies lack the necessary management experience.
“The complicated relationship between trade unions and employers in foreign companies is another problem for them,” he added.
But size is the main obstacle.
“Any overseas acquisition needs National Development and Reform Commission approval and at his time the NDRC has concerns about Chinese companies’ capacity to run such acquisitions,” said John Shen, an analyst for Roland Berger.

Saab are, of course, a much smaller fish that the Chinese would have to fry and it’s arguable in terms of size that they could pull it off.
Saab have indicated that they are talking to interested buyers from both inside and outside of Sweden and they’ve acknowledged that at least one of them is from Asia.
On a Saab-staying-alive level, I hope that whoever takes over Saab will have the stability to keep the company alive and the resources to make the company thrive – whoever they are.
On a personal level, I hope that someone more in tune with the company buys it before the Chinese do as I believe they’ll mostly be after what they can get from Saab rather thn what they could give to Saab.
But that’s just me.

Rick Wagoner takes one for the team – steps down.

One of the chief architects of the last 8 years at GM – CEO Rick Wagoner – has reportedly stepped down as a preface to President Obama’s statement on the reconstruction of the motor industry, which is due tomorrow.
From Automotive News:

General Motors CEO Rick Wagoner is about to resign after eight years as the Obama administration prepares to decide on the automaker’s request for additional government rescue loans, two people familiar with the matter said.
A senior Obama administration official told NBC’s John Yang that Wagoner, 56, was asked to step down by the White House.
The automaker, which has lost about $82 billion since 2004, awaits word Monday from President Obama on a request for as much as $16.6 billion in additional U.S. aid. GM, surviving on $13.4 billion in U.S. loans received so far, has failed to clinch needed concessions from bondholders and the UAW that government officials had set as targets to justify further aid.
Obama said in an interview broadcast today that GM and Chrysler LLC had not done enough yet to become “lean, mean and competitive” under federal oversight.
Obama, who appeared in a taped interview on the CBS-TV news program “Face the Nation,” said the automakers had more work to do to reduce costs in the face of slumping demand.
“We think we can have a successful U.S. auto industry. But it’s got to be one that’s realistically designed to weather this storm and to emerge … much more lean, mean and competitive than it currently is,” Obama said.
“That’s going to mean a set of sacrifices from all parties involved — management, labor, shareholders, creditors, suppliers, dealers. Everybody’s going to have to come to the table and say it’s important for us to take serious restructuring steps now in order to preserve a brighter future down the road,” he said.
Obama added: “They’re not there yet.”
Immediate departure?
The Associated Press said Wagoner will leave immediately. The story was first reported by Bloomberg News.
Wagoner came under fire for his stewardship of GM late last year when U.S. lawmakers debated a bailout for the automaker. He had repeatedly said that he intended to stay on, and GM’s board has offered unanimous support for him.
A GM spokesman declined comment.

Today’s my birthday.
One might think I’d see this as a nice little birthday present, but in truth, I’m a bit sad for Wagoner. I think he’s probably being made to be a scapegoat here by an administration that’s trying to look like they’re all about taking action.
If there’s one thing GM need at the moment it’s stability at the top and whilst Fritz Henderson will probbly make a good replacement, I don’t think Wagoner’s deserving of the large slice of blame that he’ll get for this.
Wagoner always made sense when he spoke, which is more than what you can say for many of his cronies. Still, GM’s share price has dropped around 95% since he took over, so I suppose that says more than any of Wagoner’s eloquence. At the end of the day, the buck should stop at the top.
The big question now is what a change at the top will mean for GM’s ongoing obligations with Saab, and perhaps even more immediately, whether the Obama administration will try and force more action by way of a structured bankruptcy proceeding.
An announcement like this one hints at big things coming.

Friday Snippets

Greetings from the city of my birth, Melbourne, where last night my wife and I joined almost 87,000 other people in watching my beloved Carlton Football Club win the first game of the AFL season.
Ah, life is good!
Tonight it’s Billy Elliot, the musical.
Access is limited so writing will be in short supply until a return home in the very near future.
Edmunds have a short story on Volvo and Saab being sold, with them mentioning several suitors for Saab.
My mail says the number is very close to, if not already in, double figures.
Saab Story #1
According to a writer at consumer reports, Saab convertible owners are more authentic than other convertible owners.
But then we probably already knew that, right?
Saab Story #2
Memo to Ben Rubin at Salon:
Saab’s not dead, buddy. And don’t count on them being that way just yet.
I’d encourage everyone to read that article. Thanks to the multiple Salon readers who linked me up with it.
I’ll be back with more when I can. Have a good weekend.

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