Saab’s debt – my personal view

Earlier today it was reported here on that Saab’s debt at the Swedish Enforcement Agency has risen to 27 million SEK. I’d like to put it a bit into perspective here.

Translated to EUR these 27 million SEK are about 2,96 million and devided by the 51 demands it’s a rough average of 58.000 EUR per case. So depite this is a bit of money for a normal person like me it’s still a rather small amount for a company of Saab’s scale. Don’t want to go into speculation too much as all facts I have are from that short article. The first idea one might have is that Saab simply doesn’t have the money to pay that, but I personally don’t think it’s that easy.

Given the sum I’d say that we are talking about rather small suppliers. As we know Saab is currently still in negotiations with many of them. Even during those ongoing negotiations some suppliers may want to increase the pressure in those discussions by demanding their money via the SEA. The way some part of the press reported about Saab recently may also encouraged some creditors to take that step. Business in every scale has quite a lot to do with confidence and we’ve already heared that suppliers want to make sure that Saab’s future is secured. They may hope for the best and prepare for the worst. The other thing is that as I can tell you from the experience of running a company myself there are always some disputable demands that you won’t pay before everything is cleared and you’re satisfied. It could easily be a big amount of the sum that belongs to that last point.

And after all we don’t have an idea who those creditors are. So to really understand this piece of information we would need to know a lot more than we do. So if you ordered a car just recently because you had trust in Saab there is no reason to be afraid now. The real reason this report came out is, like with many others, because of all those eyes staring at Saab right now.

Of course this is just my opinion but I think the best we can do is just keep calm and carry on until we know more facts.

58 thoughts on “Saab’s debt – my personal view”

  1. Don’t know if this is new news or not found on the web earlier,,
    Russian investor Vladimir Antonov is no longer to take part in a sale and leaseback deal of the property and plant of Saab, which had been aimed at raising funds for the car maker, his spokesman said on Tuesday.

  2. I think it is high noon for Saab. There are several holes where apparently money is lacking – unpaid supplier bills, tax bills, other. This situation is damaging the brand and the image of the brand in a big way. Keep calm and carry on might be okay for a fatalist, but not the right thing for a true Saab supporter. The consequence of all that is that the operation was underfunded in an insane way. It has to be signalled to the owners, that there is urgent need to recapitalize the operation in a much more profound way. Part of it is designing a business plan, that is not based on dreams and hopes, but on realistic assumptions, and furthermore tackles the obvious weaknesses of the operation in the most efficient way. Being loyal to the brand does not mean being quiet or not critical to the financial and business operations and decisions of the owners of the brand.
    What is good with respect to this week’s announcements, is that the owners have been ready to give up majority in equity to new partners. I cannot guess about the quality and potential of the new partnership in China, but at least on surface it looks promising. Strategically, it does not address three things:
    – It is a non-binding MoU, that will require 3 months – or more – of being finalized and approved. Given what happened with the deal with Hawtai, this does not relieve the uncertainty surrounding Saab. Thus, Saab order intake will be restricted for another three months, and sales will disappoint for the full year.
    – The new capital arriving is clearly insufficient to resolve medium- to longer term funding needs, given what a reasonable business plan would look like. What is lacking in Saab’s communication, is the explicit willingness to design a new business plan, and the collective understanding of the – old and new – shareholders to put at disposal the capital needed to ensure its success. That is the key for a success in order inflow and sales for 2012, and for the future of the brand beyond.
    – What is urgently needed is short-term money to survive the next few months and to restart production on a sustainable base. That is the highest priority immediately. More weeks of production standstill will just end the patience of stakeholders – suppliers, leasing companies, dealers, customers, authorities.

    • The operation is only “underfunded in an insane way” because the b*st*rds at the EIB can’t be bothered to let Antonov in. I don’t have enough info about the situation to determine whether Muller and his cohorts should have been able to anticipate that it would take this long; but instinctively I would say no. How could anyone guess that the EIB would just sit on their collective behinds for month after month?

      Short-term funding is therefore lacking primarily because of the EIB. Long-term funding – well, maybe a combination of a Chinese deal like the one proposed and some more serious Antonov money would still not be enough. But it would at least be a good start. And that money would have gone a longer way, with more revenue being generated by car sales, if Saab’s reputation hadn’t taken additional blows because of the short-term problems.

      So in summary, I blame the EIB! 🙂

      There are lots of things to blame Muller for as well, of course. This new idiocy of announcing a holiday of only two weeks without first checking if the suppliers are willing to follow suit is just the latest in a long row of poorly thought-through decisions from VM. But even so, that’s not the major reason for the difficulties. And Victor also deserves some praise for his amazing ability to come up with new deals every time the old ones fall through.

      • “How could anyone guess that the EIB would just sit on their collective behinds for month after month?”

        The EIB is basically a European community institution. They’re led by bean counters and there is a lot of dirty politics going on (interest groups, etc.).
        So yes, I expected this to happen from the beginning.

        • Btw, I’m not saying that EIB is the evil empire, just that you can expect it to be as slow as any other government run institution.

          • Remember the last press release from EIB? Read it again if not. They clearly say delays are much due to changes or uncertainity in the (owner) structure made by Saab / VM them selves. How could EIB possibly act different with regards to Saab than to any other company being processed by them. Saab is on the edge of bankrupcy and of course EIB, GM and all involved are extra carefull.

          • Swedish Automobile is a publically traded company. Ownership changes every day, without having to be pre-approved by EIB.

            Can you demonstrate that other banks show similar concerns as their customers change their ownership structure..?

            Besides, the biggest problem is that they seem to take forever to decide. Time is of an essence here, and they have known about Antonov for two years now.

            There is no downside to EIB if Saab disappeared from the map tomorrow. EIB’s money is not at risk in any scenario.

      • “The operation is only “underfunded in an insane way” because the b*st*rds at the EIB can’t be bothered to let Antonov in. I don’t have enough info about the situation to determine whether Muller and his cohorts should have been able to anticipate that it would take this long; but instinctively I would say no. How could anyone guess that the EIB would just sit on their collective behinds for month after month?”
        I have no specific information; but if I should speculate, as everyone else seems to be doing, it could be that the EIB is waiting until the dust has settled, easier for them to evaluate the projects and their loan. Or there is still no OK from GM, whatever that has to do with EIB. Could be that GM wants to be released from its convertible loan; they didn’t want Antonov in, and it was part of the deal, so it could be that they say: release us, pay the loan, and you can do whatever you like, let Antonov in etc. A deal is a deal. And if that convertible loan isn’t paid, well, you have to live with the original deal.

        That said, I can’t understand why the government, given that their debt office has given a go ahead, waits for the EIB; it should be the opposite. But since they all are acting slowly, Saab/Spyker moves ahead and that perhaps makes the situation more complex for them, but it shouldn’t be that complicated. The EIB loan isn’t that complicated.

        • Well, as we’re speculating freely anyway, let’s go all in! 😈

          GM supposedly never had a problem with Antonov in the first place. They were warned about him from the Swedish government. (I think that was in Jonas Fröberg’s book? I haven’t read it, but I know that this particular conspiracy theory has been going around based on some at least semi-credible source.)

          And now, the EIB don’t really have a problem with Antonov either. It’s the Swedish govt who still don’t want him anywhere near Saab (for whatever unknown reason), but who also don’t want to look like the ones stopping him. So this time they’ve got the EIB to do their dirty work for them.

  3. What’s up with last week’s temporary production stoppage. Have production restarted, or is the “temporary” moving more to an indefinite position?

  4. Ehen i think on the 10 Day timeframe and after that assets can be picked up I think:
    This are debts with no discussion to pay or not to pay. If some one uses gov to get the money you normally have the right to say this bill is not correct and you can push it back to sender/ gov.
    Maybe someone can describe the process in Sweden.

    To get back trust Saab has to do a serious and fair business.

    • Oliver, to bring in personal experience again from a German view, right now I’ve got someone who pays a lawyer to get his claim from me while I pay a lawyer because I think it is not right. He could even go for a default summons because the officials don’t check if the claim is to be discussed, they just want to see an invoice.
      Details are important to judge such a situation from the outside.

      • He Till. You Talk about Mahnbescheid? If the situation is not clear both parties can fight with lawyers. Not a the fine way but a way you must go to get your right.
        If I understand the Saab situation in the right manner. The Gerichtsvollzieher has set a last 10 day timeframe, so this are legal debts. I haven’t read anything that Saab refuses this bills/ debs.

        • Yeah, Mahnbescheid and Gerichtsvollzieher. He doesn’t check if the claim is right, he just gets you the money. Don’t say that the Saab debt consists of those claims but it may be. What I wanted to point out in my post is that there are lots of details behind those 51 claims and we have no idea what they are. After all, we don’t know anything besides the sum and a the number of creditors behind them.
          So all we can do is speculate and maybe we should rather wait for hard facts.

          • OliverH, as long as we are speculating…

            My suspicion is that the solution found a few weeks ago still hinged on suppliers accepting payment in the future (i.e. no or very few cash on delivery demands) as was usual before all this trouble started.

            Whenever Saab hits a bump, more and more suppliers are probably asking for cash on delivery, which puts more and more pressure on Saab. (My guess)

            Saab has more to gain by not admitting any weaknesses. Because as soon as they do that, all heck breaks loose.

            The major difference between Saab and other just-in-time manufacturers seems to be that Saab cannot do anything without EIB’s approval. Saab thought they could sell some of their own property, but EIB declined their request to the surprise of both Saab and the Swedish government.

            I believe Saab does not have much room to navigate in, and I do not see an upside for them to clarify anything in this situation.

            What is clear is that EIB are not acting out of the interest of neither Saab nor the guarantor of the loan. EIB is not running any risks by allowing the sale of the property. Saab requested the size of the loan to be shrunk accordingly, and only the Swedish government need worry in case they have not secured enough assets to cover the remainder of the loan.

            Saab is in the business of making cars, not own property. VM was technically correct when he said the business plan was fully funded as they should have been able to conduct this transaction in a relatively short amount of time.

            In any case, I think the last remaining pieces of the puzzle will fall into place shortly.

  5. I think its time to give up! The brand is totally destroyed and even if they start again they dont have cash to save the brand! 🙁

    • Unfortunately I tend to agree.

      Things are looking really bad, and a report by Bloomberg paints an even more depressing picture.

      It looks like BAIC may get Saab at a discount price (Liquidation) and shift the whole production line to Beijing.

      This whole affair seems to be tracking the demise of MG Rover.

      I wish it wasn’t so, and I hope some miracle is on the Horizon.

      • This is NOTHING like Rover/MG.

        Saab 9-5 and 9-4x are fresh, modern and beautiful. And 9-3 is just behind the corner.
        When BMW bought Rover, they bought the brands and an old factory. And several outdated Roverified Hondas.

        I repeat, this is NOT Rover allover again!

        Take a deep breath, stay Calm and Carry on. 😉

        • Im afraid the similarities are strikingly similar. BMW invested in Rover to build the Rover 75 which was, in fact, based on a 5 series floorpan and received some quite positive reviews.

          I dont want the Saab brand to die but IMO the writing has been on the wall since late March. I hope like hell I am wrong though!!! 🙁

          • I don’t see any similarities beyond the fact that Saab is in trouble and Rover was in trouble,
            Chrysler was in trouble and is now bought by Fiat which is selling Chryslers re-badged as Lancias. That is in that case also similar.

            If this had happened WITHOUT the new 9-5 and 9-4x, THEN I could perhaps agree with you.
            But not now.

            Griffin Up! 🙂

      • The problem is if the one you want isn’t in stock are you really going to put a deposit on an order??

        I am Saab mad, but I wouldn’t do that….not now.

        • A deposit, if required, is between you and the dealership, no?

          Which is a potential problem regardless of the brand you are shopping for.

    • Give up? What, are you mad? We’ll never give up this fight. Not until the day the factory is dust and the cars are just a pleasant memory of a time that was way better. We’ve been trough hell and back so many times with this company now that it is just not possible to throw in that darn towel yet.

      The fat lady isn’t even fat by American standards.

  6. Just read an article online where it says that Saab still owes 300-500 million crowns to its suppliers, Would be interesting to find out how much truth is in that!!!!

  7. some positive news: in the first 10 days of june, saab sold 8 cars in austria. the positive trend of the previouse month is still continuing. in june 2010 saab sold 9 cars in total. hope the other markets will follow this trend.

  8. There are many facets to this.

    What did Carlstrom mean? Saying he is not taking part can mean he is not interested or any number of things.

    Regarding perspective, the daughter of Bernie Ecclestone just bought a house in California for $150,000,000 and considering her home in Chelsae is $90,000,000, well, dad could have got had his daughter give a hand.

    The debt from the first advertising agency was considerable so when you total the bills up there are probably a lot of parties standing in line. A lot of lawyers certainly ask for money on account for a good reason since if anyone gets paid guess who has the least worry?

    Carlstrom has said very little and perhaps this was intent. He has certainly developed a reputation for “inciting a riot” and a few weeks ago Antanov was putting distance between him and Carlstrom which of course I would not believe for a second. He knows who butters his bread and would do nothing without the go ahead from the boss. Perhaps it is in what was NOT said. Perhaps the boss said not to bash EIB or Maud or anyone, just walk and let them all wonder?

  9. Gossip is dangerous………

    SAAB should make some clear statement about these small debts….Silence will only make conjector more rife & more distant from the truth…

    Over to you VM.

    ALSO, As a company I assume if SAAB hits the rocks, then it will take Spyker with it!!

  10. Too much gossip in here – Take a break and don´t take every story from somewhere for serious.

    There will be a sale and leaseback deal not with VA. The “Fonds” pays in cash and don´t wants to be a shareholder so it´s easy to get this deal done if the price is right.
    Problem with the sale and leaseback deal with antonov was the stake in spyker.

    After the Hawtai and Pangda deal all media stated saab has an existing “mou” with youngman and the ndrc wouldn´t allow with others to deal with. Now the choose youngman and nothing is ok yet…
    Media reports and analysts were not serious – they only speculate more and more to get more and more news out of an old story.

    • this so called reliable source doesn´t really now and recovers old numbers – and the figures stated where no real debts because some suppliers wanted to be paid in front for weeks or more as guarantee

      • On the balance sheet released by Spyker on 31-3-2011 there was a short term debt of 244,4 million euro’s. These were so called “Trade payables”.

        Trade Payables
        Definition – payables which are related directly to the company’s primary operations.
        Examples of trade creditors – suppliers for raw materials, suppliers for other inventories received and payables for services rendered.
        Category – Accounts Payable / Trade Payables.

        “Trade payables and other payables are non-interest bearing and are normally settled on an average 47-day terms”

  11. Honestly we would not be looking at so many news and press reports if fellows like Carlstrom were accurate and concise in their press releases.

    Like one of the media asked him when he came out with the first of the Antonov series, “Who are you representing today”, and he chuckled. Perhaps it was because he was also pitching Ecclestone the week before.

    He kind of starts his own rumors or points at shadows, the ones he knows we want to see. We all hate and mistrust big government, big industry and big this or that. Hmmm, is it possible that he plays to our weakness? We are Saab owners, we are smart and independent, we think outside the box and we find our own roads, we are quirky, we fly our Saabs and don’t drive them like the other mortals. All of the things we love to hate; big banks, big government, big business with giants like GM.

    If that is correct, you have to take you hat off to him. A good negotiator or pitch-man always leaves you with a grin and happy.

    Rumor mill? Perhaps he is the true master at using the media. Sites just like this are said to be the new future and even Obama has joined with an office of like 100 people to do sites like this. I guess I just never saw the power here? Tell the barkeep to send him down one of whatever he is drinking, heck, make that a double!

  12. I can’t read this thread of comments: they’re just too depressing! Saab will be dragged face-down through the mud for another long year until the new 9-3 is unveiled. Even CM admitted this. Right now, Ramos Arizpe is making cars. And they’re being delivered. In other words, Saab is not kneeling in fronton the sh***er, so we don’t have much to worry about now. I know we don’t normally have trolls on SU, but apparently there are bridges nearby… 😀

    Hush yourselves, and let VM work his magic. That’s all I can and WANT to say for now.

  13. The Enforcement Agency speaks out:

    http://translate.google.com/translate?js=n&prev=_t&hl=en&ie=UTF-8&layout=2&eotf=1&sl=sv&tl=en&u=http%3A%2F%2Fttela.se%2Fekonomi%2Fsaab%2F1.1250707-52-krav-pa-saab-hos-fogden

    Det totala beloppet på de 52 fordringarna som berör Saab är på 27 miljoner kronor. The total amount of the 52 claims involving Saab is in 27 million.

    – En del av dem kan vara felaktiga och en del kan redan vara betalda, säger Christina Lindberg. – Some of them may be incorrect and some may already be paid, “says Christina Lindberg. [of the Agency

    Kongsberg Automobile is one of the largest creditors with a requested principal amount of nearly 4.3 million for vehicle components.

    So the indiviual amounts aren’t huge. According to the article, it’s more about the wrangling about payment terms.

    • About the claims:

      Some of them may be incorrect and some may already be paid, “says Christina Lindberg.

      So let’s wait and see.

  14. Sorry for venting, but what a colossal mistake it was to send thousand(s) of 9-5’s to NA last year without apparently making any market studies about demand of a bigger and more expensive Saab sedan in the US?

    Pay IAC today to get the MY12 interior parts flowing (send some to NA to be put on the MY10 cars). Sometimes all the time spent on haggling over smaller details can cloud your judgement about the big picture.
    Building cars is far more important than almost any details at this point. Get an agreement that you will look at everything in August. Saabs credibility goes in the tank if the line doesn’t start rolling really soon even though the terms would be harsh. IMHO think suppliers are entitled to be tough at this point. It will look a lot different after the 10.000 cars have been built and an other 10.000 are on the order books.

    The 9-3 SC TTiD Griffin (sub-120g) and 9-5 SC will sell very well ones they hit the showrooms, but the demo cars need to get there first!

  15. SAAB´s critical production suppliers do not use SEA for collecting overdue debts. The custom (all over the world) is to stop production deliveries, if not paid.according to previous agreements made with SAAB. Many suppliers now also are practicing this, which might cause a bankruptcy for SAAB, but that is SAAB´s problem, and nothing for the suppliers. For them losses on a SMALL customer like SAAB easily must and can be written of f from their booked customer claims in the semiannual report July 1, (if not payments are received in early July).

    The SEA debts below son the other hand seem mostly refer to “servicedebts”, not directly necessary to the SAAB production line (or debts simply replaced by SAAB with other suppliers), as following list of SEA companies. The list is steadily growing , because SAAB´s priority is payment to “production suppliers” before any payments to “service companies”. The neext step, if SEA acknowledges that the debt is correct, is to get paymentc from SAAB through bankruptcy procedures in a Swedish Court, which no doubt is the intention of some of the companies below (the cost/benefit calculations for Öhrlings Pricewaterhouse-Coopers and many more, with own speecialists for this, will be very favourable, ie they will start bankruptcy procedures against SAAB if not paid).

    Svensk Bilprovning: 10 309 kr
    Supplies Team Sverige: 1 559 kr
    Uddeholm Svenska: 150 272 kr
    Dahl Sverige: 50 661 kr
    Michael Page International: 1 812 330 kr
    Posten Meddelande: 443 330 kr
    Effect Management Search: 128 014 kr
    Kongsberg Automotive: 4 338 708 kr
    De Lage Finans: 157 904 kr
    Siemens: 19 007 kr
    Bording: 99 134 kr
    Posten Meddelande: 244 909 kr
    Kontentan Förlags1 280 kr
    Awapatent: 319 513 kr
    Öhrlings Pricewaterhouse-Coopers: 678 521 kr
    Benteler Aluminium Syst.: 82 029 kr
    Mutual Benefits: 455 948 kr
    Brännkammaren 67: 223 224 kr
    Teliasonera Sverige: 5 525 kr
    Ultramare: 32 890 kr
    Chemetall Skand. Ytteknik: 361 174 kr
    Infotiv: 215 653 kr
    Granzow: 90 867 kr
    Materialcenter Väst: 93 725 kr
    Benteler Aluminium Syst.: 973 005 kr
    Netgroup Engineering i Gbg: 92 847 kr
    Svea Ekonomi: 4 128 kr
    Kopparberg Finans: 129 683 kr
    Bording: 5 162 kr
    Atlas Copco Compressor: 141 875 kr
    Atlas Copco Compressor: 6 127 kr
    Runelandhs Försäljnings: 3 234 kr
    Live Nation Sweden: 238 001 kr
    Carlhag: 5 129 kr
    TDC Sverige: 2 597 kr
    Svenska Elektrod AB: 2 262 kr
    Fasitet PDE: 4 809 973 kr
    Eniro Sverige: 35 762 kr
    Dacat: 238 653 kr
    Atlas Copco Compressor: 448 501 kr
    HIQ Göteborg: 3 327 844 kr
    Inkasso Marginalen: 436 099 kr
    Awapatent: 233 601 kr
    Mima Skepps- och Industriservice: 686 278 kr
    I3tex: 425 939 kr
    Releasy Customer Management: 266 967 kr
    J Event: 729 118 kr
    Chemetall Skand. Ytteknik: 341 427 kr
    Chemetall Skand. ytteknik: 142 316 kr

  16. A view from an unpaid supplier ………….

    We have been very patient, kept suppling when we have not been paid, always hoping that next week we will get paid. We were given a payment schedule, which we thought was OK, but when this was not kept to we can only be so patient.

    Not being paid has a direct effect on staff, they do not get paid. So imagine not having any income for 4 months? Would you keep suppling hoping that money will be coming “next week”?

    I doubt many of you would continue working in your present jobs if you had not been paid for 4 months? That is no different from being a supplier.

    I am a big fan of Saab and I have resisted posting for a long time but l feel there needs to be a balanced view.

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