All animals are equal, but some are more equal than others.

This quote from Animal Farm by George Orwell comes to my mind when I read the last article from on the discussions with their subcontractors.

It looks like Kongsberg Automotive is not willing to accept the terms Saab is offering to all of its suppliers, although most of them do.

This sentence (hope gg-trans got it right) says it all.

“Some who have more to claim ought to be able to get a better deal than others,” said Joachim Magnusson (CEO of Kongsberg Automotive) to Di.

Even Swepart Tools, is receiving now only 10% of the debt and the rest in September, according to Di.

I think the all the suppliers should listen to Svenåke Berglie, Managing Director at Scandinavian Automotive Suppliers, when he says that the suppliers can earn more if Saab restarts production than from a bankruptcy of Saab.

I forgot to thank KarlR for the hint, sorry.

53 thoughts on “All animals are equal, but some are more equal than others.”

  1. Regarding Swepart Tools… This is in todays issue of Dagens Industri (sorry, cant find that article online):

    The company’s employees in Skåne Tyringe is now working with the development of tools to push the plate body to the new 9-3 model. “We see no delay, we follow the plan so that it can be launched in the market as planned,” says Lars Thunberg.

    • I can’t wait!!!

      As I suspected the development still goes on, I truly hope they can do something special and still release it despit the current situation, I love the fact commited people still work hard doing what they know best in such adversity.

      If you build it. I will buy it-I have promised myself one for a long time.
      Make it a black aero hatchback with the e-AAM system at the back.

  2. “…suppliers can earn more if Saab restarts production than from a bankruptcy of Saab.”
    Is this only obvious to us and not for the suppliers ? Who will they supply if they loose such an important client ?

    • Dave, we have one view of this since we all wish Saab to surive – but we have to understand suppliers face difficulties in the immediate short term which may be fatal to them long before Saab can get back to production, before it can increase sales and long before it again has surplus cash to pay suppliers. Whereas Saab has received cash upfront for cars not yet built, the suppliers have provided goods not yet paid for……I’m sure all suppliers would wish Saab to survive and be a major customer, but if they aren’t going to survive to see it, they have a responsiblity to their creditors and employees to take whatever measures they have to. Fortunately it seems many are willing to support Saab at the moment. but every sympathy to them for their situation is not easy.

        • dave (and many other on this forum)! Have you done any research before making comments about the suppliers? Many of Saab’s suppliers are much larger than Saab Auto itself. Kongsberg Automotive, which the above article refers to, has over 11 000 employees in 20 countries and 35 production facilities. The same is true for many more of the crucial suppliers. Saab is a minor client to these companies but they would brake the company’s obligation to its shareholders by not collecting the monies.

          Apart from non-Swedish companies that these suppliers have as clients in Sweden alone there are Volvo Cars (13000 employees), Scania (39000) and Volvo AB (100000). Saab with 4000 employees is tiny in this equation. (a company’s nationality is based on where the headquarter is, not who owns it).

  3. Muller is trying to protect his business, Joachim Magnusson is trying to protect his. He obviously believes, rightly or wrongly, that Saab does not have a future so he is moving to protect his interests and those of his employees.
    What people have to realise is that the motor trade worldwide is deep in the brown smelly stuff and there is no room for sentiment. Everyone one this board loves Saab and has long standing ties to the brand. But the outside world sees purely the numbers & right now some people don’t feel they add up

    Its nothing personal, its just business. And he’s doing what he feels is best for his.

    • Tat’s absolutely correct.
      What he may not take into consideration with hi sttement is that if payments was to be dependant of the suppliers size and outstanding claims GM would take all

      • fair point – GM have been silent throughout this period presumably so as not to fan the flames of what they hoped would be (perhaps long) payback period.

  4. This is a classic case of self-fulfilling prophecy. Kongsberg thinks, contrary to most suppliers that Saab will default. Therefore they try to get as much as possible now rather than subscribing to the deal, as do most suppliers. The fact that their own behaviour may force a default seems to be totally lost on them or totally calculated.

    Very short sighted and I cannot fathom how they reason that they will get more money out of Saab from a bankruptcy than just playing ball and waiting a bit longer.

    But heck I am not a supplier in the automotive business, what do I know eh?

    • it is a shame when I get the feeling Saab are on the edge of something really good…I hope they keep finding the extra cash -and that the EIB actually help them out this time….I can’t believe they now have 12,000 cars on order!!

  5. “All animals are equal, but some are more equal than others.”
    Exactly, my thought as well, when I read it. Soon we will be at point in time when they all would have received most of their money, perhaps all, had they accepted the initial deals. Or perhaps even some time ago. But no, some are a bit stubborn. Prolonging this will not get them their money any quicker, a restarted production is the best way for them to get their money. And continue to get money.

    I think Saab had sold more every month than the earlier, on most markets, for some 10 months in a row, when production was stopped. Short-term liquidity is difficult when you are expanding, and I think Saab was and is in a sensitive phase. And then this happened some weeks after the Geneva show…

  6. Saab must be the most exclusive small brand (that is not a supercar) anywhere in the world what is the average production rate per day this year?? 5 cars a day? Maybe 10?

    Its not a good business model-I hope they get sorted but I do feel very special driving my Saabs right now-I think Aston Martin have made more cars this year!!
    Doesn’t the extra exclusivity make more people want something rare and special? or does everyone just follow the crowds these days?

  7. Animal Farm was a satire about communism so I don’t see this as the best simile for this situation. Clearly in a market economy one looks after ones own best-interests. Like VM, Joachim Magnusson is trying to protect his company and do the best possible job for his shareholders. Hopefully an agreement can be made.

    • @Angel-off
      Not such a good idea.
      If Saab was lucky enough to find suppliers who could tool-up quickly and provide parts at the correct quality then the original suppliers would definitely drag Saab through the courts.

  8. I’m a little confused. We’re told that the deal with suppliers is 10% now and most of the remainder in September (next month). So, what do they know is going to happen later this month or early next in order that Saab should be able to almost clear the debts to suppliers? The Chinese have not yet submitted the application to the NDRC and when they do that it may take another six months or more to get approval, if that is forthcoming. A serious amount of investment is needed to nearly clear the debts to suppliers. So where is that going to come from? What am I missing? Any ideas?

    • jond,
      you are not missing anything. But, should we start speculating? Will this speculation help the process?

      I don’t think so.

      • @RedJ
        OK, don’t want to make waves or start rumours. But all this does suggest to me that something serious is afoot somehow. Of course, had I already taken delivery of my 9-3X there would be more driving and less speculating, but then there are quite a few of us in the same boat, I suppose.

        • And if they had accepted from the beginning, they would already have 10% of their money and the rest also in September. Isn’t it ironic?

          • Sometimes Saab’s attitude has been very dismissive to it’s suppliers & comments like this can fall into the same category.

            Suppliers are the life blood of any business, & without ALL on board, no production will restart =

            No Parts = No production = No production, = no money to pay suppliers back the money previously owed.

            Full debt repayment in September is a date not Achievable.

        • Apart from it being speculation when money will arive, the suppliers have asked for more insight into the future plans of Saab in order to continue supplying.
          They must have found something worth the wait

  9. as details of the e-mail to Timr remains unknown i see Saab entering a mini esque hibernation. only a solid player with deep pockets and a well established sales and distribution network can make this work. sentiment is the key, a work colleague went to an auction today and two ex government 9-3ss biopower [decent specs] with low km’s garnered one bid each some A$4-5k below their reserve. i am dismayed at the lack of transparency by SWAN and VM. [i am also trying to find out how to cancel my registration to su].

  10. You guys must have some sympathy for the suppliers. Like them, I supply (a service, not parts) to the motor industry (Ford in this case) and if they were to hold up payment in the way Saab have done, I would be bankrupt by now. These guys have a responsibility to look after their businesses and staff – there has to be a point at which they cannot go on waiting.

    I feel for all concerned, it’s a real viscious circle, but please, don’t be harsh on the suppliers for wanting to remain in business!

    • I doubt they will get their money faster by forcing the issue now. But by forcing the issue, they will have to find new customers to replace Saab and they won’t see any of the Pang Da money. They know the order book is full, but I doubt they know just what will happen in case Saab declares bankruptcy.

    • I agree totally with bpsorrel.

      Just remember that Saab could not pay its employees because an investor was supposedly late with a payment – well the same thing has been happening for months with the suppliers not being paid by Saab. Cut these guys some slack they are an innocent casualty in all of this and they are crucial to Saab’s survival.

      • I agree that they are crucial, and I feel for most of them. But as it has unfolded, each one of them have only one part to discuss with, Saab; but Saab on the other hand suddenly have several hundred. That’s a gigantic puzzle.

        I am confident that the people at Saab wanted this year to be a year were they presented their great new models, 9-4x and 9-5 SC, together with the updated 9-3, on their way to success, shared with the suppliers. As it is now, one can’t help but wonder how bad it was, before the production was halted. Some suppliers seem to behave as if they had not got paid since day 1, 18 months ago, which of course is ridiculous, but the whole situation is absurd. In an expanding phase it’s difficult with short-term liquidity, before they have built up enough reserves, and then when one, two or a few suppliers halts everything and everyone comes running, well, we all know the rest. I assume the suppliers must know how it is to start a business, expand it etc. so one can wonder why they decided to work with such a company if they knew that there would be a tough, first, phase.

        Above all, during all this several people have been badmouthed, real bad, on the Saab side; it started already at the beginning with VA, and now VM. And still they find it worth it, working for the success.

    • (Ok, have to stick my nose out again…probably get beaten up for it but still..)

      Yes, you are right, completely. The thing is that it has now gone that long time since last production that most suppliers already have moved on with new jobs with other companies or have gone bankrupt. Like i wrote in an earlier comment some weeks ago about my best friends wife down the street who works for a Saab supplier. They have already moved on with new clients and customers. Saab has still not paid them and they will as well never go back to business with Saab. It has gone to far with empty promises and lies.

  11. It´s not easy to show sympathy in this case. So many suppliers found a solution with Saab. How long are they working together, Kongsberg and Saab ? Aren´t there no personal connections, could they leave in this special situation ? Think they got their money all the years before. So why not help a longstanding business partner in these times ?

    • Maybe they can’t wait much longer. Maybe THEIR creditors are calling, maybe they’re facing bankruptcy.
      I’ll wager these guys wouldn’t force the situation if they didn’t need to.

      Survival, that’s what it’s about…

      • O.k. – I understand. A real shame that it happens right now. Wrong time, wrong scene. How will it work with suppliers leaving …. 🙁

        • This is the catch 22! Some suppliers will be able to survive, I’m sure, but some won’t. How Saab will be able to continue in the short term without them is anybodies guess. It will take time to replace them and get tooling etc sorted out.

          No kidding guys, I’m worried…. 🙁

    • Hilmar, are your comments a joke? I assume you have never met the purchasing department of any medium to large organisation….. If Saab could get the same product to a better deal than with the current ones they would switch suppliers without a thought and no regard taken to personal connections etc. This is business! The suppliers have already shown a lot of good faith and not enforced bankrupcy already.

  12. WANTED!!!!!!

  13. Yhym…. so the post suggests that if most (how many?) suppliers have already accepted the Saab offer, then it means all the rest should/is expected/must do the same?

    Gents! There is democracy, open market, economic rules etc.
    Konsberg has a diferent point of view and want to do exactly the same what Saab wanted to do (and still wants to do!) with the suppliers: push them to the wall!
    It’s a game! As simple as that. They don;t have to care about Saab. They do care about their own business.
    I’m sure Saab would not care about Konsberg’s problems and would find another supplier to replace them asap in case Konsberg is in trouble.

    And they obviously have the right to do so.
    I think we should remember that all this about Saab and their wrong business decissions, PR decissions etc…
    Suppliers are just a business partners who have their own business point of view and have the right to fight for as much as they want.

    Sorry for saying this but this is all Saab’s fault and even we – Saab fans – have to understand this.
    With all respect to all of us who support the brand and for the brand – Saab doesn;t care even about us…..
    Saab, and especially the stakeholders do care about money and business.

    Marketing department cares about fans and customers. They must attract us to the brand, keep believing in it and stuff like this. That’s their job. They are paid for this.
    And of course I’m not saying that there are no Saab dedicated people working in Trolhattan. Yes, they are!

    But at the moment they are not in the game. Money – that’s all about.
    VM & company is eager to sell for as much as he can, chinese companies are eager to buy as cheap as possible.

    It’s all about money…..

    But Saab will survive. Why? Because there is still a huge chance to earn money on its existance.

    So griffin up all of us but please, let’s be realistic 😉

    • Sorry to be such a bore, but there are some of us who live for BOTH money AND mission. The two are NOT mutually exclusive. I think VM thinks the same.

      Griffin Up, Indeed

      • The suppliers’ management have a responsibility to act in the best interests of their shareholders – they are accountable and therefore their aims will not be the same as Saabs. Not sure why is this so difficult to understand..

    • Not Sire I agree with you there. I have some experience with dealing with suppliers in Large organizations and in my experience it is NOT all about the money. Personal relationships and shared history plays a major role in any renewal discussion and if you go back for a long time it is even more important. saab’s suppliers have a choice to take the offer and get their money later or play the lottery of the enforcement agency and the bankruptcy. Both options benefits from the highest possible subscription, possibly only 100% subscription to either option is enough to avoid complete failure for the suppliers. Obviously only the first option contains a possibility for Saab to succeed.

      That is what the suppliers must consider. Saab can’t afford to p-off anybody.

  14. What no one seems to ask is how did this situation get so bad in the first place assurely there were warning signs long before the you-know-what hit the fan in late March? It appears that this issue was left to fester for too long early in the year and Saab employees now find themselves in this seemingly endless predicament of “where is my next paycheque coming from?”. Saab needs a CEO and it seems that VM has been far too quiet for far too long. 🙁 The Swedish governments indifference to the whole situation is also rather alarming to me as well.

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