Dagens Industri have published an exclusive interview with members of Saab’s reconstruction team.
For those who are unaware, Saab filed for creditor protection on February 20 in a bid to reconstruct Saab Automobile and separate the company’s operations from General Motors. The most likely outcome is a sale of the Saab business to a third party.
Your thanks, and mine, go to ctm for this translation.
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Saabs reconstruction team: We are making progress
With only three weeks until the major creditors’ meeting Saab Automobile is halfway to the first critical milestone in its reconstruction. DI has met the auto manufacturer reconstruction team in an exclusive interview.
The wind is cold but the sun shines over Trollhättan when DI is visiting. All over the plant there are employees on their way to listen to the company’s CEO Jan-Åke Jonsson. In half-hour intervals, a few hours before the interview with DI, he briefs the staff on last week’s news about reduction of the workforce.
And the employees are worried:
“You are not feeling that well, but we continue to work. One wonders about everything, maybe primarily on who might buy Saab,” says an employee before he attends the meeting.
DI is not allowed to enter the factory – no outsider is allowed that, says the Communications Department. The staff needs some peace and quiet, and may not be disturbed.
But for the reconstruction team, on whose shoulders Saabs nearest future now rests, times are busy. Since Saab began the reconstruction almost four weeks ago they have worked closely together almost around the clock.
The team consists of Guy Lofalk, lawyer; Jan-Åke Jonsson, Saab’s managing director; Stephen J Taylor, an international reconstruction expert; and Martin Brindley, a specialist on the automotive industry.
– “The beginning was spent trying to solve many practical and legal issues and to get everything in place. We have identified problems and opportunities. We are making progress every week,” says Guy Lofalk.
Jan-Åke Jonsson describes the period as “dizzying”.
– “The first few weeks have consisted of panic-like activities. It has been turbulent. We are not accustomed to working under a reconstruction, so for us it’s a new experience every day,” he says.
– “No wonder that it has been turbulent,” adds Stephen J Taylor. “To put this in perspective, this is the largest reconstruction that has taken place in Sweden.”
Last week saw 750 employees getting the notice at the factory in Trollhättan, with has approximately 4,000 employees. And there may be additional cuts.
– “We have taken the first step and have to take decisions along the way when we see how the sales volumes develop,” says Jan-Åke Jonsson.
– “We need to cut costs and look for new ways to cut costs. We simply must find a structure that is attractive to a buyer and create a strong Saab,” adds Guy Lofalk.
Much of the work that is done aims at untangle Saab from GM and make it independent. The car manufacturer has been highly integrated with the owner-company, with a joint purchasing organization as an example.
– “The complexity of the structure was a bit surprising and is a challenge,” acknowledges Stephen J Taylor.
– “The challenge lies in that we must create an autonomous entity with adequate competence all around to develop new future models,” says Martin Brindley.
Saabs sales figures fell dramatically during the first two months of the year. A loss of 55 percent, of which about 25 percent is attributable to Saab’s precarious situation. But the production rate is nothing Jan-Åke Jonsson will disclose, more than it is adjusted each week in the current difficult situation.
According to DIs sources, Saab is financed through a loan with so-called super-seniority of 1.4 billion SEK from GM in order to cope with the reconstruction phase. At a possible bankruptcy of Saab the loan has priority. A tough liquidity management together with the State wages guarantee have also improved Saab’s finances. And according to the reconstruction team there is enough money for the entire reconstruction period, which is expected to be completed by July.
– “We will get by with the money we now have,” says Guy Lofalk.
April 6 is yet another decisive day for Saab. The preliminary reconstruction plan will be presented at a creditors’ meeting and it will be determined if the company may continue its reconstruction.
– “We see that as a milestone where we can talk in more detail which way we are heading,” says Stephen J Taylor.
The team finds it unlikely that Deutsche Bank, which has been mandated to find a buyer for Saab, would beat April 6. But according to Jan-Åke Jonsson, several parties have expressed interest. Among other things, Chinese Geely confirmed that the company is surveying the land and has been identified as potential buyers of either Saab or Volvo PV. But that is nothing the team wants to comment on. Foreign or domestic is in the end of less importance, the important thing is that there is a long-term owner with financial muscle.
That GM has now declared to be ready to become a minority shareholder in a major new European group in an attempt to save Opel, and thus is willing to give up patent rights, do not affect Saab.
– “We are not in any discussions about being a part of that, we work for an independent Saab outside GM,” says Jan-Åke Jonsson.
What about Saab’s patent rights?
– “Some are owned by Saab, others are at GM. I don’t know what GM thinks of that. In the end it becomes a cost issue and a negotiation on whether they want to release all rights,” says Jan-Åke Jonsson.
“If I put it like this: I don’t think GM will make it difficult for Saab to become independent,” says Stephen J Taylor.
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