Aftonbladets Robert Collin on Governmental responsibility

From Aftonbladet.se today

Who takes responsibility when the government forces Saab out of business?
April 26, 2011, at 11:41 Written by Robert Collin

Why is Sweden so hostile to its car industry?
In no other country in the world a government is actively working so hard to close down its car production. In no other country are people up like a man and chanting “Close the s*it down!”.
Only in Sweden.

I am ready to cry at the total lack of expertise, analysis and wise, long-term decisions.
Where are we going? What’s next? Closing our mines (environmental authorities are working hard on that line)?, close the primary industry? Stop the small-scale fisheries in the Baltic Sea?
But what do we live from then?
Minister of enterprise Maud Olofsson (C) has seriously suggested that Saab in Trollhättan could start building wind turbines! A political speech without factual basis, but which may be an amazing punch when it is the Minister (= government) who says it.
Sweden is a competitive industrial country that stands up well in comparison with giants like Germany and France, both in terms of productivity and costs.
In Germany and France governments do all they can to save its auto industry, they go in with billion in state  aid well before crisis strikes. And no one boasts about the “risking the taxpayers ‘money”, all agree that it is precisely with such efforts, in the long run SAVING taxpayers’ money “.
Volvo sold out to the Chinese entrepreneur Li Shofu. But the tragicomedy of the deal is that the Chinese government went in with the Chinese tax payers’ money to fund half of the purchase. So important did the Communist Party of China believe the deal was.
How long can we allow the government to impoverish Sweden as an  industrial country?
Who takes responsibility for the government wich right now is trying to force Saab out of business?

Thank you to Robert Collin for allowing access to his article.

Cheers/Tom

 

19 thoughts on “Aftonbladets Robert Collin on Governmental responsibility”

  1. Google Trans.
    “Saab factory personnel must komen’DINSDAG APRIL 26 2011, 15:09 pm | 512 reads
    STOCKHOLM (Reuters) –

    More than 3400 employees of car manufacturer Saab, owned by the Dutch Spyker Cars shall Wednesday to come Trollhattan plant in Sweden. They were here ‘important information ‘ gain.

    Saab employees that have confirmed Tuesday. None of the official spokesmen of Saab yet to say something about the tenor of the meeting. This would begin at 07.00 hours.

    Source: http://www.beursduivel.be/nieuws/105352/Saab-personeel_moet_naar_fabriek_komen

    • I 100% agree.

      Volvo is doing better financially, and is simply financially secure. they are being innovative again (believe it or not) and just being…Volvo. Versus Saab, which has to worry about money issues because our pride is in the way of letting a chinese company own us??

      Love VM, love VA, love Saab, but many will agree that Volvo got the better end of the bargain to me…

    • Yup, his silence (and while far from attention-seeking, he has been pretty outspoken) proves there was an intense desire on his part to get out of the deal. Same for the last-minute exit of the CFO candidate.

      I do believe some kind of extreme restructuring is in the cards, but if anything, I believe it’s for the better. With all due respect, it can hardly get any worse.

  2. I honestly just want BAIC to come take saab over. Enough is enough already. We need financial stability. Antonov has great intentions, and so does VM, but I would feel more comfortable if they acted as management and NOT financiers or angels.

    Call up BAIC, tell them you want to further your agreements, get their money to pay off the EIB, and tell the swedish government and the EIB to take a hike.

    Then unite Spyker and Saab again under the same unbrella with VA running Saab and VM running both companies.

    Honestly, BAIC is simply our friend now, and almost certainly wouldnt undermind the relationship with us at this point in time, especially if they want our old technology to keep floating down to them.

    I pray a chinese company (if not BAIC) comes to the rescue, and fast, because this is getting out of control. And im afraid with all the money transferring and selling, and debt piling up, the NG9-3 and 9-4x won’t substantiate enough cash flow for the company to continue…then we are back to square 1.

    Either way, I still believe that Saab will NOT fail. Too many interested people to let Saab fall through the floor.

    • Well, I guess I am not praying for BAIC, but I am all for more management and less “financing”. There was more financial engineering involved than you would need to write a PhD in finance so far, and it seems that very little new was done on the actual operations side of the business. I do believe Saab needs totally the opposite.

  3. Well, I’m not quite sure, I think that the population of Sweden is almost 10 million.
    There Sweden nation has had come up with many innovation, that have had a great influence on people throughout the world: IKEA, SCANIA, and others.
    But, the Swedish Auto industry has not been quite successful. SAAB has started in 1947, so it has been operating in the market for almost 60 years. It has never been profitable, SAAB sales couldn’t generate sufficient revenue that would keep the brand alive. Relying of debt has not helped the car to prosper. SAAB survive for 20 years with SCANIA and GM, but couldn’t survive for more than one year with the current setup. Therefore, from the point of view of business, declaration of bankruptcy, and shutting down SAAB is not a bad idea.
    As long as Sweden’s have had the know how of making such great cars, why wouldn’t they start again from scratch, i.e., initiate “A NEW BRAND”. This could be achieved by changing the strategy, setting new visions and missions, new marketing strategies, arrange for stronger financial instruments. .
    On the other hand, the Scandinavian heritage would not be preserved, or it would be lost.
    In my point of view, any business that relies on long term debt doesn’t succeed in the long term. Anyways, It’s up to SAAB to find its way out of its crisis.

    Thanks,

    • Osama,

      Commentators on Dagens Industri and similar sites usually state (usually without any references) that SAAB hasn’t made any profit for the last 20 to 30 years. Now you claim, with the same level of credibility, that it has never been profitable at all. Does it mean that this car factory has been essentially operating as a charity, giving free money made of nothing to its workers and management, for whole six decades?

      Please reveal your sources, otherwise we can safely dismiss your comment as argumentum ad nauseam. Or as Christopher Hitchens once wrote: “What can be asserted without evidence can also be dismissed without evidence.”

      Daniel

      • Dear Daniel:
        I’m not intending to be offensive to SAAB. SAAB might have been breaking even, or even making a relatively good profit. But, that was not good enough for SAAB to flourish and prosper.
        In my point of view, there is one similarity between the Swedish “SAAB” and the American “Harley Davidson” is that both of them are individualistic or “QUIRKY” and represent a unique culture. Even both of BRAND are small size enterprises.
        For instance, a biker in his/her late thirties or fourties would pay extra cash to buy a “PREMIUM” bike like “Herley”, and would consider it as a better option than BMW, Honda, Suziki, Kawasaki, or even the classic Indian vintage motorcycle.
        But, SAAB’s case might be different. Perhaps “SAAB” might not have been making the “Premium” cars that they should have been doing, therefore, SAAB could neither compete with the other more success German brands like: “BMW”, “MERCEDES”, “AUDI” nor even the premium Japanese: “LEXUS” & “INFINITY”.
        Perhaps the annual sales of SAAB: “30,000”, “80,000”, “120,000”, or what ever it is, might be much less than the other manufacturers. Therefore, SAAB could neither generate sufficient funds to invest in Research & Development to maintain its “Product Differentiation” nor SAAB could compete on “Cost Advantage” due to its inability to achieve sufficient economies of scale to reduce the cost of its production.
        The questions that would be raised are: Why has SAAB started small and remained small? Why did SAAB lose its independence before the era of SCANIA or GM?; What has brought SAAB to its current situation? What are the lesson leaned from the past? and What could be done in the future?

        SAAB might not have manage to align its micro environment with that of its macro environment. Perhaps the SAAB must have been trying to penetrate and compete in the “WRONG” market, maybe its competitor’s did not allow SAAB to enter into their “PREMIUM” market. It would be a good idea for SAAB to review and reconcile its market segments and its pricing strategy.
        For example, In UAE Dubai, the estimated price of a new SAAB 9-5 2012 is AED 180 K, and the price of 2012 Mercedes E200 CG1 is the same. In SAAB’s current situation, the customer will surely go for Mercedes without thinking, even though SAAB might be better.
        In my point of view, SAAB is over priced. The price of a new SAAB 9-5 should be in the range: AED 90 K to AED135 K] but not AED 180. This proposed market segment is where I think “SAAB” or SAAB 9-5 needs to be positioned to compete with: TOYOTA CAMRY, HONDA ACCORD, NISAAN ALTIMA, , RENAULT SAFFERANE, PEUGEOUT 407, CITROEN C-5. What I mean to say, the market of: “BMW 5-Series”, “Mercedes E Class”, “Audi A-6” is not SAAB’s market. The same should be applied to other product range of SAAB.
        Finally, I have owned several model of SAAB before, and I think that SAAB is somehow complicated that its a “TROUBLESOME” car, and its quite expensive to own and maintain. Perhaps it would be a good idea for SAAB to focus on serviceability, “Reliable”. To make a “Trouble Free” that would not cost much to keep and maintain.
        This could be obtained by focusing on the global “Customer’s” demands, and not on what the firm could make and deliver, e.g., “Heated Seats” are required at Sweden, but “Cooled Seats” are required at GCC countries. Front wheel drive is required for slippery Nordic cities, but, Rear wheel drive is required for people who would like to “DRIFT” in their cars, and so on.

        Sorry for prolonging the message,

        Thanks ,
        Osama

        • OK, so you would like your Saab cheaper. Well, who wouldn’t, but to say the company is going to fail because Saab is not as cheap as you would like it to be?

          I’ve paid the regular price for a Saab and still had a great deal over comparable BMWs, Mercs or even a Skoda Octavia. If you factor in the great engine (TTiD), the seats, the ergonomics and the kit I got standard (and my Saab is FAR from loaded), I still believe it is worth more than I paid for it. Plus you get incomparable driving experience, excellent roadholding and, on average 25% more time (that I save by getting to my destinations faster, and I do mean it).

          If anything, Saab should move from lower-rung Audi to Jaguar territory, where they belong. The original 900 was priced above BMW, and outsold it – because it was a way better car.

    • Ikea: Is a in the Netherlands registered holding, has Dutch headquarters and global training facilities (there’s not much Swedish left there, just the colors yellow and blue)
      Scania: Most owned by Volkswagen en MAN

  4. Thanks, Robert Collin!

    Aslo the Swdish media is usually very hostile towards Saab, so it means a lot to also have a few exceptions there.

    I think Saab have been doing their part in developing great new products and they have Antonov seeing the potential (in Russia and worldwide) of this product line and wanting to do all the things that the government do not want: Assisting with money and going in as part owner. So indeed, if the government and EIB just had let Antonov in (long ago) then production would still be running and no sign of this crisis, and then perhaps some new collaborations with the Chinese, seeing a big potential in the car industry and wanting to do new investments.

    But oh no, this is Sweden, so Antonov and his money is constantly rejected, thus making Saab low on cash, then the two day closedown, media going crazy making all (or several/most?) suppliers even more nervous and turning against Saab, gorvernment andthe EIB still refusing to let VA in to solve the immediate crisis, instead forcing the factory to shut down for at least three weeks, causing huge losses and situation getting worse every day.

    It would be truly sad if the government, EIB and much of the media succeeds in their efforts to spoil all Saab’s chances to secure financing and go on. Perhaps teh last “hope” then would be that, say, Antonov or some cinese company bought the remainders and the intellectual properties and restarted abroad, but that would again be truly sad. Fingers crossed for Muller & guys to get Saab out of this crisis too.

  5. Considering all the negativ criticism that has been floating around the mainstream media for several month now, it is nice to see some positive – or atleast objective – input also. I follow the Saab Group’s affairs also with great interest – in particular the aeronautical part with Saab 39 Gripen at the center – and I’m sad to witness equally poor journalism covering them as Saab Automobile in the mainstream media. Fortunately there are a few professional journalists and media still around in Sweden today (Ny Teknik and Mentoronline to name two), but regretably their readers only make up a few percentages of the “customers”.

    I am absolutely appauled by the current swedish government’s complete lack of interest in the manufacturing industry in general and the automotive industry in particular. They are more willing to finance unsure support programs for the region than give Saab and the automotive industry some real support. When you take into account the fact that the government gave the banks – who truly mismanaged their affairs – enormous and generous financing with a complete lack of any demands or any concern about the taxpayers’ money, I think it is extremely upsetting to hear Maud Olofsson talk about Saab in terms of the government not wanting to operate car factories.

    That is the least skilled and most unsympathetic swedish politican I had the unfortune of having to listen to in a matter I had great personal interest in. One can only hope that in some small way the key government decision-making players will in the end of this suffer some kind of negative and sizeable personal impact for their respective parts in this violation of the nations interests, backbone and history.

    It is an absolute shame what is happening in the automotive industry right now, in respect to Saab and their subcontractors!! The responsible parties deserve a tarnished reputation for their involvement.

    /Disappointed in the choice of political parties to rule Swedish government.
    /Disappointed in mega-wealthy people and well-positioned swedish corporations’ lack of business vision for the possibilites that Saab offer.
    /Disappointed in the Swedish people’s lack of interest and knowledge in the Saab affairs.

  6. I wonder if the building turbines comment has anything to do with being part of a green political party, and being against cars. It seems ridiculous to me, but living in a heavy bicycle area, I’ve heard more than a few people voicing radical tactics to deter automakers from making cars and consumers from buying them. I’ve no idea what the agenda is–or if there is one. They might just see Saab as a bit of fat they’d like to trim away. Or hold no particular bias against Saab at all. Simply from an economic standpoint, it seems like a good idea for Sweden to invest in Saab.

    Also, I don’t see Victor Muller going to BAIC (or similar) to secure the funds. Saab hasn’t been independent for very long, and they’ve worked damn hard to dispel any rumors/negativity about their demise. They’ve accomplished a lot, and I don’t think they’ve received the credit they deserve. It seems pretty ridiculous to have come so far and fought so hard just to have it end now, like this. Plus, it sounds like GM is what’s holding things up.

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