The Backside of Tactics

A week ago we were extremely eager to hear who will buy Saab. After weeks of waiting news outlets reported that the deal was about to be signed. As our friends at wrote yesterday even the Vänersborg court had on the 24th of May sent out letters to the creditors saying that most likely be only the legally preferred creditors will get some money. Another indicaion that NEVS was on the home stretch in this deal.

But now things went quiet again and we are asking ourselves what happened. Of course Youngman’s new bid is one issue in this. But to get a more complete picture of recent events we have to go back in time a bit.

A few weeks ago the receivers came up with an idea: they untied the big Saab package and made seven smaller ones. Their tactic was to get more money for the creditors through that and they expected that either Youngman or Mahindra would come and buy all those small packages together.

As we know Youngman were sent home as hey could not show the money. And Mahindra? Well, they have a huge interest to buy Saab but not at any price. I can imagine they were not too happy with the way the receivers tried to raise the price so the went to passive mode.

Just at that moment NEVS showed up, picked some of those seven packages and made a bid for those. While we do not know which ones they took, this of course explains why they made it to the finals with a bid that seemed to be pretty low. At this moment the NEVS tactics seemed to beat those of the receivers.

The deal was practically done. For the first time in months some info leaked. While we were waiting for the announcement negotiations continued. Maybe as some sources say it was about making some final adjustmens to the price but you can be pretty sure it was just a low single digit number of hours from the signing of a final deal when Youngman’s new bid spoilt everything.

Maybe NEVS should have acted quicker but personally I feel that it is pretty sick that the Swedish bankrupcy law forces the receivers to examine that last minute bid. In my view there should be a point in time when they could shut the process to make a deal ready for signing.

In the end this bid evaluation reloaded prolongs the process and annoys those who were about to sign a deal. I even dare to say that this is one of he main goals that youngman had. They lack credibility because of their track record in the whole process ever since they showed up a year ago. I do not see them become a frontrunner if there are other options.

I won’t start explaining my reservations about Youngman again, if you didn’t do already you can find it here. The fact that they showed up just costs time. It actually reminds me a bit of the time before bankrupcy when they always sent just enough money to preserve Saab from dying but not a cent more.

I really hope that NEVS stays in the game and maybe even Mahindra gets out of their passive mode. I still see the possibility for a good solution for Saab. But there is not another half year of time to find it. Tactics are a nessesary thing in business but there is also a time to fight out in the open. And I feel the time is now.

60 thoughts on “The Backside of Tactics”

  1. In other words, the receivers got greedy (albeit not for themselves, presumably) and in the process may have really messed things up by unintentionally elbowing M & M out. Now they don’t have a buyer for Saab Parts, except for Youngman whom they don’t seem to favor in general, and they end up making less for Saab’s creditors than they might have if they had refrained from engaging in last-minute overreaching. I am still hoping for the best and trying to keep an open mind about whoever prevails, be it NEVS, Youngman, or M & M. Even if not for me in the US, some Saab in Trollhattan is better than no Saab. Thanks for the insight, Till.

    • Did the receivers outsmart themselves? Guy Lofal much?

      I don’t see how any of this is “good” for Sweden. You sell SAAB for less piecemeal, the potential buyer now only pays legally peferred creditors, and SAAB parts is not part of the package to service and bridge over an insanely-loyal customer base?

  2. Spot on there till72. They threw their toys out of the playpen then come back at the last minute. The bankruptcy court should have told then to get lost!! Kinda makes me angry. No it REALLY makes me angry!!

  3. To me NEVS is a dead end, they are in it for the money and they do not intend to make any new SAABs. At least that my guess. Youngman is not the perfect bider but I prefer them over NEVS. Which leaves M&M as the only buyer that is credible in my view.
    As I said before, EVs are not interesting since they tend to cost to much and they can´t replace a normal car. Having said that, the only way to go is to start producing the 9-3 again but this time with the eXWD solution, that’s the only thing that makes sense. Besides if they do not start producing something that is similar to whats been built and sold for the last years, I think that the dealer network will be completely gone if there are no cars to sell. And that means starting all over with a new network and that will take many years if it’s even possible. Because the dealers doesn’t just have to sell the new cars , they need to know the heritage of SAAB and if they don’t do that it will never work.

    In other word, it is essential to get cars in the showroom again and not to make any drastic changes in the lineup because that will scare customers away. Just tweak whats available and relaunch the brand, otherwise I fear that the cause is lost anyway and SAAB should be best left for dead.

    The factory and it’s workers should be able to get a new job building cars but it will not be SAAB in that case.

    • “To me NEVS is a dead end, they are in it for the money and they do not intend to make any new SAABs. At least that my guess.”

      Of course. I indeed think the people behind NEVS woke up one day, felt like throwing away 1.5 billion SEK and launched a bid for Saab. Please think before you comment, will you? No bidder for Saab is in it for the money: any firm/consortium now bidding for Saab is taking quite an investment risk. Furthermore, a little bird told me that NEVS is actually very much intending to build new Saabs, albeit new Saabs with hybrid and electric drivelines.

      • What a bird has told you is for you to specify if you comment shall be of any interest.
        And according to the newspapers NEVS was not interested in SAAB parts and to me that means they are not serious.
        To me EVs are a dead end, and I did think before I made that comment, no matter what fauna you talked to.
        So to me NEVS is still a dead end, wanting the nohow etc from SAAB but I doubt very much that there will be any new SAAB built, at least in Sweden. And if you have a problem with with my guess that’s your problem.

        • I have to agree with you to some extent. NEVS as the sole owner of Saab would be a dead loss. However if it had just a partial stake in the brand, I think it could eventually be quite good for Saab. The important thing is that Saab has to make conventionally fueled cars for at least a decade, whilst a range of EVs and Hybrids are developed and gradually become part of the model line up.

            • I am also warming up to that. Electric cars are a good slice of the pie, but they should not be the entire pie in 2012 when no modern country has infrastructure in place.

              An anology that I will use is from the video game world. The manufacturer SEGA always came out first with the next level of hardware. They did this at 8-bit, 16-bit, 32-bit and 64-bit. The machines were always expensive at first so not a lot of loyalty was built up. Then Nintendo or later Sony would come up with a machine (sometimes superior, sometimes inferior) and they would hop right in to a market that warmed up to the idea of the next big thing.

              Through this process SEGA reached the conclusion that they should stop making hardware and only make software. Being first, before there is demand for the product, is not always a good thing.

  4. “A few weeks ago the receivers came up with an idea: they untied the big Saab package and made seven smaller ones”

    DEAR GOD! No wonder M&M went quiet. This also sounds like a perfect opportunity for those who want to cherry pick Saab into pieces and part ways with the existing customers (Vo…I mean NEVS?).
    Just think of the damage this process has done to the new start -if we’ll ever see one. This is unbelievable. Only in Sweden…

    • I completely agree with you.
      I am chocked that the receivers do change the rules of the games at the last moment and offer 7 packages.
      If on top of that no one knows who has made a bit on what it is no wonder that Youngman tries to make a bit again, even last minute, for all of these 7 packages and that while they are interested in buying it ALL.
      I do not see what is wrong with that approach.

    • It’s amateur hour in that court—-these people are clueless about how corportaions work, how business works. Isn’t that ironic?

  5. So SweGov thought they were being clever by carving up Saab (after publicly– and repeatedly– saying that they preferred to sell it as a whole entity) , and managed to scare off the only credible buyer they had in Mahindra. Unbelievable. Saab has died a dozen deaths between GM’s negligence as an owner (and arrogance as an ex-owner), and SweGov’s constant meddling and destructive attitude towards this company– Maud, Guy, the current administrators have all done their level best to destroy this company. Now we are left with 2 very unqualified buyers to choose from, and if I understand this correctly, if M&M were to miraculously place another bid, the whole process will drag on for another month. I have never lost my faith in Saab’s ability to survive– but this news has suddenly dampened my hopes somewhat.

  6. I hope this gets sorted. The receivers greed could cost the creditors even more now? I truly hope Mahindra buys all of Saab or at least a majority share of it. If NEVS buys only the bits it wants of Saab and becomes the sole owner, I unfortunately think it will spell a lingering death for the brand. However combined with a car manufacturer like Mahindra, I think NEVS would be good, if it bought a minority stake and I think there would be benefits all round for Mahindra, Saab and NEVS.

  7. I can fully understand that receivers accepted Youngman to revise their bid:

    1. They want the highest possible price from all SAAB related companies which were involved in bankcrupy (including SAAB parts).
    2. Youngman had already placed their bid so I think that’s why the receivers agreed YM could revise their bid. Shouldn’t they place a bid at all in the first hand, I presume the receivers would’ve not wanted another company to step in the bidding process.

    Let’s hope that we’ll hear good news in the near future!

    “Everything’s fair in love and war”, that’s what they say. And now we have to make a small addition: “everything’s fair in love, war and car company purchase” 😉

  8. Trainwreck is putting it mildly. Say what you like about Youngman, but the administrators have acted in a totally unprofessional manner by splitting the Company into 7 packages at such a late stage in the proceedings. Mahindra is still the best solution.

    • totally agree….this is turning into a right fiasco……taken far to long and to those out there that say,” be patient”, ”dont worry”, ”lets wait and see and dont be hasty”………..this is’nt going to be good

      • +1: this is not the way which is appreciated in business.
        This way of working will get back straight in their face.

    • The Receivers have failed. I knew they were in the process of failing a couple months ago—-their actions are utterly defenseless. They don’t seem to understand business. It’s unbelievable.

  9. I bought a 9-5 a year ago for my son and he absolutely loves it. I have had two Saabs and I am about to buy an ’09 9-3 Aero. While I hope Saan survives, regardless I will not regret my purchases because there is no car more fun to drive. Let’s hope they get it a deal worked out.

  10. This sucks! Boys stop bitchslapping each other, this is not the place to play schoolteacher . On topic: isn’t there a supervisor who controls the actions of the receivers, every person with any business experience knows that this works against them.(splitting in pieces) What now? Wait again aaargh

  11. Fantastic unveiling write-up Till!

    As for your consequences drawn, though, I tend to differ. To me it tells that once again the legal forces dealing with Saab completely ruined a promising situation for Saab. I start to feel Saab must be accursed.

    There have been several bidding sessions already and just after the final round, Receivers bowl over the laws of the game, head over heels? Just because they’re getting greedy? If someone, then it’s us who already learned it the hard way — thanks to GM — what a foul conduct this is…! Thus resulting in blasting Mahindra..!

  12. A parade of idiots, liars, and fools.
    (If you don’t understand, please don’t ask; you either really already know or you just don’t get it.)

    What about Saab Parts? What about not chopping up Saab?
    What about us? Stop playing games and Save Our Saabs finally, damnit!!!

  14. A the administrators have acted in a totally unprofessional manner by splitting the Company into 7 packages and what I know changing the conditions during the process.

    From the start the bid was for the whole company if I’m correct, but during the bids has the conditions change. Do the biddes know what they bid on as the administrators do not seem to know what they selling ?
    This isn’t M&M, YM or Nevs fault just the administrators to blame now.

    I had a wish for M&M but could accept YM and didn’t like the NEVS idea. It not feels serious/safe as NEVS not go for Saab Parts.
    But soon I say anyone just to end this by the administrators preformed “circus”.

    YM had a promice to re-employ all former employe (today 1500 aprox still without work I guess) how wants to return, and keep the brand SAAB. M&M I do not know but how about NEVS ? or is it just like I suspect a non SAAB development and research for electric vehicles with a maximum of 100 employees?

    Correct me if I’m wrong

  15. Why on Earth would they create 7 packets? This implies that they will NOT sell the entire thing, but in BITS!!! This flies in the face of everything we have been led to believe in the last year. AARGHHHH!!!
    This is verging on gross mismanagement and the receivers have made a HUGE blunder with this one. If SAAB ever actually gets sold it will not be because rational thought and common-sense had anything to do with it.

  16. Thanks for the insight ……..In this “Backside of Tactics”, I would not like to take it in the backside …… fingers crossed … Griffin Up

    PS: the receivers must have some unconditional offer letters with the money pledged … or not?

  17. Thanks for the post Till,

    Do we really know this to be fact (the 7 packages) or is it pure speculation?
    If it is fact then the administrators hav behaved in a very unprofessional manner.

    It´s one thing to play that game with small companies involved, but with M&M..?

    Hoping hoping hoping for Mahindra. Please come back.

      • OK,

        To me it all sounds lika an awful way of doing business. If this was in the admins minset from start they should have made this clear from the very beginning.

        If I was a potential byer I would definately feel like this has been poorly handled by the admins and my trust in them would be close to nothing.

        This is just sad.

  18. There may be all sorts of possibilities that we haven’t considered, because we don’t know all the facts. For example, NEVS may not want to produce any other than test vehicles for years. Whereas YM or M&M may be able to employ the production line very quickly. And so on. The Receivers may be trying to put together a deal where each party essentially gets what it wants, thus maximizing the price for the whole.

    As for YM not having the money, my guess (and that is all it is) is that ChiGov acting through the NDRC has decided that it wants this deal because it gives them access to advanced Western motor technology and is prepared to sponsor YM with whatever it will take. But that will not show up on the YM balance sheet until the deal is struck. But YM cannot win the bid until the Receivers have some comfort that YM is thus supported. They will need a credible guarantee from an international Chinese bank to allow YM to proceed and that may have held up proceedings.

    These are only some of the possibilities. We just don’t know, but I think that it would be wrong to be super critical at this juncture without all the facts.

  19. I have somewhat followed the discussions here from a distance, but feel that I have to make a few remarks in general…

    Bankruptcy is a process were an individual or a company no longer can pay its debts. It’s not a reconstruction or a situation were you “talk nicely” to the creditors to be able to continue operation. In a bankruptcy everything grinds to a halt and the court-appointed lawyers take over. The main reasons for the bankruptcy is a) it is not legal to continue run a company that obviously are just digging itself deeper into a hole of insolvency, and b) to ensure that creditors get treated in a fair and non-discriminatory way.

    The bankruptcy is decided by the local court and it is administrated by the lawyers appointed by the court. The bankruptcy process is *not* run by the Swedish government, no matter ho hard you dislike them for what the stand for and/or have said and done. In fact, I would guess that it is a serious crime for any politician to directly interfere in an ongoing legal process.

    The aim of the bankruptcy is to halt an obviously unhealthy economic situation that cannot sustain itself, and secure everything of value to make sure that the creditors get the maximum possible amount back. The aim is *not* to engage in local and/or regional politics, making sure an old brand name is revived, or making sure that the bankrupt company can continue operations with new owners. The aim is to get as much money possible back to the creditors.

    That said, my own guess is that the situation regarding Saab Automobile is a little more complex. But it is probably not due to what many of you wish it was. The company was sold to Spyker in 2010. Was Spyker a big player with big financial muscles and deep pockets? No. So why was it (after a 12 months soap-opera) sold to them? Because no big player were interested in putting in all the money needed to get Saab on its feet, developing and producing GM-free cars. That is the harsh reality. GM accepted Spyker’s shoe-string operation mainly because they figured it was no threat to them and when it failed the burden of a close-down or bankruptcy would be on someone else than GM.

    During Spyker, Saab was obviously shopped around hard because investments were badly needed. Some players showed interest, but again no one had the money (*or* saw the it as a profitable investment!) to start Saab from fresh and develop and produce GM-free cars. Thus bankruptcy. Now, after the bankruptcy (and the previous two reconstructions) Saab Automobile were as lean and starved as possible. And the price-tag of the company was lowered even more.

    My guess is that the maximum value for the company is as a whole, including some agreement regarding the brand name. After that, chopping it into pieces would be most preferable for the creditors. As to why the process is still going on after six month, my guess is this…

    Some companies have placed bid for the whole bankruptcy estate. But, since it was almost a shell at the time of bankruptcy (with no production for months) the combined price of buying it *and* restarting from scratch were very high. That price goes up every month, and thus the amount you want to pay upfront to get the estate gets lower every months. That is not benefitting the creditors. That it is still going on like this is probably due to that the amount they get by chopping it up and selling the pieces that can be sold is so low that the creditors rather continue to wait for money. Now, a buyer want to pay as little as possible. One way to do that would be to strike a deal with creditors (sub-contractors) that they accept a low selling price in exchange for guaranteed orders the next couple of years. I do not know it that is legal in a process like this, but if so it would be a complex deal. If that generates more money in the end, it could from the creditors point of view be more attractive than a big one time payment. There could also be ongoing talks with GM about licenses. GM has hardly anything to lose by letting someone build the 10 year old 9-3 for (say) another three year. The 9-5 is another matter, but a possibility is that a buyer can only build and sell that model in Europe. That would not compete with GM in the US and in China.

    There have been some angry comments about Saab Parts. I myself don’t see why that company has to be part of the sale. It is now operating rather independently from the bankruptcy estate. It is generating money, and it is a viable business. Mekonomen (a big Swedish independent retail chain in auto-parts) has shown interest in buying it. I don’t see a problem with Parts continue as a separate business with another owner than that of a future Saab Automobile.

    I understand that many people commenting here are upset with what is happening to the Saab brand, and that they get emotional about it. Please calm down. Childish remarks about the Swedish government is just pointless. They do not control the legal process. Also, Saab Automobile is just a company in a industrial sector that has a serious problem of over-capacity. I understand that many of you live in places where Saab is not a common car and that you know everyone in the region that drives a Saab. That is not the case in Sweden. Here Saab is a common car, and that probably reflects how we look at the whole process. Yes, it is sad what is going on but Saab Automobile cannot have a special treatment legally just because Saab-owners have an emotional tie to the old brand name.

    • Thanks for setting forth views from a different perspective. However I have a few remarks. While it is prohibited to directly intervene in a legal process by the government, no one said it is executed that way. But no, looking at the government or any political side, in any country of the world from a very suspicious perspective, is never ever childish let alone a pointless behaviour, or else you may be living in wonderland.

      The SweGov itself has a proven track record of handling the Saab case in a highly controversial way, with some really worrisome details on and off. So disregarding this fact here may exactly be pointless.

  20. From jond`s post “The Receivers may be trying to put together a deal where each party essentially gets what it wants, thus maximizing the price for the whole.”
    I think this is such a convoluted process that it will never happen

    • This could have been done, and done well, in three months—-with a new owner for the WHOLE Saab, creditors repaid in some way (no one will ever be happy about the amount, but it’s a bankruptcy) and the new company focusing on their new business plan. This should have been done in mid-April at the latest. What a farce.

  21. Check out TTela`s website – to whet your appetite this is the last paragraph – ” Mahindra, I have confidence in and Youngman has an arrangement around a restart based on the existing Saab technology. It feels a little less certain what we could contribute in terms of electric vehicle consortium, if it comes that they want to produce cars with electric power alone.”

  22. Is it any wonder that a well financed, professional corporation like Mahindra would walk away from this nonsense? Holy cow, train wreck is putting it mildly. It’s like a comic strip in the Sunday paper—-moronic.

  23. I read that a former Scania man , now audi, should integrate MAN and scania into the VAG group, bad for Saab that they can’t fit in Saab as well in their portfolio . They have enough money, and could be another nail in GM s coffin. Make a 95 on the passat platform , with the looks of the current 95. Just daydreaming .

  24. Am I missing something: I was under the impression from the word go, the initial package was the whole gamut, no cherry picking of various bits and pieces as that would have diluted the value to the preferred creditors. Did the receivers now realized they can get more money for the preferred creditors by untangling the bundle in the hope of raising more cash? Is this not anathema to the original package?

  25. My view is that the administrators and Swedish government have not properly considered the big picture here, maybe it is due to EU rules on state interference but it strikes me as very short sighted to break up the company and ultimately one I think Sweden as a country will come to regret.

    I do not know why but it seems there is more motivation to break SAAB up than to save it.

    Very, very sad.

  26. Unfortunately creating the best return for creditors and creating a viable future for Saab, might not be mutually attainable targets? Like most people here, I’d like to see a good future for Saab as the first priority, but the receivers most likely will have the opposite view.

  27. I mentioned this many times before that if the Administrators keep on dragging its feet and shifting goal posts, nobody will be interested to buy Saab as a whole and the end result will be that the entity will be sold in piecemeal to the scrapyard. The best example is the Indian buyer where everyone is saying that that is the only hope, and now what happened!?

    I found this whole saga a joke.

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