Buckle up. This is a long one.
The announcement today that General Motors have reversed their decision to sell Opel sent a minor shockwave through the hearts of many Saab enthusiasts. For a moment, however brief, there was most likely a thought in many a Saab enthusiast’s mind that this could happen to Saab as well.
As Robert Collin pointed out, there is a lot of promise in this brand with one new model variant just released and another three coming down the pipe at a rapid pace. They already have the systems in place and the cars are just around the corner. Why not reap the crop they’ve sown?
I don’t believe they’re going to do that and even more, I hope and pray that they don’t.
The news also gave some people a chance to re-evaluate the sale of Saab to the Koenigsegg Group and ask themselves who would they rather see owning Saab – GM or Ksegg?
I’d like to present a case for Koenigsegg, just from one enthusiast’s perspective.
The honeymoon’s already over.
When the sale to Koenigsegg was announced, I can honestly say it was a surprise. There were three groups who met in Geneva back when the decision for a preferred bidder was made and I gave the other two – Renco and Merbanco – a greater chance than Koenigsegg. I’m on the record here so I won’t try and paint over what I thought: Merbanco were my personal favourites but I thought Renco would be the one to go hardest and win the day.
That was the first time and hopefully the last time I would ever underestimate the Koenigsegg Group.
I remember waking up, reading about 10,000 emails in my inbox and then basking in the warm glow of knowing that my future cars would be related to some of the most exotic and desireable cars on the planet.
Of course, reality set in over the next weeks and months and we all came to realise that a sale to Koenigsegg was no easy ride.
If we thought they’d get an easy ride with the Swedish government just because they’re Swedish-based themselves, we were wrong.
If we thought they’d have plenty of money at hand just because they sold mega-expensive cars to mega-wealthy people, we were wrong.
If we thought their high-level position in the automotive market would guarantee high-level communication and PR skills, we were wrong.
The honeymoon began with explosions of splendour and fantasy but whilst some of the lustre remained, it became pretty clear, pretty quick, that this was going to be a tough fight, and that’s just to get the deal closed. The ordeal of building and selling cars would then start.
When GM announced that they were going to sell or close Saab, automotive thinkers all around the world gave Saab a miniscule chance of finding just one realistic buyer, let alone multiple buyers. It turns out there were a number of parties who saw the value in a distinct brand with a good manufacturing facility, strong (if weakened) identity and products that were almost ready to go.
What’s exciting for me as a Saab enthusiast though, is the confirmation of something I’ve felt for a long time – that the people at Saab believe enough in themselves, their identity and their product, to stand up and prepare themselves for this situation.
Here’s what I think…..
Saab, as hard as they might have tried, never really fit into the GM family. GM, as hard as they might have tried, never really adopted or understood Saab. It’s my understanding the Saab’s former CEO, Peter Augustsson, left his position with the company because he saw the writing on the wall; GM were going to come in and take the reins firmly in hand. Saab already had lost a large portion of its distinctiveness by 2005 and any hope he had of steering the company back to a place of uniqueness was going to be squashed under the powerful fist of one particular product guy at GM.
Augustsson could leave, but others didn’t have his options. They relied on Saab for their livelihoods and in order to keep the company going, they would accept whatever it was that they had to do in order to keep the future alive. Did they accept this situation willingly or did they accept it begrudgingly?
I have a feeling that they saw the logic in some of the things GM did, but they also – like many of Saab’s enthusiast family – had their hearts broken to some degree. This is just my feeling, but there was an undeniable pride evident at Saab’s 60th anniversary celebrations in Sweden back in 2007. That this little company had survived 60 years, or even just the previous 10 years in a modern automotive world, was a fact that was not lost on anyone present.
There had been a lot of loss, but they had survived and lived to tell the tale.
So when GM announced that they were going to either sell or close Saab by the end of 2009, I think that provided a lot of fuel for the people at Saab. They were the smallest of small companies, but their plant was efficient, their range was about to expand and their pride and sense of identity was quite likely about to explode.
They could have listened to the doomsayers and the journalists who figured that a minnow like Saab could not have survived. They could have dutifully shown people around but accepted that the likely course after any sale would be the strip-mining of the company for parts.
They did none of that.
Instead, and inspired by a calm and controlled leadership group, they set about selling a vision for the future of Saab. One of specialisation, distinctiveness, innovation and success. They were a Swedish company in both geography and character and if this was going to be The End, then it was going to be an End on their terms.
So Saab even surprised GM when they filed for reconstruction. They were not going to just take the possibility of things ending on December 31st lying down. They were going to do everything they could to ensure that Saab had a future.
A new beginning is necessary sometimes
The thought of Saab staying with GM now is about as unimaginable to me as the thought of my dog Charli riding in the 2010 Tour de France.
They have been given an exit window and whilst they obviously respect GM’s size, resources and the sheer fact that GM kept The Saab afloat until now, it’s clear that they were going to head for that exit window at a turbocharged pace.
I’ve been writing this Saab website and its predecessor since February 2005 but it’s taken the events of the last 12-18 months to fully understand what’s happened to Saab in the last five to eight years.
Early in that period, Saab had a full product portfolio lined up under the guidance of Michael Mauer. The vision started with the Saab 9X concept vehicle and the first car to be realised from that group was the Saab 9-3 Sport Sedan. The trouble was that Saab hadn’t played GM corporate ball. They’d spent too much and (difficult as it may seem to believe) they’d made the vehicle too distinctive. The 9-3 was only capable of production as a Saab and only in Trollhattan.
The wider 9-3 portfolio, believed to include a coupe and a hatchback model, was scrapped and whilst the convertible appeared on schedule, it was a full three years after the release of the Sport Sedan until the SportCombi was released.
Saab were due an all-new 9-5 model around 2005. This, too, was killed off and the Dame Edna 9-5 was rushed through to extend an already old car’s lifespan.
It’s my understanding from various conversations that these decisions all came with the encouragement and at the behest of one Robert Lutz, better known as Bob to all you folks. This one guy personified the attitude of the GM board towards Saab; they were always going to be the odd ones outa dn they were always going to be a distant and small figure on the priorities list.
I had it explained to me this way by a very loyal and upstanding member of the Saab USA team one day: GM’s brands were all like kids that the parent wants to send to college. Going to college is expensive business, though, and they can’t all do it at once. Saab’s time will come, but it’s not here yet. And if I was seriously advocating that GM should put Saab before Cadillac then I better learn the ways of the GM world. It’s just not going to happen.
Is it any wonder, then, that a Saab company faced with the real prospect of being sold from this corporate parent would take that opportunity with both hands and give it as much life as they could?
The prospect of a reasonable degree of self-determination and creative freedom must be like an oasis in the desert for Saab.
Better the devil you don’t know
Despite the fact that the reasons for leaving are overwhelming, one must also look at where you’re heading. What if the grass on the other side of the fence turns out to be Astroturf?
Koenigsegg themselves are a small company. Many are inclined to think that the Koenigsegg Group have less to recommend them than what we first thought. They lacked funds and their management experience has been called to question on several occasions (and not without cause).
But I’ve seen enough of the Koenigsegg Group people, both in the news and in person, to feel a lot of confidence and hope for the future.
Whilst resources have been an issue, things have come together. This sale has faced a number of obstacles along the way and money has been chief amongst them. The Koenigsegg people have hung in there, though, and it’s working out.
Management experience has been an issue, too. But don’t forget that Saab has an experienced management team in place who can run a car company. What Koenigsegg might lack in terms of big-automotive management experience, they more than make up for in drive, enthusiasm and spirit. That might sound a little touchy-feely for some of you, but I think people who underestimate them do so at their own peril. Much like Saab themselves.
Say what you will about the bumpy ride that it’s been so far, but Christian von Koenigsegg and Bark Eker have a habit of getting things done. Same for Augie Fabela from what I’ve read so far, too.
The fact that these guys have managed to get selected as preferred bidder, managed to complete due diligence and sign a share purchase agreement, managed to get their loan approved by the EIB and even managed to get favourable comments about it from the Swedish government should tell you something about getting things done.
Identity and focus
Finance and management are one thing.
Designing and building a darn good Saab that we can all be proud of is another thing all together. And it’s here that I have absolute faith in the Koenigsegg people.
Saab is a Swedish car company. I have absolutely no doubt whatsoever that given the chance, Koenigsegg will maintain and improve on Saab’s unique place in the automotive market.
They know cars and they know functional design. Have your doubts about management and finance but know this – if Saab go down, they will go down swinging.
elephant Panda in the corner of the room
Of course, one of the consequences of not having all the finance themselves is that the Koenigsegg Group has done a deal with Beijing Automotive. It’s believed that BAIC have agreed to buy a stake of around 20% in the Koenigsegg Group and that that’s enough to get the tick from the Swedish government on the deal as a whole.
Whilst I wouldn’t be happy with total or majority Chinese ownership – to remain Swedish is an integral part of Saab’s identity – I think this partial sale has the potential to bring great benefits to Saab.
Those benefits are a financial base that lets things get off the ground, a chance to increase that financial base through selling rights to older models for Chinese manufacture, a chance to expand Saab’s exposure in what is now the world’s single biggest automotive market, and eventually the chance to manufacture vehicles locally for sale in the Chinese market.
Those are the benefits. There are also some reasons for people to object.
Beijing Automotive, whilst run as a distinct entity, is essentially a state-owned company and there are a lot of people who don’t like the Chinese state and the way they do business (or other things).
I’m going to take a practical/philosophical line on this.
I’m interested in the survival and prosperity of the Saab car company. I don’t have the will, the time or the brain power to evaluate and apportion X-amount of China’s activities – their real activities, not the hearsay – to one relatively small company.
If Beijing pay their workers a living wage and they advance the cause of Saab in their country, then I can live with that.
A brief anecdote:
I remember when I was younger, listening to a preacher from the US. His name was Tony Campolo and he was talking one time about a sermon he gave at a church somewhere. He was telling the congregation about something, probably forgiveness, and in doing so he was going through and listing off all the bad things he’d done during his lifetime. Campolo could see the faces in the congregation contorting with shame on his behalf and many of those people were probably wondering whether they should even be listening to such a seemingly wicked man.
I can’t remember exactly, but Campolo said words to this effect.
“I know what you’re thinking. You’re thinking ‘Wow, I don’t know why I’m listening to this guy who’s done so much wrong in his life.’ Well, you know what I’ve done. If knew everything you’d done I probably wouldn’t be talking to you!”
The point: China most definitely isn’t squeaky clean, though none of here at this website know if any of their sins have manifested in the corridors of Beijing Automotive. But whilst we sit in judgment, remember that our national houses aren’t squeaky clean, either. None of them.
I’m happy to give BAIC the benefit of the doubt and live in the hope that as the West does more and more business with China, that both sides will move closer to one another and lift each other’s standards.
It’s about the product, stupid.
As always, car companies will live and die by the quality of their products.
This is why I’ve got confidence in the future of Saab. They’re going to get a chance to show us their products in the future and I’ve got no doubt that Saab and the people at Koenigsegg will pull out all the stops to make sure that the product is worthy of the one-in-a-million chance they’ve got at producing it.
And the bottom line – Saab lived off crumbs from GM’s table for over 10 years. They had their range pared back from what it could have been, had their technology used but not rewarded, had their people spread far and wide and put in places where it would be difficult to get them back.
I can no longer imagine a situation where that could possibly be seen as acceptable again. Personally, whilst I can respect GM (if I really try) for keeping Saab alive, I’d prefer to do my respecting from as far away as possible.
The Koenigsegg Group have a lot to live up to and Saab have a lot to live for. I hope, but I also believe, that they’re both up to the task.