Talks going on…

Waiting for news to come is never easy. I spend my evening on the couch, browsing the web for info and watching TV. Tonight I saw a documentary about the Titanic. It was not just about how it happened (have seen that more often than I ever wanted), they went to a simulator to research what happened in that fatal night and adapted various parameters to find out how hitting the iceberg could have been avoided. Of course I could not help but draw parallels to what Pang Da, Youngman and Saab/SWAN are doing at the moment. Luckily their ship did not sink when it hit the Detroit iceberg but it took a serious hit.

Rachel Pang of Youngman shows fighting spirit and confirms that they are still very interested in being a part of Saab’s survival plan (Reuters):

Youngman director Rachel Pang said on Wednesday the company will do “everything they can” to support Saab’s survival. She told Swedish news agency TT Youngman still wants to buy Saab.

“Of course we do. If you are afraid you cannot succeed in business. There are always difficulties. One has to find solutions, not just give up,” she was quoted by TT as saying.

Pang declined to answer if Youngman would consider becoming a minority owner in Saab, owned by Swedish Automobile.

I would have loved to get an answer to the question in the last paragraph. I suspect Youngmen to be the biggest problem for GM. They were pretty crisp when it came to pushing the original deal aside and demanded to take over 100%. GM’s refusal to accept this deal may set them back to their original share of 29.9%. They may even have to make further concessions. How far are they willing to go for the sake of the deal? And how much are they still willing to invest if they can’t obtain 100%?

WSJ cites Saab, namely Gunilla Gustavs, who also confirms talks:

Saab Automobile AB said Wednesday that it is discussing a new ownership structure with its Chinese investors, trying to save plans of selling the cash-starved company after former owner General Motors Co. objected to the deal.

“The purpose of these discussions is to find an ownership structure that everyone can agree on,” said Saab Automobile spokesperson Gunilla Gustavs, noting that the proposed 100% Chinese ownership “was an issue for GM.” Ms. Gustavs didn’t provide further details of the discussions.

So while Rachel Pang did not want to talk about the possibility of becoming a minor shareholder, Gunilla Gustavs confirms that an important issue right now is the ownership structure. This is something that raises the question which percentage for a certain owner would be acceptable for GM. I don’t want to speculate on this too much. But what I definetely read into it is that a future ownership structure there has to be a third partner in addition to Pang Da and Youngman – or SWAN needs to remain as a parent company.

Our old mate Swade has a cite on InsideSaab that looks like a piece from an internal statement:

Since GM’s statement on Monday night, we continue to work with Youngman and Pang Da to prepare to respond to GM’s questions on the proposed sale transaction of Saab Automobile AB to Pang Da and Youngman.
The Saab management team is preparing an in-depth communication package that clarifies the new business plan and the intentions for the future. The purpose is to present this to GM and clarify the intentions with the operations in China, thus seeking GM’s consent for the transaction through discussion and negotiations.

While this one talks about work on the sale of Saab to Pang Da and Youngman I tend to concur with Swade, who wrote that the actions Saab takes “include, but are not limited to” this.

Looking at the Swedish media I found something that seems to be from the same the interview with Rachel Pang that Reuters cited, here published by Sverigesradio:

The reorganization plan says that Chinese companies will pay 50 million euros, 450 million SKr. The entire amount has not yet paid, but according to Dagens Industri, was 50 million SKr into Saab’s account on Tuesday.

Are you going to pay 50 million?
– Yes, both Youngman and Pang Da working on it.
How fast?
– I am in a hurry. I can not talk more. I’ll be on a conference call.

While the last answer sounds a bit like comedy we may have to admit that she surely has quite a few conference calls these days. But if we take the Dagens Industri quote here for real and new money arrived this would show that there is still serious interst.

kcaco

56 thoughts on “Talks going on…”

  1. It’s going to take a lot of houses to cover that sum of 2 billion euro that’s been talked about… Nice to hear Youngman’s commitment, I sure think this is THE keep-calm-and-carry-on-moment…

  2. Rachel Pang’s words is untrustable. As I remembered, before the creditor meeting at Nov. 1, she said there is not layoff in the future. Then after the Creditor meeting, there is 500…

    • I don’t really know what my thoughts are with the proposed deal the way it sits, personally I feel a little uneasy… But in fairness to the layoffs, Rachel Pang and Youngman really had little they could do about this because it’s tied into the reconstruction with the courts. She would have been better served to say nothing about it because they are not in a position to control any of that yet.

    • I dont think you can really blame GM for this. VM Made a lot of mistakes with the suppliers and that was really when the you-know-what hit the fan. Im cautiously optimistic.

      • I don’t directly blame GM. I just think the Lusitania was a closer analogy! If you do your homework, you’ll see there has always been a lot of intrigue and controversy about that sinking. Actually I don’t think GM is being either malevolent or benevolent towards Saab. It is probably only trying to protect what it perceives as it’s interests, and keep it’s Chinese manufacturing partner SAIC happy.

        • Yeah, but why did GM sell off the tooling for the 9-3 and older 9-5 to SAIC to begin with? Why didn’t they keep the brand intact try to sell off the whole brand to the Chinese, instead of carving it into pieces ias they did, making the brand less attractive to a potential buyer.

          Sorry, I do blame GM, and I wasn’t an anti-GM person to begin with.

  3. No I’m sorry, but again you’re wrong-the tooling sold was for the Epsilon I 9-3 (along with the old 9-5 (1998-2009). Saab dealers are still selling the Epsilon I 9-3 as an MY 2011 Saab 9-3.

    Please get your facts straight.

    http://www.worldcarfans.com/109121423523/gm-sells-saab-technology-to-beijing-auto

    While details are scarce, GM will transfer tooling (for the current 9-3/9-5) and powertrain technology to BAIC.

    Read more: http://www.worldcarfans.com/109121423523/gm-sells-saab-technology-to-beijing-auto#ixzz1dH0b7Jh5

    Hopefully this comment won’t go to moderation as my other reply (ridiculously) did.

    • For future reference, any time you post more than one link, the spam filter automatically puts it into moderation. Just sayin’.

    • The OG9-3 and the OG9-5 plus the 9-3SS/SC pre 2007 tooling were sold to BAIC. Whilst BAIC has shown cars based on the OG9-5 and the pre 2007 9-3SS, it has yet to show anything that is based on the OG9-3 hatch. That would be quite interesting.

  4. Mr. Saunders:

    Please get your facts straight

    The tooling sold in late 2009 by GM was for the Epsilon I 9-3, along with the old 9-5 (1998-2009). Saab dealers are still selling the Epsilon I 9-3 as an MY 2011 Saab 9-3. It is the current model 9-3

    .

  5. Mr. Saunders:

    By the way, the headline to the story of the worldcarfans story I linked to regarding the BAIC sale in another comment of mine (but is still being herd for moderation as I write this) was:

    GM Sells Saab Technology to Beijing Auto: The Butchering Begins….

    • There is only one little glitch with that worldofcarfans article: If the current 9-3 tooling was sold to BAIC, how come Saab kept making 9-3 last year (and the first quarter of this year)?

      It was reported at the time that it was the first generation 9-3 tools that were sold. That makes some sense, because what we observed was: No more first generation 9-5s produced, but 9-3 continued without disruption (except for the part where GM had put the plant into liquidation).

      I haven’t seen the tools in question. Maybe they had two set of tools. My understanding is that these tools are bl—y expensive and keeping a spare around does not seem to be the norm. I have very often seen stories being misreported, so to me that is the easiest explanation.

      BAIC further confused the issue by buying a new 9-3 that they modified and used as a concept in a car show a year ago or so. But I think it was widely understood that it was not how BAIC’s car would end up looking.

  6. The reason why GM sold the SAAB technology to BAIC is mainly because the original plan that BAIC and Koenigsegg to buy Saab doesn’t go through. Koenigsegg escaped from the deal at the last minute. And then GM was going to shut down Saab. Thus if GM can tear apart SAAB and sold piece by piece, of course it will do that….

    • Why didn’t they wait, and include the tooling in the sale to Spyker? GM still had several interested suitors at the time, so what was the rush? But instead they couldn’t wait to canibalize the company.

      I used to be a GM backer, and part of the reason I bought my Saab in 2005 was out of loyalty to GM. And I have received nothing but mistreatment from the company since….;

      Lutz is particularly a jerk, as he used to talk up Saab all the time on his blog at that time. Now, out comes his self-serving memoirs, and it becomes clear he had nothing but contempt for Saab and its customers.

      Personally, if GM blocks this sale, I think a Class-action lawsuit by Saab customers who bought their vehicle when the company was owned by GM, is in order. It’s becoming plainly obvious to me that this whole charade of selling the company to Spyker and all that has followed has been nothing but an attempt by GM to weasel out of their obligations to their customers who bought these cars.

  7. Oh, and furthermore, the 9-5 tooling that GM sold to BAIC was actually a current model also, at that time, as it was still being sold new at Saab dealers in late 2009. The sale to BAIC occurred well before the arrival of the new 9-5 at Saab dealers in the Summer of 2010.

    GM Sells Saab Technology to Beijing Auto: The Butchering Begins….

    I may make that my taqline on here. It is a very accurate characterization. And very telling considering it did not come from a Saab fansite, but rather from a general interest automotive site.

    • “GM would not be able to support a change in the ownership of Saab which could negatively impact GM’s existing relationships in China or otherwise adversely affect GM’s interests worldwide,”

      From the deal GM done with BAIC, I think this so called “negatively impact GM’s existing relationships in China or otherwise adversely affect GM’s interests worldwide” is nothing. If proper license fee offer, I think GM will give a green light. But from a news I read (no sure it is reliable or not), the license fee GM request from YM/PD is $500M, this price makes no sense… greedy GM…

  8. Oh and if you go to the message boards at the GM Inside Line site, you will see numerous posts from GM “fans” supporting GM’s position in this matter, with comments along the lines of “we need to keep GM strong”.

    I hate to break it to these clowns, but the only thing that has kept GM “strong” was the coerced contribution from myself, and millions of other US taxpayers in the form of a bailout from the US government. A bailout that, to my eternal regret, i supported at the time.

  9. Dreadnought, didn’t Saab/Spyker get to keep the money from the tooling sales? I believe that’s where the ‘fully funded’ phrase originated.

    • At least Saab got to keep a major share. But I am not sure where this discussion is leading.

      The only important thing now is for Saab to work out their differences with GM. As long as that work continues behind close doors, preferably face to face, then I am fine.

      Pie-throwing does not help at this stage.

      • Saab was still GM property at the time the sale was put through.

        Of course GM could say that the money was used to keep Saab going at that time while a buyer was being sought, but then they would say that, wouldn’t they, since they no longer wanted to put any resources into the Saab.

  10. Let’s briefly remember this year’s casualties, just as a little reminder to what is going on in the automotive industry:

    BRISTOL: went into administration, found a new investor who apparently wants to build electro cars by that name. This is disruptive for Bristol as a company.
    ALFA ROMEO: The production of the last Alfa engineered specifically for Alfa, built in a traditional Alfa plant stopped a week ago. The remaining MiTo and Giullietta are Fiat models, using Fiat parts, built in Fiat plants, that just happen to have a styling reminiscent of Alfa.
    LANCIA: Same as with Alfa. Most might say that after the Thesis, the brand was already dead in 2009. But now, the first Chryslers, rebadged as Lancias, should hit Europe, and I think that this is a new low for the brand (and will of course fail).

    • The Chrysler 300 (an Ultimate American Car, and proud of it) will be sold in Europe as a Lancia which is weird as Lancia is a classic brand renowned for forward thinking.
      If this “Lancia 300” is available with the pushrod Hemi V8, they will have made a car to compete with Saab 9-7x when it comes to raping a brand.
      But if it saves Lancia for the future I might see it in a different light. Perhaps.

      • Having recently driven a 300C here in UK for a few days I dread to think what will happen to Lancia. Hideous car with woeful ride and handling. Big mistake.

        • Yup Sorrel, having had a OG 300C tourer for a one year lease, I have to say that I enjoyed it for what it was, large, capacious and importantly it had novelty (I’m not a BMW) value for a while. But a Lancia, never!! At least badged as Chrysler you know what to expect. What rally/sporting heritage is it meant to portray as a Lancia? Criminal badge engineering. Sad for Lancia. Sad for Alfa.

  11. Coming from Titanic’s birthplace, I can only repeat the often quoted explanation that ‘She was alright when she left here’.
    I think that was similar to Victor’s portrayal of the apparent deal as it was launched a couple of weeks ago, but secretly (actually not, he had voiced concerns previously) he knew there was a need for more lifeboats as the 100% sale GM iceberg was unavoidable. I just hope the lifeboat is big enough for most of the Saab crew and their valuables as they chart a new course around the berg to less choppy waters.

  12. http://www.ChinaPost.com.tw
    ——————————————————————————–

    Sweden sees GM’s threat over China Saab rescue as ‘regrettable’: minister

    Thursday, November 10, 2011
    AFP

    STOCKHOLM — A statement by General Motors this week threatening to block technology licenses if two Chinese companies buy Saab, clouding a rescue, was unfortunate the Swedish government said on Tuesday.
    “That was a regrettable announcement,” Swedish Enterprise Minister Annie Loeoef told reporters in Stockholm.

    Her comment came a day after GM said it would end technology-sharing licenses to Saab and stop supplying the 9-4– SUV model to its insolvent former subsidiary if it were acquired by Chinese companies Pang Da and Youngman.

    But GM said it would still supply some components.

    That announcement jeopardizes a last-ditch deal reached by the two firms last week with Saab’s current Dutch owner, Swedish Automobile, or Swan to buy the beleaguered carmaker for 100 million euros (US$134 million) and supply 610 million euros in long term funding.

    Copyright © 1999 – 2011 The China Post.

    • .
      Re; But GM said it would still supply some components

      Memo,

      Dear Customer,
      Your car is ready, but will not have/have the following:

      A GM chassis
      Any GM Dashboard
      GM Lights
      GM Radio.

      Etc, Etc.

      Most parts will be available as accessories through the dealer shop, but will be made in China & not OEM….

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