A lot of positive press has come out of the 9-4X test drive that took place over the last four days in the Capital of what will be its largest market, the United States. Journalists impressions are forthcoming, but from what I’ve heard most were impressed and consider it a true competitor in its segment. We’ll certainly be covering all of their accounts in great detail here in the next few days. But in the hours since the reporters packed their bags and went home to write their articles, it appears that the first waves to be felt from the event are more about the management and company itself than the products which it sells. In regards to this, I’d like to take a minute to debunk and rectify what I see as a fair bit of sensationalism.
Victor Muller was able to fly into D.C. for the gathering, and joined the new President and COO of SCNA, Tim Colbeck to reassure reporters that even though Saab made some pretty big mistakes, they’re learning from them are acting immediately to rectify the situation. Chief among the missteps that led to the parts shortage was misjudging the level of tolerance their suppliers would allow. Thecarconnection.com quoted Muller from his presentation to the press in Georgetown on Monday.
“Unfortunately on the 29th of March we called the bluff of one of our suppliers who said that if you don’t do what I want, I’m not going to open the doors of my truck, and if I don’t open the doors of my truck, you’re not going to get the parts. Well, he was serious, and we screwed up. Because it caused a production stoppage of two hours.”
News spread quickly in a media environment that had already taken a very critical slant about the automaker, Muller explained, and the troubled quickly multiplied.
“Within two hours of that stoppage, we didn’t have one supplier with a problem. We had 92. And that started to completely unravel it,” recounted Muller. And soon, 20 million euros had turned into 90 million euros.
At the same press gathering, the Hawtai deal and the subject of Chinese production inevitably came up. This is where misinterpretations start to fuel a non-story and it turns into a fire, I’m hopefully getting to it with a fire extinguisher before it gets any further. Victor spoke to Rick Kranz of Automotive News about what he sees as a sure thing and most analysts are even placing bets on– Chinese cars reaching American shores. Unfortunately, quotes as they usually do have not only been taken out of context but completely sensationalized by other news agencies, from thetruthaboutcars.com to leftlanenews.com. In the Autonews.com article, Victor makes a case that it’s only a matter of time before China infiltrates the US market.
“We laughed when the Japanese came,” said Victor Muller, chairman of Saab Automobile AB. “We laughed when the Koreans came. But we will not be laughing when the Chinese come. The Chinese are like a steamroller.”
…Muller stopped short of saying Saab will distribute Hawtai’s vehicles in the United States, Europe and elsewhere. But he said Saab’s global distribution network will be tempting for Hawtai. If an agreement is approved, the vehicle line would be distributed separately from Saab under the Chinese automaker’s name.
In other words (and from reports of people that were there who actually heard how the actual conversation went), Victor is simply stating the obvious, that the Chinese are eager to find a way into the US market with the right strategy. As I reported last week and backed up by GM global sales head Nick Reilly, they’ve made incredible advances in their production capabilities and now have some of the most modern factories in the world. For a company like Saab that has a strong foundation but limited reserves, why wouldn’t they want to leverage their best assets to ensure their continued survival?
“It took 67 years to build up our dealer network. It is the biggest asset not on our asset sheet, and these guys buy into it for free,” said Muller, who was interviewed during a press event in Washington, D.C.
“If they make the proper cars, can you image how much simpler it will be to push product through the distribution network that is already there? It is like a railway network that is already there.”
Muller said that it is possible Saab could be the distributor for a Chinese-built vehicle that sells for around $10,000.
Asked if this would be a vehicle produced by Hawtai, Muller said “there are 120 companies” in China. Saab would be interested in “the one with a strategy,” he said.
No, Victor didn’t just reveal that Saab is ready to make a deal to import Chinese cars to its dealers, he was merely suggesting the conditions that would be necessary for such a situation to arise. What you have in those quotes is an example of what Victor Muller does best, throw a cog in his skeptics’ gears to show that Saab will do what it takes to survive and reach profitability. Did he outright say that any of this was in the works? Of course not– he was putting the word out that Saab is stronger than those who wish it dead give it credit for and has more assets than are simply on its balance sheet. At the same time, he’s once again changing the conversation and turning the typical automotive production paradigm on its head– a small company like Saab given the proper approvals can do some rather big things to the market. I can imagine that if a Chinese company “with a strategy” as Muller says, priced and built a car right, it would be an incredible boon for independent Saab dealers who have had a hard time making sales for the past few years. Of course that car would have to pass all safety and regulatory tests to even hit the market, but the sensational headline “Saab Recasts Itself As Auto Industry’s Answer To Walmart” tends to get more clicks and generate more revenue (which is why if you want to read it, I’m letting you find it on your own and not linking to it here). I understand a writer’s temptation to be funny or insightful in a headline, or passively sourcing an article based on an out of context quote to piece together a non-story, but such negativism is really getting tired.
I know what many of you will say– that the US government will never approve such a deal or that lobbyist groups might block it before it even gets off the ground. I’m not going to disagree, the idea is at best embryonic and certainly has been vetted by every major automaker before. I also know that some will suggest that Victor should have just stayed on topic and talk about the 9-4X at the event. But that he actually has the gumption to suggest it in public shows he’s dealing with the reality of the elephant in the room, that Chinese cars are rapidly improving and that Saab isn’t going to sit idly by while some other company steals the opportunity of cashing in on the opportunity. You have to give him credit for that.
As I’ve been saying since I saw him a few weeks ago in New York, Victor has taken a very humble approach to the cash crunch, and is not only apologetic about the situation but is taking the blame for most of it.
“There’s only one person to blame for this, and that’s me; because I should have been prepared,” (he told reporters in D.C.). “It should have never happened. But it did.”
And that’s really at the core of this whole mess. Victor Muller, despite his incredible work ethic, his astounding intelligence, and his charismatic personality, can’t save Saab by himself. Since the Koenigsegg deal fell through in November 2009, the man has quite literally not stopped fighting for the company that he helped rescue. His optimism fueled the deal, allowed GM to sell Saab, and went a pretty damn long way towards boosting sales back to GM levels, despite a deluge of bad press. But that optimism is simultaneously a blessing and a curse– while many of us in the Saab community have embraced Victor’s words, for those rigid individuals who expected all of Victor’s promises to happen overnight, the fact that *gasp* some might be delayed a few months is enough for them to walk away from the company and declare it a lost cause. Certainly if you read casual commentary about Saab in any of the articles on other sites, you’ll see that negativism prevail.
I’ve read a lot of this negative commentary the last few days, especially coming out of Sweden. To those who want to cast Saab in that light, I want you to step back from your monitors, newspapers, and television screens and try to remember what Saab has been through since GM cast them aside, and ask yourself what would have happened to the company if Spyker hadn’t stepped up to the plate? Do you think that anyone else besides Victor Muller could have been able to pull as many rabbits out of hats to make these deals happen, in the face of so many doubters? While you’re still thinking back to 2009, try to recall all the press outlets saying that Saab didn’t stand a chance to make it a year, that no small car company could ever survive in this business climate, and then read the same press outlets explain that Saab’s business model might just have a shot. The reason they’re changing their tune is because of Victor Muller’s vision.
Yes, Victor makes bold statements, yes he sometimes speaks in hyperbole, and absolutely he sees things in a more favorable light than most any Swede I’ve ever known. But without that vision, I don’t think Saab stands a chance. It’s that same outlook that gives his closest business partners enough confidence to invest in the company, that convinces executives like Tim Colbeck to leave great positions with solid companies like Subaru to take jobs at Saab. As Tim said in his interview filmed on Monday, “Everything that Victor said, he’s kept his word…it all has happened the way he said it would happen. And what’s interesting about the man is his passion for the brand and his passion for cars…it’s infectious.” It’s the same vision that the Swedish NDO has said they believe in, that they backed it with the guarantee of the Swedish crown. It’s because the business plan isn’t even that optimistic, it’s based on solid product and has several very powerful groups staking their fortunes on it, not the least of which is Hawtai, a company that has more recently made conservative plays like on the Bank of Beijing.
Victor Muller is and has been essential for Saab, no matter many different ways you try to paint the picture. If you truly care about Saab, if you really believe that its cars are different from anything else on the road, then you have to have the same faith in the cars that it sells. By that same logic, it makes sense that you should there be a few month delay in the business plan, you’ll stand by the company. Hell, I wanted to buy a 9-4X two years ago, but the uncertainty of the sale process meant that I couldn’t. Guess what? In the meantime our current car held up just fine, the wheels didn’t fall off, and no other CUV was introduced during that delay to make me question our decision. We even saved some money in the process by waiting. Should the next 9-3 be delayed because of the liquidity shortage, I’ll still be first at my dealer to put in an order once I’m able to. Now isn’t the time to start questioning Saab’s chances.
While I’m aware I’m preaching to the choir, what I’m hoping is that the external skeptics or journalists who occasionally read SU stop nitpicking every little detail of what Victor says and start to consider the big picture. Whatever happens with the Chinese partnership, rest assured it’s happening for a reason and that Victor, Vladimir, and other management at Saab think it’s an essential part of the picture. They have high expectations for Saab, and when goals aren’t met it doesn’t mean that the company isn’t on the right track. When a milestone is delayed, when the business plan doesn’t fire on all cylinders, or when a fork in the road like Chinese partnership opens up, don’t try to use it as an example of why you think Saab is bound to fail. If history shows us anything it’s that Saab will do what it takes to survive. Give Victor Muller some credit for what he’s done and let’s pray that he is able to quickly assemble an executive team that can keep up with his own lofty expectations. The patience and optimism most have shown at SaabsUnited has been needed and helpful, let’s all continue to exhibit it while everyone at Saab does their best to teach the company to walk once again.