SAAB should have filed for bankruptcy almost a year earlier

Meanwhile, in the “Swedes working in an official capacity won’t lift a finger without trying to make it look like they are part of a bigger conspiracy, thus inflating their own self-worth”-department:

TTELA yesterday brought word that the receivers are about to file their report with the courts saying that SAAB should have filed for bankruptcy much earlier.

The report consists of about 50 pages describing the reasons behind SAAB’s bankruptcy and the chronology of their demise.

“They refer to a report by the CPA company Grant Thornton and agrees with their conclusion that “the time of SAAB’s insolvency points back to the start of 2011 and at the latest the stop of production April 6th 2011″ which is a minimum of eight months prior to the bankruptcy.”

Muller has yet to read the report and won’t comment.

Having followed this debacle for some time now, I find it strange that the Swedes do not ask themselves “how come EIB, who had absolutely nothing to risk, were the ones that pulled the trigger on denying Antonov as an investor?”. That happened after April 6th, and EIB’s approval would have ensured continued production at a point where the company was about to start production of two new models (with an additional one in the pipeline for introduction next year).

Hopefully more details will be made available when the final document gets published tomorrow.

50 thoughts on “SAAB should have filed for bankruptcy almost a year earlier”

    • I would say it is not interesting at all. It will not change anything at all some criminal charges might erupt but now it is important to look forward. Victor and Spyker are gone new Saab is NEVS. Lets help out friends and buddies to keep their Saabs rolling and try to embrace new coming technologies. Saab drivers have always liked new and unchartered territory.

      • It’s massively interesting! You are right that it won’t change anything, but its always worth knowing how it went wrong, and why.

  1. It’s infuriating—-three bureaucrats who have probably never run a lemonade stand—-chiming in with their opinions of how to run a business. Maybe THEY should have acted sooner too, in naming a winning bidder for Saab.

  2. I think it all comes down to whether you thought Saab could make a comeback and be profitable with its new models or not. I count myself into the former group.

    • I agree. How could anyone known in December 2010 that Saab Automobile wouldn’t get in any circumstances more financing the next year?!
      It’s not like you declare bankruptcy after three bad quarters of business and most likely not too many bills overdue. It was in March 2011 when things started to fall apart and by that time the 9-5 SC was already launched in Geneva.
      Usually a company with the orderbooks swelling after ‘new product arriving soon’ is rather on the verge of a new beginning, not closing down.

      • Good points—and again, it points to incompetence/lack of understanding on the Receivers for not recognizing that. Or maybe they do understand it—–but are putting a spin on things to deflect attention from their own shortcomings.

      • You generally declare bankruptcy when you run out of cash, are illiquid, and can’t pay your bills. It’s got nothing to do with whether or not the order book is full or not.

        • Scand, I have to disagree. You file for bankruptcy if the order books are empty, you can’t get new credit, can’t sell the company, can’t restructure and/or the business plan has lost its foundation.

          • Conceptually, you declare bankruptcy when all hope is lost that the business can survive without reorganizing under bankruptcy protection. I think it varies depending on the situation—-but I would say that if the order books are empty, you work like hell to change that before giving up. That alone is not a reason to declare bankruptcy. The odds were stacked against Saab—–too many parties working against them. I don’t know why they have been cursed like this—-but for some reason, Saab hasn’t caught a break in decades. I think this continues to be the case. Awarding the name Saab and the factory, etc., to NEVS, to me, is not a blessing. It continues the curse—-and I will believe that until it’s proven otherwise. I’ve said it before—-this is something I really want to be wrong about. I don’t like being right when the outcome is something disturbing to me—-but I’m calling it like I see it. I’m just not seeing or hearing anything from NEVS that makes me a believer. All the great technology in the world means nothing if you don’t have the vision and communicative skills to generate excitement in the marketplace. This bunch is having a devil of a time getting their own brand enthusiasts excited—-and that’s the group that should be easiest to sign on. If their public outreach doesn’t improve by mid 2013, I have a sinking feeling this is going to fail before it even starts. They just don’t seem to have a clue about building a customer base—-and yes, that is something that occurs way before you have product to sell. It’s a component that successful businesses recognize the importance of from the beginning—-you develop your marketing and public relations as you develop your product. This is really basic, elementary “Business 101” nothing sophisticated at all. Why don’t they seem to get it even a little bit?

          • RS, all of your scenarios lead to what I am saying: you run out of cash. But you can also do that with a full or rising order book, if a) you are losing money on everything you make, or b) you run out of runway while trying to get your product to market.

            Cash flow management is everything. Especially in such a capital intensive business as car manufacturing.

            When Muller crowed about how he had bought the whole company for ‘the price of a wind tunnel’ , then to me, it indicated that he had no clue how in over his head he was getting.

            • Don’t you think the orders that came in after March 2011 would have generated exactly that; much needed cash flow.
              It wasn’t like they lost money on every car produced. Doing that there can’t be a break-even point which they most certainly had. Of course operating and net income were terrible in 2010 due to all kinds of reasons but it’s not something that they couldn’t have overcome with new products and a new lean approach (the so called ‘project cheetah’) had they gotten enough cheap(er) cash from somewhere.
              If the order books for the 9-3 Griffin, 9-4X and 9-5 SC on the other hand had been empty, I would have understood throwing in the towel.

              I agree with you that Spyker and the independent Saab management were way over their heads the first year but people tend to learn from their mistakes. They just never got a second chance which I think is unfortunate if we won’t see ICE powered Saabs again.

              PS. If cash flow would be the only measure of success NEVS by your definition should also fail as they’ve stated that Saab under their stewardship won’t make a profit until 2020.

  3. Again another smoke screen that is created.
    The only ones who become rich with these unrealistic stories are the lawyers.
    Unbelievable; let them all go back to their daily job and have that done as good as possible.
    If they had done that in 2009 and 2010 we had had perhaps the 9-5 Sport Combi on the road as well.

      • I am not saying the lawyers are to be blamed for the bankrupty itself; I am saying that now lawyers do search for every detail which they can find to drag this legal process on and on and on.
        SWAN has failed; now is is NEVS that will try to put the Saab cars again on the road.
        Let is be that way and have these discussions of how it could have been better done for the ones who always only look back.

  4. Objectively I kind of agree with the statement that Saab was doomed much earlier than the final bankruptcy. Saab was bleeding cash and had a portfolio that didn’t sell well. For us Saab lovers this is hard to accept but is unfortunately the reality. Now, that said, this doesn’t mean that Saab had to go under the way it did in 2011. From the beginning (when Victor bought Saab or even before that) roadblocks were put up by several parties. Imho the main culprit has always been the Swedish government which seems to have been pulling strings behind the curtain to make sure Saab would not survive in the shape that we would have liked Saab to survive. Where other governments see the value of their automotive industry and try to be supportive, the Swedish government seems to have been doing the exact opposite.

    • Gerrit, they weren’t bleeding that much cash from the car manufacturing itself -compared to a few premium EV manufacturers for example.
      What made things very difficult was some really dumb/expensive moves on the marketing side in 2010 but they were probably desperate and in a awful bind with the 9-5 sedan. Knowing what we know now one could easily argue they were doomed before the signatures had dried on the deal between GM and Spyker.

      • They _were_ bleeding cash since they had to pay their suppliers and their own workforce while hardly selling any cars.
        That the few premium EV makers survive a similar situation is because they have billionaires buffering the losses and are usually heavily supported by local and federal governments. Saab had neither because the Swedish government scared away the rich investors and was not even willing to give moral support let alone financial aid.
        I can understand that the wise Swedish leaders try to head for a environmentally renewable future but, as always imho, they should have done this by nurturing Saab in that direction. I wish NEVS all the best, but I think that what Sweden in the end will be left with is an assembly plant, all engineering and IP will be in China and Japan. Although this brings bread on the table in Trollhattan for a while, this will face the same problems in the future as other pure assembly plants in Europe.

        • “They _were_ bleeding cash since they had to pay their suppliers and their own workforce while hardly selling any cars.”

          The statement is inaccurate. Building cars did not generate a huge loss in itself in 2010. It was all that other stuff like totally ineffective advertising, unusually high interest on loans and money to Spyker that racked up to the losses and drained the cash reserves of Saab IMO.
          When suppliers started demanding advance payment or on delivery, things got out of hand very quickly and I believe they simply weren’t prepared for it. The sums that are tied up in building even 200 premium cars per day are enormous.
          I’m still surprised however they weren’t able to secure a credit facility to restart the factory but the track record from the first year was probably too much for the banks as the factory was already tied to the EIB loan -which couldn’t be used to finance daily operations… Catch 22.

          Anyone with better knowledge are free to correct my assumptions which are based on the figures from the quarterly and annual reports.

          • Hate it when I’m right but just read from a three day old TTELA article where the receivers say in their final report that GM was actually the first company/supplier to start demanding cash on delivery… Didn’t know that.
            How am I not surprised? What a nice way of pulling the rug from under SWAN/Saab who they knew was short on cash.
            JÅJ claim there were also huge difficulties with establishing the dealer network that operated under the GM umbrella.
            Anyone remember the American SAAB website debacle? Dear lord.

    • I don’t disagree with you—-though I don’t know much about the Swedish government or what their motives were/are. But I wonder—–if this is true—-I understand that they might not want to “save” the industry by saving Saab—–but does that equate to wanting to see them fail? In other words, not making loans and not gifting money doesn’t mean you don’t want to see someone succeed. It just means you don’t feel plowing money in is the answer. Is this a case of neglect that led to failure, or is it a case of the government actually not wanting to see Saab succeed and working against them? Two different things.

  5. Does any of this really matter to the individual SAAB owner at this time?
    I look forward to the arrival of the first NevSAAB. Now that matters.

    • I’m actually with Jasper on this one. If NEVS were reliant on Swedish government support for financing or loan guarantees as Spyker was, that would be one thing. They’re instead using the Chinese government(s) for their lifeline. And weirdly I’m not sure if I agree with Gerrit’s prediction yet that all Trollhättan will serve as is an assembly plant. I think NEVS is smart enough to realize the importance of Swedish identity and engineering on the Saab brand, and the Saab brand is an integral reason for their purchase of Saab. All indications are that battery design and development are being handled east, but that chassis work, design and engineering are still being handled in Sweden. I’m not uncomfortable in the least in that, since as far as I know there’s very little pioneering work coming out of Sweden in terms of battery design and development (correct me if I’m wrong) vs. China, Japan, other parts of Europe and the US.

      The Spyker era was always turbulent and the moments where I directly asked Victor questions I’m now looking at his answers with a whole new perspective. He really was threading a very thin needle, and it’s amazing they lasted as long as they did.

      • Jeff: I know people who have dealt with China (trying to set Western businesses up) since the 1980s. Are you familiar with how things are done there? How the government micromanages it all and how the rules can change in the middle of the game? Here is my question: How long do you suppose production of these cars will be handled in Sweden? Here is another question (with no factual answer possible here—-just wondering what your opinion is): Do you think discussions have already taken place planning when production of these cars will begin in China and end in Sweden? If the Chinese government is the lifeline (your words, not mine), I guarantee you that if this venture shows any promise at all—-China will want the factory and jobs….IN CHINA. That lifeline will be a leash—that is inevitable. “He who has the gold makes the rules. Keep digging.” Frankly, if NEVS really wants to go worldwide with Saabs—-and I’m hoping against hope that they do—–making cars in China will probably be the only way they can be competitive, don’t you think?

        • Making cars as close as possible to where they will be sold will always be the most sound strategy in the auto industry. Every automotive analyst says the same, which is why you see so many Europeans building cars in the US, and even why you see SAIC (Chinese) designing and building cars in England for sale in the UK. Really simple concept.

          • The exception might be if you can find extremely cheap labor that overcompensates for the distance between manufacturing and sales market—-then it makes more sense to export instead of moving a factory. So perhaps building cars in China and shipping them to the U.S. might be a good idea—-but it strikes me that building them in Sweden and exporting them to China—-makes almost no sense at all long term.

  6. There are 3 people in life you need to be wary off, fox style:
    – your internal receiver of revenue (tax man)
    – your lawyer or legal representative
    – your priest/deacon/pastor
    In all 3 instances, they play the ostrich mantra: head in the sand and saying: hear no evil, see no evil and utter no evil whilst knowing you are being screwed from all quarters except knowing who is behind it!

  7. First, this is not the official report on the bankruptcy, it will come tomorrow. In this leaked information the big question is:

    Why did Saab in march 2011, not having money to pay the suppliers invoices months ago, have millions of SEK sent to VM and GM?

    “But even though production stood still be there have been several payments to the CEO and principal owner, Victor Muller, as well as former owner General Motors and a few others. According to SVT’s report, these are 40 million SEK to Muller and GM.

    This is money the administrators would like to have returned to the bankruptcy estate.”

  8. Thinking as an American, A company the size of Saab, that was running out of cash would have filed for bankrupcy protection (Chapter 11) way back – probably before the first production stoppage, so that you could have had the freedom to continue to trade,( in this case, manufacture). Airlines do it all the time, and no one misses a beat on a day to day basis. I think Swedish ‘reconstruction’ is similar, but I am not sure.

    Once they stopped production, then the negative cashflow just skyrocketed, and doomed it.

  9. I’m glad they didn’t go bankrupt earlier because then I would’nt have had my super 9-5ng Aero.
    Anyway I look foreward what Nevs is going to do.

  10. Antonov was and is a crook. His money came from looting banks. And some of the money, where ever it came from, was used by Mueller to buy SAAB in first place. How would that have helped SAAB? Although it felt good at the time of the sale from GM, there was never enough funds for SAAB to survive.

    Hope NEVS can do better.

    • Yeah, well, the IRS was/is the crook that took billions upon billions from taxpayers and gifted it to General Motors and UAW buddies. I didn’t have a choice about paying taxes in full if I wanted to stay out of jail. Sort of like blackmail, wouldn’t you say? Me and tens of millions of others didn’t want our money confiscated to go to GM, but that’s what happened. I trust Antonov about the same as I trust the government here.

    • @bramfoto, If Antonov was a crook, I would have expected a conviction by now.

      Either way… An infusion of money back then would have saved thousands of jobs. To me it makes sense to keep a business going and worry about such (quite frankly: minor!) details later.

      I keep asking people: What would have been the downside? Every month the factory stayed alive meant another month of development of the Phoenix-platform. Completing that platform would have meant that SAAB would have few ties left to GM and it would have been much easier to find a new owner.

      Keep in mind that GM made it very, very clear, already back in 2009, that they did NOT want any Chinese ownership of Saab. VM said GM were ok with YM&Pang Da having a minority stake, but we all saw what happened when discussions of a 100% Chinese owned SAAB surfaced.

      18 months ago no ideal solution existed. Swegov apparently kept pushing for a Chinese owner. I guess they thought they could play a game of chicken with GM. Swegov clearly bet on the wrong horse in this game.

      • Geez, based on that, it sounds as though the Swedish government is staffed by people every bit as stupid and incompetent as my U.S. government is. Misery loves company.

  11. As exceedingly loyal and long time followers of the Saga over a period of years, we have a right to know what the heck happened actually.

    • If you can read Dutch; there is a good book which just got on the market in The Netherlands.
      It describes very good the whole story from 2009 till the bankrupty.
      Title: Saab over de kop.
      Authors; Maarten van der Plas & Robert van den Oever.
      ISBN: 978 90 468 1305 8

      Reads easily and is complete; the authors are however not the best friends of VM 🙂

      • It’s always open hunting season for entrepreneurs in The Netherlands. As soon as someone becomes successful there are suddenly a lot of people that feel they have cut this person down. This has something to do with the Dutch mentality that no one should stick out above the average.
        These two authors wrote another book about Spyker before, sounds like with the new book they are trying to drive the stake a bit further into Victor’s heart.

        • That’s becoming the case in the U.S. too, especially with the current administration. No exceptionalism, no standing out or above anyone else. What a shame. I’ve never felt envious or resentful of people who had more than me—-not even as a child. I applaud success. I think it’s wonderful when people do extremely well and I strive to try to get there too—-it’s never occurred to be to be jealous of what other people have—-or worry about the fact that they might be smarter or more successful than I am.

        • Gerrit – it is called the asparagus culture: you ain’t allowed to stick your head out and make money lest you get chopped off rapidly once you are perceived to have stepped out of line.

          It reminds me of the ME word “hell” – akin to helling potatoes, meaning digging them out once they are ripe – in the Dutch society, when you are ripe (read successful, ambitious and have the wherewithal to take risks) – you get “helled out.!”

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.