Waiting Snippets

While we are waiting for big news on how things will continue for Saab the press reports coming out right now offer only few new facts. I put together some snippets and added a few comments to express my view.

Sverigesradio features an article that has Guy Lofalk talking a bit more than yesterday:

There is still money in the car manufacturer Saab for continued reconstruction. And so far there is no reason to discontinue the reorganization, said administrator Guy Lofalk.
– Now the Youngman and Pang Da said they will fund the reconstruction. There are of course of course also linked to how this reorganization plan can actually be implemented.
– But as it stands now, we can hold on for a while but it’s certainly not the time we think of but it is to solve the problems we face, says Guy Lofalk in an interview with the Echo, which was made last night.

This is good as far as the reconstruction is financed for now. On how to work on with GM he says:

Guy Lofalk said that the reorganization plan is preliminary.
– There is a preliminary reorganization plan. Since it is a fact that no plan survives contact with reality, but you must adapt.
– Some things might go more quickly and others take longer. But one must at least have a hypothetical plan to work for, otherwise nothing works.
The first thing is therefore to see if you can untie the knot with GM.
– First we investigate if we can get GM to change their minds and what they then require. That’s primarily what we must do now.
But have no reorganization plan had fallen in with GM’s no?
– As I said at the creditors meeting, there are a number of obstacles and there is no reason to draw any hasty conclusions. Of course, the situation is very serious, it is true.

As I said yesterday, he sounds pretty relaxed. The way to go now is surely to find some point where you can hook on at GM and get an impression what you could do. Reading between the lines of what we heared I tend to think that the big issue for GM are Youngman. It’s about IP and Youngman would be the party that benefits from getting access to it, while Pang Da are just about selling cars. So the big question is if getting back to the original plan with Youngman owning 29,9 % of SWAN is enough for GM or if there have to be additional measures to protect IP from being used by other future spin-off brands. Definetely a tough task that has to be done within a week, before the MOU expires.

The fastest way may be if Pang Da and Youngman have direct talks with GM to find out what kind of adaptions could turn a no into a yes. Victor already expressed this hope on Monday (Sverigesradio):

Muller’s hope is that Pang Das and Young’s leadership can go to Detroit and to negotiate with GM.

GM spokesman James Cain said yesterday that the no from GM was only based on the proposal they got, and this was the 100% takeover. To DI.se he declined to comment on direct negotiations:

Have you now been approached by representatives of Saab, Youngman or Pang Da?
“Our discussions have been with Saab since it is the party we have our contract. All ongoing discussions between the companies is something we would regard as confidential.”

But as “no comment” often means yes to me it’s quite likely that those talks are happening. And even for GM there is something to gain from a continued life for Saab. Future supplies of parts and 9-4x and 60 million for its shares may not sound much but it’s still a bit of money. Even for a big player like GM. And it may be a bit about image as they may not want to be the ones who killed Saab. But all of these things will be weighed against the danger of IP loss.

Sure there is still a chance for a totally different solution, a different deal. Replacing Youngman should be difficult in many aspects, with the biggest being NDRC approval. We always have to keep in mind that they are only here because NDRC made them the preferred partner for the Saab deal. So a deal with other parties would most likely be a completely different one.

And even though I believe that behind the scenes many things are happening now we won’t get to know anything until the MOU with Youngman and Pang Da expires on the 15th.

It is not over, it is just tight. As Victor said, it was forseeable that GM would not let this deal pass without raising demands. There is still hope if all involved are willing to dig for the solution or there is a rabbit left. Both scenarios are still possible so let’s keep the faith.

To end those snippets I chose some comments from the new Maud, Annie Lööf, found on ScandAsia.com:

[…] and Lööf said the Swedish government was “acting as a door-opener in the contacts between Chinese authorities and GM.” However, she stressed, “at the end of the day, it is the parties, Saab and the Chinese (firms), who need to reach a deal… Now (Saab’s court-appointed) administrator and the private parties need to sit down at the negotiation table and find a long-term solution for Saab and its employees.”

Thanks Annie. Good to know that you did all you could even though you couldn’t do anything.

13 thoughts on “Waiting Snippets”

  1. Oh what a suspense……….
    Will there be a future NG9-3 for me in 2013 as I am due to get a new lease car by then?
    IF not, my AWD thoughts are drifting away towards Subaru XV, KIA Sportage, Volvo V60, Alfa something.

  2. I think there will be a deal with GM, I think VM should also go with the the Chinese execs to negotiate. They also should talk to BMW. A lot of work to still be done here, but I doubt GM has too many worries about a competitor that only plans to produce around 200K cars in 3-4 years…

  3. Future supplies of parts and 9-4x and 60 million for its shares may not sound much but it’s still a bit of money. Even for a big player like GM.

    My guess is that this is a rounding error for GM and they could care less. The SRX is hot-selling in the US and I’m sure they could just build more SRX’s there and make even more money that way than the Saab deal…

    And it may be a bit about image as they may not want to be the ones who killed Saab. But all of these things will be weighed against the danger of IP loss.

    I doubt this is the case. Back in Dec ’09, yes, I think killing Saab would have been an image problem, especially with multiple willing suitors waiting to buy it.

    Today, however, there’s one suitor, the YM/PD team, and even the most die-hard Saab fans have concerns that this deal is all about pilaging IP. No, I think Peter Delorenzo, the “Autoextremist,” put US mainstream sentiment well yesterday on his blog when he said:
    “[GM] played hardball this week by pulling the plug on its involvement with Saab over the fact that the new Chinese owners would have been handed instant access to the GM technology that’s in the Saab 9-4X. “Although General Motors is open to the continued supply of powertrains and other components to Saab under appropriate terms and conditions, GM will not agree to the continuation of the existing technology licenses or the continued supply of 9-4X vehicles to Saab following the proposed change in ownership as it would not be in the best interests of GM shareholders,” GM said in a prepared statement. Good for them and it’s about time. Other manufacturers could learn a thing or two by following GM’s lead.”

  4. I am beginning to think this IP stuff is a crock. Why? What to stop Youngman purchasing a Buick made in China, taking it to pieces and copying the important parts? They are GM parts, hardly a company like Ferrari, BMW etl al who truly have some pretty advanced technology.

  5. Nobody thought about the possibility. that the Chinese can to ignore the technology licenses and start production parts for saab in China instead of GM?
    Delirium, or…..

  6. I’m not a GM basher but the hope that this deal will go through because “they don’t want to be the ones that kill saab” or because they are supplying parts to Saab seems a bit naive. GM doesn’t care about Saab, it’s a company run by bean counters, they sold saab because it was cheaper than shutting it down at a time when they were going into bankruptcy and every move they made was being watched by the US media because of bailouts. Not selling Saab at that time would have been a major disaster as many would have asked why they were turning down money while begging US taxpayers for a bailout. Fast forward to today, GM us in a totally different position, they are making huge profits and Saab has been forgotten by most consumers and the 9-4x is selling so little that they maybe even loosing money producing a model that sells less than their niche models. For GM, ending Saab would simplify their business and reduce any threat of competition in china or loss of ip to the Chinese. I do think that a deal could be reached where Saab can purchase tech from GM but the two need to be untwined, GM is going to do what’s best for itself and you can’t really blame them. Saab needs cash and the Chinese have it, if it means dumping the 9-5 and 9-4x, then so be it, neither sells well or had gotten particularly strong reviews. Start fresh with Chinese backing, the 93 and freedom from GM. Might not be a popular opinion but the idea that GM cares at all about Saab goes completely against everything in GMs history if profits over product.

    • Agreed, but surely this is a prescription for a whole new Saab, not a recovery from the present situation. There could be no restart to production until the new 9-3 and other vehicles have been designed and tooled up without GM IP. That is years away and the Company has weeks to engineer a financial solution. It could perhaps be done as a route out of bankruptcy, but in the meantime all the existing interested parties would stand to lose almost everything – the existing shareholders, the supplier creditors, the dealers, the workers and so on. It appears that the only possible short-term solution will involve GM IP.

      Perhaps one possible solution might be that SAIC should for the time being manufacture the cars destined for the Chinese market that still will involve GM IP and that Youngman will gear up to manufacture the new cars (9-1, 9-2?) as they are developed without GM IP.

      At any rate, IMHO there should be a possible solution to this, but it seems that Saab’s fate in its existing state now rests on discussion between Beijing and Detroit.

      • I agree with what you are saying as well, it’s not going to be as cut and dry as I have put it. A glimmer of hope is that GM did try to sell Hummer to the Chinese but the government said no, they even realized what a terrible brand it was : ). If GM was able to come to a deal with a Chinese company before, maybe they will find a way to do it again.

  7. This was my idea too, but the problem is that “the 93 and freedom from GM” isn’t actually possible as apparently the NG 9-3 is 50% GM tech… THAT’s the problem, far more than the 9-4x or 9-5.

    • It’s not 50% of the car parts itself, but more the manufacturing process (and 50% is even high then). GM is still fairly crucial to any conceivable business plan going forward. While it may seem productive to play business strategist or predict outcomes here, I assure you the final result (if it’s a positive sale) is going to be so convoluted that it won’t resemble any particular logic that we might ascribe to. It’s wait and see at this point. There are too many moving parts to nail down a particular outcome, between reconstruction protection, deadlines, financiers’ wherewithal, tech agreements, previous bridge loans with their associated tech agreements, and even a few executives at GM’s attitude, there is no way to accurately predict what’s about to happen. There are several plans floating around at the moment, and the best approach is just to wait and see. When we get a hint of what really will happen with some certainty, you’ll know.

      • Hi Jeff; thanks for the update. I’m having heart attacks waiting in the “dark” here….
        So did the Hunter show up at all , or is this yet another story?

Comments are closed.

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.