In the middle of writing this one the news about a new offer broke. I still decided to post it, albeit with an alternative end.
In times like these even a small comment can cause a lot of disturbance and frustration. As we reported, GM will not take a different approach to the negotiations:
“We have not changed our point of view. We are not negotiating with the Chinese since our contracts are with Saab,” said GM spokesman James Cain.
But in the end, what does that tell us? That GM is not willing to let Saab succeed? That GM wants to kill Saab? No, absolutely not. The only thing they are saying is that they want the orderly structure in talks to remain. They have contracts with Saab, so they want to talk with Saab, or maybe Swan as they are the parent. To bring it down to a simple example: you want to buy a car at your local dealer. That car is in stock at the dealer though it is still financed by the manufacturer. Who do you negotiate the price with? Of course the dealer. You don’t go and call the manufacturer for negotiations and if you do, he will tell you to contact the dealer. Nothing else is happening here.
Though GM are crucial to get a deal done they are somehow on the sidelines. The first thing that has to happen is that Saab/Swan, Guy Lofalk, Pang Da and Youngman (and maybe another party) agree on a deal in principle. This deal not only has to satisfy the parties involved but also those who have to give their ok. GM don’t want to be part of that first stage of talks as it is simply not their job, but they’ve directly and indirectly communicated a structure they can live with.
Ever since that cowboyish attempt to quietly sell Saab to Geely, Pang Da and as I believe especially Youngman have taken the route of trying to take over 100% of Saab. The first try was dismissed by Swan, then later, as they had no choice, Swan accepted the offer, despite or because they knew that GM would never nod to that deal. As Victor said, if GM had wanted to sell Saab to China they would have done so in 2009. From reading the statements about what Pang Da and Youngman have sent to GM after the initial “no” it somehow sounded like they wanted to explain GM what they want to do with Saab after they have taken over 100% to take away the fears and get the ok on a second try – if so, it has been nothing but a waste of time. From what we’ve heard GM has communicated clear demands for a deal that they could agree on. And this surely didn’t include a 100% Chinese ownership.
In the end it is not even relevant why GM doesn’t want to license their stuff to a Chinese owned Saab. Be it paranoia or pure business – they have the right to take a decision that fits their own interests best. The situation is as it is so there’s no use complaining, a solution has to be found. Someone can write a book on why it was that way afterwards but for now – it is as it is so the plan has to be adapted.
Since the Chinese are known as clever businessmen I tend to think that at the same time they talk internally about alternative ownership structures to get things done. As I said, they should know what GM is up to so they can set up a plan that has a fair chance to get through all approvals. Maybe a plan that includes someone like NSC to bridge some years until GM is not as crucial as they are today and a 100% takeover can take place easier. A way that lets Saab survive and the Chinese preserve their investments already made. There should be a way.
News today indicate that Pang Da and Youngman are now trying a different approach: buy the licenses for the current Saab models from GM (ttela.se):
According to DI’s source is the Swedish government and the administrator Guy Lofalk ready to go over to the U.S. and Detroit, where GM has its headquarters, to negotiate the matter. By contrast, no Saab CEO Victor Muller to be with.
“The ball is now at GM. Either it will be a positive response and then start negotiations. Or there will be no, and then wait bankruptcy for Saab,” says DI’s source.
I don’t know if that is the move GM is looking for but if there is some serious money on the table it may come down to a win/loose calculation for GM. A saying is that everything has a price tag and that may also apply in this case. If the talk of possible bankruptcy is a sign that this is the last attempt to convince GM or if it is a try to create some pressure, who knows. I don’t know when SweGov really jumped on that process but they seem so see the importance of getting things done now. How serious Youngman still is about Saab can be seen from the fact that Youngman sent the funds needed to continue the negotiations and pay the wages.
In the meantime, Youngman should be borne by cash flow of Saab during the reorganization period. According to DI, Youngman put in 20 million [SEK] in Saab’s account yesterday. Pang Da and Youngman is also expected to cover the cost of wages to be paid on Friday and Monday.
Victor seems to step back a bit right now to let things go. Two possible reasons for that: either he wants things to go on and as there were some indications that Lofalk did not really want to work with him he steps aside or this is another solution he has no faith in.
DI has also talked to Muller about his role in the negotiations and indicating that he has increasingly fallen into the background.
“GM will first need to digest the information gained from Saab. It is up to Youngman and Pang Da which they want to conduct the negotiations with GM,” writes Muller in an SMS to the Financial Times.
While Guy Lofalk counts as Saab representative right now, somehow this sounds as if Pang Da and Youngman still want to get in direct negotiations with GM. Or, more likely, they chose to trust Lofalk more than Victor and want him to talk to GM on their behalf. Whatever this is, I just hope the Chinese did listen to GM and the new offer brings things forward. And if that’s case, I’m fine with it.
On a side note: if we ever want to know what this Geely thing was all about, someone should ask Guy Lofalk soon. He might forget that this ever happened (Ny Teknik).