News are rare when it comes to the negotiations at Saab and we all are trying to understand what a solution could look like. In this post I put together my own view of what could happen based on what I’ve read and heard during the past two weeks. Not to say that this is the only way, just to point out what is most likely to me.
As we could read yesterday, Pang Qinghua, the chairman of Pang Da was heading for Sweden to further discuss the deal. MENAFN.com quote him as follows:
“Now GM’s attitude has eased up, and I will head for Sweden to have further discussions about related problems.”
Sure, he is as near to the talks as one can be, but I doubt that GM’s attitude has eased up. At least I can read that from all indications the SU crew has gotten from different sources. I would dare to say that a 100% Chinese ownership of Saab including all licensing as it is now will never happen as long as GM has a say.
Since the “no” from GM came we have quite silent times when it comes to real news. All we get to see are statements from the various parties involved in the process. Looking closely at all those statements to me there is a slight difference in what they say. Saab, which mostly means Gunilla Gustavs, has said that there are talks about an ownership structure that could please GM. Youngman’s Rachel Pang did not comment on the question if Youngman would agree to become a minority shareholder. Honestly I’ve never seen any comment from any of them on that issue. So are they still trying to convince Saab of a 100% sale? I hope not, that should be a waste of time.
Victor told the press a few weeks ago that even the old plan with 54% Chinese ownership was off the table, which in my view means that the share GM would be willing to allow for Pang Da and Youngman would be quite a bit lower. Many here say that Victor will an important part in the negotiations with GM as he knows how to handle them. This may be true, he said he warned all parties that the 100% deal would end up that way.
In my opinion the first approach to GM consisted of a deal that made it easy for them to give a plain “no”. The original plan with 54% Chinese ownership had given more room for talks on that plan. Instead Pang Da, Youngman and Lofalk got a bloody nose and had to look for something different. Not clever, to say the least.
Yesterday we had some discussion here that it could be possible to continue Saab without the GM licenses by putting all bets on the Phoenix and a new lineup – I’ll leave that one out here because I think that this will be too expensive for Pang Da and Youngman and will cause too much damage regarding dealer network and customer confidence.
So, following my personal analysis the most likely scenario would be that Swedish Automobile remains to be the parent for Saab and the Chinese buy a stake in SWAN. My guess is that to get the okay from GM this will not be higher than 20-25%. This is a major setback for Pang Da and Youngman and they will most likely not invest as much money as they had planned in 100% ownership.
But where should the rest of the money that is needed come from? The current owners of SWAN have nothing more to give so there is a need for another party to join the table. Most likely some pure investor, as another car company on the table would be rather difficult in negotiations. They get a stake in SWAN, too, in a height that reflects the amount they are willing to invest.
A fear in such a setup may be that too many owners cause too many discussions about leadership. Of course I would prefer a deal that is similar to the Tata/Land Rover and Jaguar constellation, but we’re not in a position to be picky now. A big benefit would be that most likely none of the investors would have to go to their financial limits to get things done. That would bring in more stability if all involved agree to take the same path so that all of them can benefit from their investment in Saab. As we’ve seen from Geely’s latest financial crunch, even the biggest Chinese players aren’t free from all financial strain.
My hope is that Guy Lofalk, who seemed to be pretty focused on China, has his eyes open for opportunities that arise and is willing to adapt the plan to the needs. Same for Pang Da and Youngman – even if they have to accept a major setback in their plans I hope they stay on board to explore the opportunities they still have with Saab. When it comes to the NDRC I can imagine that they will agree to a deal like that as they have some interest in saving the investments already made. The biggest hurdle is GM, but there is a way to solve that if all act together and keep their focus on the common aim.