Mr. Borg, what are you telling us???

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Reading through the many articles and short notices Ttela.se has published about the NO to the reconstruction process, this one, an interview with the Swedish finance Minister Mr. Anders Borg, has a very interesting passage. Please tell me that this is only a bad Google-translation.

– Will there be layoffs, there will be resources from society and the state to provide support and assistance. We have security and wage guarantees, we have considerable resources in the Employment Service if needed. But the legal process must be completed and then we will see who should lead and own the company.

– Blir det uppsägningar så kommer det att finnas resurser från samhällets och statens sida för att ge stöd och hjälp. Vi har trygghetssystem och lönegaranti, vi har betydande resurser i Arbetsförmedlingen om det skulle behövas. Men den rättsliga processen måste slutföras och sedan får vi se vem som ska leda och äga bolaget.

The rest is also quite strange to my eyes. But maybe its only because I must relay to Google.:-(

The sentence marked in bold is the one that I think is the most controversial. I don’t think there is somebody in the dark waiting for Saab bankruptcy, not even Chinese partners, but I think this sentence is too ambiguous, and there are different ways to express what he means in a less ambiguous way.

85 thoughts on “Mr. Borg, what are you telling us???”

        • Seems like he talks about what will happen to the people at Saab in case they lose their jobs, help to find a new job and such things.

          The government will not become owners of Saab or any of its companies. The loan guarantee only means that the Swedish government have to pay back on Saabs loans if the assets in the company after a bankrupcy doesn’t cover those loans.

          Doubtful that Borg has windmill companies in mind, he doesn’t like things that require government subsidies, and windmills are one such thing.

  4. As I read the translation he seems to be saying that something may well emerge from the prospective bankruptcy that will permit some sort of production to continue under a new regime and that SweGov stands by to support the workers in line with Swedish practice and the EIB, but not the suppliers.

    If that is correct it seems entirely reasonable to me. IMHO the Court and SweGov have been quite correct not to support the present management, who have failed completely. Best that this is done quickly and cleanly, that the appeal fails, that they are driven out and the assets recycled. This is how capitalism works.

    • Jond,
      if this is the case, why isn’t he just telling the whole story?
      Something like: “Mr. Muller, feel free to leave before is too late, a couple of friends of mine want to take over the company.”

      • Keep the bitternes to your self. What he’s trying to say is that there is considerable rescourses from the state side to handle the layoffs. Also mentioning that it’s to early to say what will happen to the company after it’s bankrupt. Nothing else.

        • For once I agree with you
          The most informing and thoughtprovocing passage is not about how SweGov will act as all other nordic governments.
          The interesting part is:

          “But the legal process must be completed and then we will see who should lead and own the company.”

          I find that very interesting wording. I would sure like to know what is meant by that

          • And this part is, with all my bitterness, what I’m asking.
            What does Mr. Borg mean with that.

            And Leeloo, I feel sorry I’ve attacked your beloved government. My apologies.

  5. Interesting stuff. I still say Saab needs way more money than the Chinese are bringing to the table to survive.

    It woukd be interesting what our friend CJ has to say in the matter.

    GM was saved by the US government from liquidation, could Saab be saved by the Swedish Government.

    Somebody. Please save Saab!! 🙂

    • Sadly not a chance – clearly a strong anti-interventionist governement. In strictly economic terms I’d normally agree and find myself fighting that attitude on this one case because of my passion for Saab. If this were an IT company or steel works I wouldn’t expect government aid……

      Yet, acrossthe world other governments have bailed them all out – in the USA, France and Germany, (not the UK, although they have been very helpful to Honda and Nissan) so why not Sweden?

      The Chinese money is insufficient, too slow and now too late. Bancruptcy may open other avenues or allow VM’s global shopping list of interested parties in to the picture. We need SERIOUS capital people, be under no doubt about that. Capital is harder to come by today even than 18 months ago and there was little enough true interest then….. I remain optimistic because that is my way, but I can’t foresee an easy answer at this stage.

      • Well, to an extent it depends on who is out there with what plans. All this coming and going over the summer with financiers that got everyone excited and believing in ‘The Deal’ probably included many who had no intention of throwing good money after bad to VM and crew, but wanted to analyze the situation with a view to proposing something to other clients after the inevitable bankruptcy. They may now emerge from the woodwork. Let’s hope so!

      • Belfast_Saab I’ve long since thought a company such as Apple could step in, after all, with the onset of onboard technology, what better platform could Apple have than SAAB – It’s a perfect match!

        I can easily imagine a SAAB dash that allowed for an iPad to slot into place and instantly become a combined Sat Nav, Comms and Entertainment Centre.

        Apple have the spare cash with the right ethos for SAAB, not going to happen, but a lovely dream.

        • Nice idea Eleven – actually wonder if Apple’s future is so secure now their mojo meastro is leaving? And of course Saab has opted for Android with IQ-on ratherthan Apple…..so propbably burnt that bridge 😉 I’d settle for a wealthy Middle Eastern magnate – I think there is some minor shareholder from UAE/Quatar involved in Swan already?

      • If this has all been hinging on just the 250 million from the Chinese, then the amounts in play really, clearly are insufficient, and the court decision in this case is sadly right.

        We’ve been lead on for a while now about THE DEAL and other interested parties looking at Saab without any details… Well, if this was actually true and not just hot air, then now is the time to be brutally honest and open about what negotiations have and haven’t been in play.

        Two observations from the US:
        – You can’t compare this to the GM situation. Within the core of GM’s operations was a highly profitable company if it could get out from under some horrific employee benefit and employment burdens (of its own negotiations and making, admittedly). Is the same true of Saab? Apples and oranges.

        – I don’t know if it is because Saab’s a European company or not, but the lack of transparency here really infuriates me. Look at the Chapter 11 of Borders Books in the US recently. There were detailed analyses and post-mortems of exactly where and why Borders went wrong. As a reader of the US business press, I as a lay person know precisely why they got in trouble and why they couldn’t get out.

        It’s now been 6 months since Saab’s plant problems and, truly, we have ABSOLUTELY NO EXPLANATION for why everything has happened. They don’t have enough money, sure enough, but why? What would change that? Where did the initial business plan go wrong? If Saab gave to the court as little information as we in the public sphere have been given as the specifics of why they’re in this situation and what will change to get them out, then I sadly don’t see why the court should have said yes to reconstruction. 🙁

        Bye, bye CPO warranty… 🙁

          • And 1 billion SEK from VA would have made the factory run for another 2 months? Then the stop would have been in May not in March…

            I am sorry but the company is bleeding huge amount of money.

            I do want Saab to succeed but with the current burn rate that will not happen without serious (somebody said 10 billion SEK) cash injection.

          • And that’s something of a snarky reply. Let’s break it down…

            1) Not selling enough cars: Their business plan assumed a return to break even or profitable sales in less than 1 year? By a company that didn’t have its factory started yet and no PR or marketing in place? Really?

            2) VA investment: As mentioned by Partrik, what would that have bought? A month? Two? Three?

            What I mean about transparency is exactly why did they burn through money so fast? Was the plan undercapitalized from the beginning (i.e. Saab never had a shot… Example: Did that 80,000 break even not including the cost of marketing, NG 9-3 development, etc? Was a “true” break even closer to 120,000 or 150,000).

            Frankly, not selling enough cars in the first 12 months shouldn’t have brought any rational, realistic business plan crashing to its knees, as everyone on this forum and in the industry really knew that the future depended on the NG 9-3 lauch in 2012/13. If they couldn’t get there without making a profit before year 1 was done, then that was a pretty irresponsible plan from every angle and everyone (GM, banks, VM, JAJ) all deluded themselves…

            But we can’t know this without detailed information, and we have none…

          • It’s not only the direct investment that VA was planning to make that would have been important, but also the other investors that would have come with him through his organization.
            I do think, though, that selling enough cars is more important. The last year has shown that the existing markets are not sufficient for Saab to reach a break even point. Regaining the same market presence as in profitable times will need a couple of years to shed the bad brand image. The only way to survive those meager years is by opening new markets. The Russian market could have been opened by VA, but that’s water under the bridge. Left is the Chinese market through Pang-Da with its vast dealer network. Apart from some conjectures I couldn’t find any projected Chinese sales numbers in the reconstruction petition. This projection could have been made based on whether the 10,000 or so Chinese orders that were paid up front were actually sold to customers in China.

          • Well, an investment such as VA intended to make would in itself not be enough to keep the factory functioning for long. But what it would have done is get the production going, making those 11.000 cars that are in back order and get the cash flow moving again. 10.000 cars sold would generate an income of somewhere between 200 and 300 million euro’s, depending on how much Saab makes on a sold car.

            Ivo

  6. …and then we will see who should lead and own the company. . Apparently. mr. Borg is quite sure that the company will continue under new owner- and leadership. Normally, when a business goes bankrupt, it gets cut up into various asset lots which are then sold off to the highest bidder, generally at rock bottom prices.

    It would seem, judging by his words, that mr. Borg already knows that this will not be the case with Saab and that the company will continue as a whole. Which, of course, would remove the slight problem of Sweden having to repay the EIB loan and to have to shed out hundreds of millions kronor in unemployment benefits to 10.000 or 20.000 or maybe even more Swedes.

    Moreover, his way of expressing also suggests that there is already some kind of takeover deal in place for someone (in Sweden? probably, if the theory is correct, because that is the place the government can exert some serious influence) to take over Saab as a going (well…) concern once VM & Co. have been kicked out of Saab by way of a bankruptcy. There are quite a few huge money bags in Sweden which are traditionally close to the government, probably even more so to the current one as it isn’t a socialist one…

    Interesting choice of words by mr. Borg, indeed. Not much is said but a lot is inferred. I’m intrigued.

    Ivo

    • Sorry Ivo, but this goes against everything that the Swedish government has been saying and implying over the last 6 months. The only conclusion I could draw is that they prefer to see Saab disappear, another victory for their service based economy visionaries.
      Have things changed to make the Swedish government now wanting to Saab to continue as it is?

        • The really rough aspect of it is that with each additional day that this BS goes on more money is needed… And now, referring to liari’s (excellent) posts above, it may not be a matter of 1 year before they make any kind of money anymore, it may be 2 or 3 or 5 as, being totally frank, I don’t think we can really rely on Mr Muller’s assertion that the NG 9-3 is on track to a 2013 launch…

          Still, the wording is intriguing 😉

          • Well, I can think of at least one potential investor with more than enough funds who has a lot of pull with the Swedish government, might be interested in that construction since he already owns the rights to the Saab name, can keep Saab Swedish and should be quite able to pay off GM’s prefs if GM throws the IP rights into the deal. An extra plus (or minus, that depends) point may be that they already owned Saab before. Care to guess who I’m talking about?

            Ivo

          • @ ivo – the Wallenbergs? But haven’t they repeatedly stated over the last 10 years or so, that they do not want to go back into car manufacturing? The only way they’d do it would be to gain something else from Borg & Co… Correct? 😉

          • Ivo, if your conspiracy theory is correct, i.e. SwedGov and EIB steering Saab towards bankruptcy, then that would be enough for me to never buy a Saab from the surviving new company. I’m sure that also the stock exchange and the (small) investors would have some nasty questions for the Swedish government. Let’s hope that you are incorrect.

          • Actually, I hope so, too, sort of, I’m not at all a fan of shady business practices. On the other hand, if the survival of Saab hinges on it then the Marquess of Queensberry rules no longer apply and the gloves are off. I also simply cannot rule out that there could well be a group of Swedes who don’t like the idea of a profoundly Swedish business like Saab winding up on the scrap heap or, worse even, in China. Swedes can be pretty chauvinistic, you know. I know, having worked for and with them for years.

            And as to the Wallenbergs stating what they did, well, states of mind can change if a nice profit looms behind the horizon. And they are not stupid. If you can buy Saab with all of its potential for a krona-and-a-half, why not? Whatever Saab would be worth after a bankruptcy, these guys can pay it from their annual coffee budget without having to go shop for more at a Lidl supermarket. Moreover, they would gain a lot of kudos in Sweden if they can drag a Swedish industrial icon -which they more or less founded- from the claws of the Asian dragon and save thousands of jobs in the process.

            Well, it’s just speculations and theories, all that. But damn’ interesting, don’t you think? Lots of potential for a business thriller there. Maybe one day I’ll team up with Swade to write one. ‘The Battle for the Griffon’?

            😉

            Ivo

      • Well, Gerrit, you have never heard about politicians saying one thing and arranging another? If, for instance, there were informal discussions between the government and, say, the Wallenbergs about saving Saab and getting it back into Swedish hands for as little money as possible, do you think that the government or the potential investors would advertise the -probably quite devious- ways and means this could be achieved?

        But it is a nice conspiracy theory, don’t you think?

        😉

        Ivo

  7. RED you got lost in context.

    What Borg is referring to is the system who protect the employees in Sweden under these kind of circumstances where their employer goes bankrupt or in to reconstruction. The employees will get their pay and there will be implemented activities to help employees get a new job. These activities can be of different character including some kind of education.

    This is not accessible for SAAB nor any other company

  8. I off-course don´t know what Mr. Borg is insinuating. But I am afraid that he is referring to Volvo. Which – in my opinion – will be nothing but death in another dress for Saab … – just a thought…

    • Troels!

      I believe you do know if you think about it – it is the Swedish equivalent to “Lønmodtagernes Garantifond” as well as “en særlig indsats overfor ledige” (special activities towards unemployed) – nothing to do with SAAB Volvo or any other company.

      The Swedish Government has no intention of supporting SAAB financially beyond providing financial security for the EIB loan.

      • Yes, I understand what you are saying – but I was referring to the “mystical” sentence; “…and then we will see who should lead and own the company” The Swedish Government – or some persons related to it – have earlier claimed it as a good solution if Volvo were buying Saab – which they (Volvo) surely will consider if Saab goes bankrupt…

  10. Oh my God – this is painful.

    I am embaressed by the comments here.

    “Welcome to Sweden!” is unfortunately what I have to write. Please do not for a second judge
    us all by this comment from Mr. Finance (Malfunctioning Cy-)Borg. There are still some intelligent
    ones left since the emigration to America.

    hilmar asked “Who will be the winner?” Maybe Mauds windmill-company? Hehe…

    Seriously: a bancrupcy in Sweden does not mean that there are any losses regarding reputation. Its not
    important in our culture, so do not think about that. Economically there are usually all to gain. But I do
    wonder… this is probably just a way of opening up for swedish investors – and I can think of noone with
    Müller/Antonov-potential… but time will tell… It could be a hidden agenda in this too…

  11. Rolf Åbjörnsson, who led the reconstruction in 2009, said this on SVT this morning:

    Jag vill ju se en rekonstruktion av Saab, sa Rolf Åbjörnsson. Men det får man göra genom konkurs, den här formen av rekonstruktion kommer inte att leda nån vart. Konkurs gör ju att man bryter Kina-Ryssland spåret och får in en ordentlig ledning och är öppen mot marknaden i hela världen för ett kreativt tänkande. Rekonstruktionen som den ser ut nu är bara ett fördröjt lidande. Det finns ett intresse ute i den seriösa västvärrlden för att ta hand om det här, men man är utestängd från den möjligheten.

    A quick translation:
    I want to see a reconstruction, Rolf Åbjörnsson said. But that should be done through bankruptcy, this kind of reconstruction will not lead anywhere. Bankruptcy means breaking the China-Russia trail, and to bring in a decent management open to the market all over the world and with a creative thinking. A reconstruction through court is just more suffering. There is a genuine interest in the serious western world to deal with this, but this is not possible as things are now.

    LINK

    Add this to what mr. Borg said, add the strange (lack of) acting from the swedish government, and then try to convince me that there never was no foul play in this game.

  12. My fairy tale: Once in Septemper 2011 Mr. Anders Borg took some money out of the pocket of the EIB and this large European bank becomes (partly) the owner of the small car maker Saab who was suffering from misunderstandings leading to bankruptcy. But there was this EIB angel who wanted to do something good because in the past there was some misbehavior. And finally the SweGov decided to help in this situation as well, also for the mood among their voters. And so the suffering little car maker Saab got the helping hands to survive, was able to produce nice and sporty cars and the sun was shining bright above this northern country – Sweden. And until their evening of life the little car maker, the SwedGov and the Eib were friends and were living in peace.
    Don´t take me serious. 😉 But we haven´t still an explanation for TimR´s bright smile receiving a letter from VM and no explanation for The Deal Swade anounced.

  14. – Blir det uppsägningar så kommer det att finnas resurser från samhällets och statens sida för att ge stöd och hjälp. Vi har trygghetssystem och lönegaranti, vi har betydande resurser i Arbetsförmedlingen om det skulle behövas. Men den rättsliga processen måste slutföras och sedan får vi se vem som ska leda och äga bolaget.

    This would in my translation be something like this:

    – If there will be lay-offs, society and government will have resources to give support and help. We have social security [read: unemployment benefits and welfare] and wage guarantee [wages are paid by government during a bankrupcy], we have significant resources at the Swedish Public Employment Service if needed. But the legal process must be completed and then we will see who should lead and own the company.

    Which means that the Google translation is quite correct. My impression is that the government really want to have a reconstruction. It seems like they want to have a Chineese owner and no Muller and/or Antonov in Saab.

  15. I’ve been studying Swedish and the Swedish society for quite a while. Let me tell you guys something; he’s saying basically nothing that we didn’t already know.
    Swedes (generally speaking) don’t open their mouth to let words come out and end up in trouble. And usually they don’t lie.

    What Borg is saying is:
    1- The government has money to back the workers up. In other words: “Should you lose your jobs, you won’t starve.”

    ”Men den rättsliga processen måste slutföras och sedan får vi se vem som ska leda och äga bolaget.”
    2- We won’t hurry things up. We, the Government, will act when and if it’s required.
    3- We don’t want to kill Saab Automobile. We expect somebody to come and save the day, buy the company from Müller and take the hot potatoe out of our hands.

    Please stop with all the stupid theories. You’re putting yourselves in shame.

    • “We expect somebody to come and save the day, buy the company from Müller and take the hot potatoe out of our hands.”

      If the “We expect” is translated correctly then………
      well, that’s a statement to get the stupid theory machine churning, whether you like it or not.

      • Well, the “we expect” part was my view. Here’s the exact translation:
        ”Men den rättsliga processen måste slutföras och sedan får vi se vem som ska leda och äga bolaget.”
        “But the legal process must be completed and then we will see who will lead and own the company.”

        My view on what Borg was referring to:
        ALT 1: Müller gets money somehow and he continues with his business plans.
        ALT 2: Another actor comes up and he buys the company.
        ALT 3: The company goes bankrupt, it is converted into money to pay the workers and all the debts.

        Anders Borg didn’t say anything else than can fuel our imagination.

    • One could perhaps add that unemployment benefits in Sweden, probably to the surprise of many, are very low compared to other Western European countries. There is also very hard conditions for unemployed in other ways. They are for example to accept job offers anywhere in Sweden in order not to risk to lose their unemployment benefits.

      Before tax I guess that car worker in Sweden earn about SEK 30,000 a month (about $ 4,500 or € 3,300), which means a little over SEK 20,000 a month after tax. If unemployed, the car worker will have less than half of that. Many other groups of employees have extra have additional insurance through the union, but in occupations with high risk of unemployment (like for car workers) this does not exist.

  16. Unfortunately…….It’s all over this is so messed up right now I don’t know how anyone can pick up the pieces and move on from here unless someone has billions to invest in SAAB and even then. This whole thing was botched from the beginning, SAAB never had sufficient financial support once they left GM, never really had a chance always hoping for loans, sales, further financing to come short-term, mid-term, long -term most of it never came and never will kind of sad 🙁 The current economic landscape doesn’t help either..hopefully parts will be a plenty for the folks that have SAABs.

      • …and that wasn’t the case back in March when all of this started. Had EIB acted rationally, then Saab would be moving right now.

        Sales were pointing up at that time, and they had a fair shot at reaching break-even before having to resort to asking for further investments. Also keep in mind that they initiated talks with Chinese partners already October last year, so they must have planned for a safety net. (and make sure they’d reach the break-even point faster)

  18. conspiracy theory:
    Swedish government doesn’t want the SAAB brand associated with Russian and now Chinese ownership since Saab (Svenska Aeroplan Aktiebolag) is marketing the aircraft internationally…
    so they will do (or not do!) everything for the company to go bankrupt so that the brand is saved..

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