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.