Ny Teknik on building Saabs without GM licenses

Ny Teknik have an interesting article on how Saab could produce cars without being bothered by GM:

GM can not stop Saab, or the person who buys the company from building a new generation cars. All the basic technology is controlled by Saab. Thus opens the way for Chinese Youngman and Pang Da.

The next generation of Saab cars are based on Phoenix, a kind of basic drawing and basic design that can be used for a number of new car models. It is controlled by Saab, unlike today’s cars, which GM owns a large part of the technology.

They talk about the new 9-3 that is under development:

The first car that Saab will build on the Phoenix architecture is the next generation 9-3, internally known as the 540th More than half the car comes from outside the Saab, including a number of components and systems that GM can now stop. But it’s not a disaster. At worst, forced Saab to find new suppliers to the corresponding components. These are about 500 part numbers, less than ten percent of the total number of components in the 540th

Nor is it certain that GM will ban the Saab to use these components. In its statement last week highlighted GM’s spokesman James Cain that is open to continue to supply engines, transmissions and other components to Saab on commercial terms.

Basically I see their point. Skip the GM models and continue with cars developed on the Saab-owned Phoenix platform. GM may even still supply some if not most parts for the next generaion 9-3. They could even keep supplying the 9-4x as it is built in Mexico in a GM plant. Should be not too dangerous regarding IP, maybe adapting the contracts a bit would be enough. The lack of a 9-5 – not sure if that would be a huge problem for now. The 9-3 has always been the bread and butter model.

All that sounds reasonable, but do Pang Da and Youngman have the funds to build up Saab from that point? To finance development of an entire range quickly without making money from producing the current models? Not that I’d completely doubt that but it would be a even bigger task than the original plan.

Yes it is possible, but it would most likely demand even more money than the Chinese had planned to invest. Most of all, though, it is a tempting thought.

What do you think? Have your say in comments!

39 thoughts on “Ny Teknik on building Saabs without GM licenses”

  1. Hmm so if I get you right: 9-3 Griffin dead, 9-5 NG dead, 9-4x dead…(no production any longer…)

    There is only one reason when this would make sence to me: NG 9-3 ready for mass production within a year!!!

    What about the production workers and remaining fixed costs? Can our friends from the east cover that?

    • Thinking about it, there may be a way to continue the Griffin until the next generation is ready, if it’s made sure that the production stays in Trollhättan. I posted another article on GM tech in Saabs cars a few days ago, where it looked like that model could not be the big problem…
      When it comes to the 9-4x, as I said, maybe GM would be willing to supply the vehicle for some time.

      At least, it would be interesting how GM would react if they were confronted with a plan like that.

  2. This plan has only a slightly glitch, customers and dealers have already been waiting for 7-8 months to see production start, and if things go without a problem, we won’t see production restart till February or March 2012.

    By trying to live without GM tech the waiting for production restart would take another 12-24 months longer, as I think that the 9-3 Griffin would also be dead. So how many dealerships will wait that long? And how many customers?

    Saab Automobile has to find a compromise that GM and YMPD can live with, this is the only solution to the current problem, the only concern that I have is, will this compromise also be good for Saab Automobile AB? Maybe not.

  3. I do not see anything in this article that would prevent SAAB from continue producing the 9-3 and 9-5 in Trollhättan and buying the 9-4 from GM. This is as it is and as long as production of any of these platforms are moved to China, it should be acceptable for GM, even with the current contract of technical licenses.

    On the Phoenix platform, 10 % sounds like a small number, it could be even smaller, but it all depends on which parts are re-used from GM and the possibility to find an alternative supplier of these parts which, unlike GM, is willing to let the Chinese get access to the technology.

    Then, if you see this in the long run, what has happened in many areas during the last 20 years is that China have taken over the majority of world production from Europe, US & Japan. Look at electronics, 20 years ago only cheap stuff came from China, now Apple is producing all its products in China and Customers are accepting the quality level = this is not worse than made outside of China. I can list area by area where production have move into China with factories closed outside of China.

    Now the Chinese manufacturers of cars are building up the competencies through different joint ventures with foreign companies. They are not really exporting large amount of cars, but in eight to ten years time, they will have large market shares in Europe and US (probably not Japan due to their import regulations and the relations between Japan and China). This is what NDRC are orchestrating right now with building up the clusters of major manufacturers in China. If SAAB becomes part of this cluster, this is not necessarily bad in the short run, but the risk is large that in the long run, SAAB cars will be completelly made in China (as will other brands as well). Nothing can be done to stop this, the major manufacturers are having a party in China (including GM) but the party will not go on forever…

  4. It sounds possible, but is it reasonable ? That would imply no new SAABs for a year and a half ? The 9-4x and 9-5 could easily increase its sales worldwide, specially now with the introduction of the combi. And I disagree with people saying the 9-3 griffin is dead. That car could still sell a lot ! It has enough value for that.

  5. I’m sure a compromise deal with GM could be made, where only new Saab models that don’t feature GM IP would be produced in China for the Chinese market. This would make Saabs costly imports to China (due to high tariffs) and would probably shorten the life of the 9-5 quite a bit. The 9-4x is probably irrelevant as GM is basically an OEM supplier and Saab just sells the car on, although I’m sure Saab’s new owners would prefer to start making their own replacement car as soon as possible. This would not cause any embarrassment with SAIC as the number of Saab 9s (using the same IP as SAIC’s Buicks) sold in China, would be very small. In the meantime it would be pretty much business as usual at Saab, except for all the development work needed to fast track some model replacements. I’m sure Saab has already done some preliminary work on moving the 9-5 and 9-4x replacements over to Phoenix?

  6. As has been mentioned earlier, when discussing the Phoenix platform, it is thought that it can be used for different models over time, it’s the whole point with such platform, and then when discussing the replacement for the current 9-3, which will the first one on the new platform, it has been said that some parts may be GM tech, at least that’s the impression one might get.

    This has for some, as it seems, meant that the Phoenix platform itself must be full of GM tech, and thus that one would need something else, to be completely free. I’m not so sure about that; different percentages have also been mentioned. Platform is one thing and different models are another. And in this case, as mentioned in the article, they had decided to use some systems and components from GM just because they were satisfied with them, and it could lower the cost (on that model).

    But it’s very difficult to discuss, when one knows next to nothing. And then we have the implications of no other models, but that’s another, related, topic. What they mention is that it should be possible to build on the Phoenix platform.

    • Phoenix is supposedly loosely based on the old Epsilon 1 platform that underpins the current 9-3. GM gave this platform to Saab as it considered it “old tech” when compared to Epsilon II. It probably didn’t expect Saab to create Phoenix, but unless GM is some kind of ‘Indian giver’, it can hardly complain about IP in some that it’s given away and abandoned.

    • Sh*t happens. It comes down to a moral question in many ways. Odds are that Saab would have moved production to China anyway after a few years. Every other industry has. Why should the automotive industry be different? If this is true then it is a only a minor point to worry about the future of the people in Sweden. Dealerships can be replaced with kiosks at company owned service centers and by good web stores. Apple showed that.

      Personally, the idea above pisses me off. I would like a local dealership with people I know and a car built by families, but when you are asking for money you can’t behave as morally as you might want to I suppose.

  7. Got to love this sentence:

    “GM can not stop Saab, or the person who buys the company from building a new generation cars.”

    The thought struck me long ago, it´s possible when it comes to technical skills etc. but the financial parts makes me troubled… Just hope the chinese are ready to take a leap into the right direction.

  8. Hope you did not understand me wrong! Wrote Griffin dead I meant it would be dead without gm licence…!
    And I agree the Griffin would be “the seller” until the NG 9-3.

  9. As I have said before: IF GM do have just a little goodwill, a solution could be found: Current Saab-models only produced in Trill-hättan and new models using no tech (or only some specific components) from GM …

  10. This is just a theory but definitely not possible to pull off. SAAB needs to start producing cars ASAP. Chinese will not be able to wait for that long. Alternative is horror: If Chinese by any means accept the situation and decide to wait for the new platform, then they will probably just keep the R&D in Sweden and move the whole factory to China, leaving thousands of SAAB workers jobless.

    One other thinking I have: It would be interesting to know why GM set the stop. Two options:
    1. GM themselves decided that Chinese SAAB is risk for their brand at least for now and with this ownership set -up.
    2. Chinese partners demanded from GM to not let another Chinese company get their IP.

    If 1. then I think the negotiations might result in some kind of deal. But if 2. then I am afraid the negotiations will not result in much positive.

  11. I have said that already earlier, SAAB might go ahead bulding current SAAB models on the GM platform (as GM makes good money out of it too) while they should seek another partner (e.g. Toyota or BMW) to work on new models for the world-wide market in the future. I don see that deal so complicated as GM would be also a winner to get money as long as SAAB builds the models while no technology transfer will take place in the future models (and to China)….ok, I assume that the next generation SAABs will have four wheels too but I hope that is not IP from GM 😉 …..

    Honestly, GM did not really help SAAB by bringing new models anyway. Look at the out-dated new SAAB 9-5. Yes, this is my honest opinion! Its heavy, huge and non-ecpnomic…do you really think this are attributes that suit SAAB? My old 1999 Saab 9-5 with Abbott tuning (about 350 to 400 HP and > 550 Nm) needs 8-9 L on highways and 10-11 L in the city being 1500 kg light. A friend of mine drives a new 9-5 with more than 2000 kg, 260 HP (Hirsch) and never drove the car with less than 12 L any road! By the way the road holding of the updated old 9-5 (upgraded chassis and brakes, LSD etc…) easily compets with the new 9-5 Aero too while in terms of accelaration, speed and sporty feeling it is simply much much better. Thus, SAAB should return to make light sportive indivdualistic and rather economic cars instead of heavy huge and non-economic flagships. Since this time, I shall drive my old 9-5 hoping SAAB will have the chance to find its roots again soon.

    • The 9-5 outdated ? No way. Yes, it’s heavy…as in safe, Still it’s nimble and when driving doesn’t feel it’s 5 meter long. And if someone is looking for economy, they will buy a diesel one, which still surprises even the motor journalists with less fuel consumption in real world driving that published.

    • wfg,
      if the 9-5 is outdated, what do you say about the Cady XTS with an estimated start of production in spring 2012?

      Yes the XTS is nothing but a 9-5 but in Cady shape.

    • Sorry if my comment was disturbing. I did not mean that I do not like the new Saab 9-5 but at least in Europe you hardly will sell such a car. Even the competitors turn to smaller and lighter with far better fuel efficiency. For example, while Saab introduces a rather old V6, Volvo, Mercedes and BMW introduce strong R4 engines even to their luxury lines. In addition, the gasoline engines are subject of great changes (e.g. CGI of Mercedes) that are just slightly better than the old 9-5 Aero. Honestly, I think the new Saab 9-5 is nice but too much influenced by America’s GM…..and by the way, did you ever checked how much Cadies are sold in Europe?
      Regarding the diesels, it is true that they are quite efficient while perhaps not really an alternative against the luxury diesels of other European brands on the respective markets.
      Please don’t get me wrong. I love SAAB, I always will. But, just like I preferred to invest a lot to refurbish and upgrade my old 9-5 as I felt the new 9-5 not suitable for the current (economic, sportive and power) needs, others turn away and take other cars, and, after all, that does not help SAAB at all.

      • I think in some ways you are being realistic. I will always contend that the NG9-5 is what GM envisaged for Saab, but very likely not what Saab would have truly envisaged. It was probably the best thing Saab was going to get out of GM, but as to being the best car for the times? Possibly not. For this reason I’m glad that Saab has been able to design the 9-3’s successor with little or no influence from GM. I just hope the project comes to fruition.

  12. As I understand this,
    No GM regulations are stopping SAAB from producing cars in Trollhättan and selling these to China. Right?
    GM don’t mind licensing their technology to China. They already do this through the joint venture with SAIC, 51% owned by SAIC.
    What’s left is the possibility that the agreements with SAIC prevents GM from licensing to other parties in China. If this is the problem, it should be negotiable and not that hard to solve.

    Unless there are other issues here…
    SAIC is 100% owned by the Chinese government. The major stakeholder in GM is the US government, another big stakeholder is the Canadian government.
    I’m afraid there is politics behind all this.
    Trollhättan might have become an battleplace in the US-China trade war. With the Swedish government as paralyzed onlookers.

    • No, GM have a clause in their contract saying it is no longer valid if the company change ownership/control. So if the Chinese control SAAB they will no longer allow SAAB to use their technology. Under what (if any) conditions GM would allow new ownership and still provide their technology and parts is not known. SAAB and YPD have to negotiate with GM. The big question is why they didn’t do that before the deal to sell to YPD?

      • So far they’ve turned down a russian and some chinese.
        Either they won’t allow an owner with money in his pockets, which makes no sense businesswise, or they don’t like the livinghood of these guys, which is politics.

        • I mean it’s a strange way of doing the negotiations. They have had years to discuss and negotiate with GM what their conditions are for a change in ownership. It’s more or less pointless to negotiate deals if they don’t know what the response from GM will be. The development during the last year is exactly what I feared when they allowed both GM and EIB to put a rope around the neck of SAAB with the option to pull it whenever they like.

  13. Till, I am not quite following the logical leap in your argument when you say Saab would not be able to sell the current models. Perhaps I have missed a key element. in GM’s ‘no!’

    • That whole thing is related to a scenario where you try to continue Saab without the licenses from GM. So in that case 9-5 and 9-4x would be in danger, maybe a deal on the Griffin could be found since it is “old” technology.

  14. I just wonder why nobody is asking the other way ´round: Saab influenced the whole technic of GM models, especially while the development center was based in Rüsselsheim. Look at the actual Insignia and you see more Saab-influence than what Opel could brought in. Turbo, driver-orientation, safety etc. GM should have a look how far they where before GM-Saab and now – but maybe that´s what they did and what they are afraid of…

  15. I do not see the slightest of chances for SAAB to survive without GM IP.
    This would mean SAAB can virtually not sell ANY CARS (except the available stock, if GM agrees) for at least 10 – 18 months.

    I don’t see anyone around who could provide the funding for the development of three or four different types of cars (9-3, 9-5, 9-2, 9-6 or whatever) virtually WITHOUT incoming money.
    As I see it, without the production of the current model line-up, SAAB will have to be closed down.

  16. I like the idea of GM being the ultimate looser. They cut off their SAAB to spite their tailpipe! Because of their greed which I wrote about last week they would loose money on components that they could have sold and made a profit on why dealing with SAAB.
    A pox on both their Volts!

  17. This is what I was saying weeks ago! I love this paragraph:

    > All that sounds reasonable, but do Pang Da and Youngman have the funds to build up
    > Saab from that point? To finance development of an entire range quickly without
    > making money from producing the current models? Not that I’d completely doubt that
    > but it would be a even bigger task than the original plan.

    This SHOULD HAVE BEEN the original plan in my mind. The idea that Saab was going to break even from the start was pure fantasy in my mind. I said back in Dec ’10 and still say now that anyone buying Saab needs to be ready and able to absorb YEARS of losses before maknig money. And those losses would still be far less for YPD than the cost of starting a brand new car company from scratch.

    How does Saab survive those 10-14 months? Mothball the factory and lay off the workers. Folks, this happens in industry all the time. One company fails, shutters, another company buys it, and restarts the factory. Simple. No salaries to deal with for about 1 year would help DRAMATICALLY. I know it’s easy to say, hugely painful for Trollhattan and its citizens, but it’s better than NO SAAB FOREVER.

    How do the dealers survive? Many might not, but I’ve heard one or two dealers say that service and used sales are actually quite strong and, here in the US at least, any dealer still running has already figured out a way to survive with almost no new sales. And, hopefully, they can strike a deal for the 9-4X (I think the 9-5 is dead in the US market at this point, it may not be worth bringing it back until a next gen).


  18. Too bad Saab didn’t focus their efforts on preparing the NG9-3 for production when everything hit the brakes earlier this year. With 10 months of focused efforts you could get that car ready to go. I understand all the logistics involved would mean it would be very difficult to pull off, but the logically, it makes sense to just start over at this point.

    The 9-3 is the biggest seller for Saab by far, and they haven’t made any cars in months as it is. They may as well cut bait, get out of the old models and start over. Not supplying cars to current orders looks bad, but getting NG9-3s on the lots is more important at this point unfortunately. Especially if they can get all three body styles out as soon as possible.

    This whole story just makes me sad. It’s not fair.

  19. The Phoenix is just a concept platform at the moment, i.e. all the ideas and designs are there but NOT the tooling for mass production. That tooling (and the change in infrastructure) is going to cost a huge amount of money (hundreds of M$). Without the ‘old’ models acting as a financial buffer, this plan comes down to building a new production line (and supply chain) from scratch. Somehow I don’t have the feeling that Pang-Da/Youngman or the the Chinese government will agree to such a deal, except when this production line is set up in China.

  20. If I’m not mistaken, Saab can sell the current 9-3 and last gen 9-5 even if GM say no. I mean, BAW are making them in China, Saab could potentially import them and call them 9-5 (or perhaps 9-4 is more suitable) and 9-3.
    Am I right or wrong?

  21. Money talks!

    And letting Saab continue to produce cars with the GM platforms should be real money even for GM.
    Let’s make up an example.
    The license for each car is at no cost for GM so that goes straight into their pockets. GM will also continue to sell components to Saab at a profit. So how much money can GM get for this?
    Just for the sake of the example. Say that the license is 1500 euro and the component profit is another 500 euro. In total 2000 euro per Saab.
    If Saab produces 50 000 cars one year that adds up to 100 million euro
    100 000 cars 200 million euros.
    How many cars would Saab be able to produce and sell with these platforms before replacing the platforms. For the 9-3 we are talking about 2 years maybe. And for the 9-5 some more years.

    Say that year one is 40 000 cars.Year two 80 000. Year three 80 000 (Phoenix starting to sell). Year four to seven 50 000 cars.
    In total this would be 400 000 cars and 800 million euros.

    Note that all these figures are made up,
    But it still shows that there could be some real money for GM. In the balance they must consider that Saab might be a competitor in the future. Question is how much market could Saab gain in China and of that how much from GM?

    The money is easy. GM does not need to do any marketing and sales. No warranties. Just cash in and get even more volume benefits.

    How stupid would you say these figures are?

  22. I have my doubts about this.

    GM seller financed the sale to Spyker. If GM has to repossess Saab in bankruptcy, normally a repossession by a selling company of a purchasing company allows the selling company to acquire all of the purchasing company’s assets, including the rights to repossess new products, as well as repossess the products that were originally sold. The right to repossess normally attaches to both new and old products, both new and old inventory, and both new and old equipment.

    So I think GM may well have the rights to the new Phoenix platform. Think of it this way. GM indirectly financed the building of the Phoenix platform. Saab was allowed to build it while GM refrained from requiring payments on the debt Saab owed GM.

    So, I think GM has the rights to Phoenix, unless some real unusual seller financing took place when GM sold to Spyker.

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