So it’s Friday again and we get news that could make us worried. In this case it is not that surprising. I for one did never expect that GM would just give green light without having a deep thought about it. They know Youngman from the sales process in 2009 when they showed up to take over the Saab brand, albeit without the intention to save the company.
While of course I don’t exactly know about the reason for that statement there are a few issues that could make the negotiations about a sale to Pang Da and Youngman difficult. I don’t want to jump on conspiracies here like GM wants to extinct Saab. This would make no sense since GM earn quite some money from license fees, supplying parts and building the 9-4x without facing a serious threat in sales.
A quote from the WSJ article TimR published earlier:
“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,” said GM spokesman Jim Cain.
So what are GM’s interests worldwide? The first thought would be that it is about the IP featured in the Saab models. While we don’t know what is featured in the next 9-3 I believe we could say that the IP featured in the current 9-3 and 9-5 is no longer that exclusive that it would justify such a move by GM. The elder 9-3 was even sold to BAIC. I think we can rule that out for the current models.
Second thought: in China GM is pretty successful. A big seller seems to be the Buick Regal. Being a sister model of the 9-5 GM may not want too much competition here. They even banned Opel from going to China, which, from a global strategy where to position the different brands may make some sense. But there may be more than that since I don’t think the 9-5 would be a huge threat for the Regal in the near future.
My third thought is about the current partnership that exists between GM and SAIC, who both hold equal shares in the joint venture Shanghai GM. It may well be that their contracts contain certain clauses that deter GM from allowing other brands to use the same IP as in Shanghai GM in China. It would also explain why Opel can’t expand to China, and it would of course apply to Saab, too. And it would be the toughest case to negotiate because the NDRC would most likely not interfere here. They may even be the ones who asked for such a clause.
To paint a complete picture of how complex this situation is you also have to keep in mind that GM as a big supplier to Saab may not be satisfied with the payment plan Pang Da and Youngman are going to offer and want to put some pressure on them. And then there is those shares GM still has in Saab, worth $326 million. Those shares could be converted into SWAN shares in 2016 if I remember correctly but what is that worth if SWAN is no longer the owner of Saab? I haven’t read anything about that issue yet. But I could imagine that GM would like to sell those shares at some price. There were those rumors a while ago that they offered those shares to VA for a discount price.
You may weigh those issues by yourself and make your own conclusion. But remember that those are just my thoughts and to me there is no room for conspiracies in here. I am pretty sure this flat out about business interests or obligations.
So am I worried now? Not really. Those problems were foreseeable for SWAN and their Chinese partners. We learned that getting approval from GM is the job of SWAN, if not to say Victor. He is surely one who knows how to handle GM. And in addition to that, he did never show up without a backup plan. And I have a feeling that this time will be no exception from the rule.