Supplier files for NEVS bankruptcy hearing (updated)

P4 Väst reports that NEVS owes one of the suppliers 150000 SEK (~ $21800 USD). A bankruptcy hearing is scheduled for September 8th.

Monday 11th was the first day after the vacation for many of NEVS’ employees. There were rumors that an announcement of a deal would be made known yesterday, but nothing has materialized so far. It would surprise me greatly if this situation has not been resolved, one way or another, long before September 8th.

Fingers crossed.

(h/t to Daniel B in comments)

Update (18:00): Swedish television reports that the CEO of Labo test was unaware of the legal motion. It was the company handling their invoices that filed on their behalf. “We will now consider our options and one alternative might be that we withdraw our request”.

(h/t to mk for the link to the followup story)

77 thoughts on “Supplier files for NEVS bankruptcy hearing (updated)”

    • No. It is either the prelude to the next chapter in the history of Saab, or it is part of a death spiral.

      I’ll give it even odds. (I just don’t know either way)

    • A supplier filing for bankruptcy is a valid legal tool to protect assets, I think that’s the way to see it. It, among other things, forces an answer to the question if there are enough assets left, if the request is not withdrawn.

      Basically, it places more pressure on Mahindra to complete a deal soon so that the suppliers can be paid before the hearing. In practice, we now have a deadline for a deal.

      • You know, thats exactly what a lot of people said about Victors efforts in 2011… they said the end was in 2009… funny how that keeps repeating it self but with one significant difference, the date…

        • To Muller’s credit he did extend Saab’s life ever so slightly, allowing a handful of 9-5NGs to be built before it all went south, for a while there I thought Spyker was in control.

          However, Muller was also the one who painted Saab into a corner from which it couldn’t escape, and the very same day it was made public that he wanted to sell out to the Chinese (the epitome of desperation) I realized that it was over. Nothing that’s happened since then has suggested that I was wrong, and I’m convinced the future will prove me right, but it’s everyone’s privilege to wait and see, I suppose.

          • By stating that it was Muller who “who painted Saab into a corner from which it couldn’t escape” tells exactly how little you actually know about what was going on…

            The whole saga began way before Victor Muller even got to the stage. The downfall of Saab came with the stupid people in charge when the NG9-3 was developed back in 2001-2002. From that point onward its been heading down hill ever since… Victor did an amazing job in trying to save Saab, I know, I was there and I talked to him almost everyday, I still do!

            NEVS has also done an amazing job in trying to rebuild what was lost, that they got the factory up and running again in just 14 months is close to amazing! Never before in history has that ever happened before! They’ve managed to develop 4 prototype electric cars in that time as well, plus do a lot of work on completing the phoenix platform…

            You’re bad comments about them is something that they dont deserve! Remember that 99% of NEVS are guys who used to work for SAAB Automobile AB!

            • In 2009, Holden was the GM brand outside of US that seemed to have the brightest future. Now, Saab is much more likely to survive than Holden (as more than a badge). Because Victor Muller and Kai Johan Jiang has given Saab enough freedom and resources to have a shot at a bright future.

            • The seeds of Saab’s downfall were obviously sown during the GM era, but Muller didn’t exactly reverse the situation by clinging to the unsuitable investors that he pulled out of his hat, till the very end. It was no secret that GM didn’t want Saab to end up in the hands of the Chinese, and yet Muller stubbornly pursued Chinese investors! There obviously could not be a happy ending, and we all know what happened later.

              • Wrong. Victor and his team pursued investors on all continents (well, probably not Africa or Antarctica, but I will assume that is not places where you would have sought investors either?).

                As you may recall, there was (and still is to some degree) a world-wide financial crisis. Most investors put their money in safer investments and banks were unwilling to lend anyone money. If you had read “Kampen om Saab” (Jonas Fröberg) you would have noticed that an entire chapter was dedicated to the problems with securing the EIB loan (a vital and unfortunate part of the Koenigsegg plan). They needed to calculate the market interest rate, but no bank were in a position to lend anyone so much money. There was no market rate.

                5 years earlier and your statement would have made sense. Back then the financial markets were operating at full steam. It would have made no sense to go after the Chinese. But 5 years earlier GM was also operating at full steam and Saab was yet to be abandoned.

                • You keep saying that Muller pursued non-Chinese investors, which may be true for all I know, but it doesn’t change the fact that he still did pursue Chinese investors, despite the fact that pretty much everyone knew from the get-go that GM specifically wouldn’t allow it, yet as far as I remember Youngman was involved right until the bitter end!

                  Or have I got it wrong? If that’s the case, feel free to refresh my memory – at what time did Muller abandon Youngman and brought in a non-Chinese investor, and what was the name of said investor?

                  • He went after investors in China because he had nowhere else to turn… and GM accepted both Youngman and Pang Da’s investments initially, it was when they together tried to take over more than 50% of the company that GM turned them down.

                    The initial deal had them owning 24,9% of the shares in SWAN together, but the chinese got greedy because of a Swedish lawyer who promised them more than they would ever get and everything went downhill after that…

                    • Right – Muller may have found out the hard way that “there are no alternatives left except the Chinese” in reality means “there are no alternatives left”. I’m sure any pundit could have told him that for free…

            • Hi Tim. Can you explain further what you mean by “The downfall of Saab came with the stupid people in charge when the NG9-3 was developed back in 2001-2002. From that point onward its been heading down hill ever since”. I’d be interested in understanding some more about this.

              • Well basically GM had developed the NG900 for Saab together with Saabs engineers, the pure mission for that car was to bring an affordable car to the customers that could turn Saabs negative economic trend. And the car did exactly that, it had a rough start but it got the job done and it was the first car to make profit for Saab in ages. Saab also worked on the 9-5 at the time tightly together with GM engineers and it was a very good project, it stayed within the financial borders which it should, it was a massiv car that was not expected to break even but it was to be the upper line for Saab.

                GM also asked Saab how much money they would need for the NG900 replacement which was to become the NG9-3 launched in 2001. Saab was given the funds requested and GM also invested a huge amount of money into the factory, building among other things a brand new high capacity paint-factory and a brand new production line. A lot of money was spent on effective ways of working in the factory and during 2000-2002 a large number of consultants from Toyota came to teach the guys in Trollhättan how to build cars efficiently.

                The NG9-3 lineup was supposed to be a step up from the NG 900 series, and Saab was given the development funds and support to build the whole line up of SS, SC, CV, X and Coupe versions. What actually happened was a thing that had happened so many times before. Saab had to re-invent the wheel. So rather than taking existing technology which was tested and worked fine from the GM stock, they decided to invent their own Saab tech. Basically this made the development project almost 2 years overtime and way over budget. The engineers at Saab created a unique electrical system that was so complex that it was almost impossible to improve upon overtime, they new expensive technology such as fiber-optics in the car.

                So in the end the crushed the budget so badly that they could only afford the SS and CV models and GM refused to give additional funds for the other variants. Basically the GM management lost all faith in Saab. This ended with GM executives basically replacing the Swedish ones and it took many years until Jan Åke Jonsson and Peter Forrester were able to convince GM to once again put Saab back in focus.

                In the end the 9-3 became about 3000 Euro more expensive per car than planned and in 2007 got the GM electrical system which it was supposed to have from the start since the old system had too many problems which could not be resolved. The NG9-3 project never went break even. The car that was supposed to be an affordable people car which would fund future projects failed to do so due to poor decision making from Swedish managers at Saab.

                I’ve gotten this story confirmed from several sources at the top of GM and Saab plus several engineers. This is the main reason why former CEO of Saab Peter Augustsson was removed from management at Saab.

                Between 2002-2006, GM didn’t really know what to do with Saab and it became a stepping stone for GM managers who wanted to climb the ladder. What GM should have done is to take firm control of the company when it messed up, but GM failed to do so…

                What killed Saab? Poor management being able to focus on whats important about the auto-industry, to make a profit in order to keep going!

                • Thank you for that Tim. It makes perfect sense. Plenty of blame to go round. I tend to focus on driving and safety—-and things like expensive fiber optics might or might not be a means to that end. But I also focus on economy and reliability—-and clearly, Saab was on the wrong path there, making a car cost thousands more than it should have. I’ve said it before—-the prices killed Saab in the U.S. A couple thousand dollars does make a difference in whether a car will sell here or not—-and giving us the same basic car without the frills (or at least an option to buy that way) would have gone a long way toward helping sell more cars. There’s no good reason, in my mind, to reinvent an electrical system into being an expensive albatross. These are the types of things that made people second guess Saab—-reputation for being in the shop too often, expensive parts and service. That’s a killer.

                • Thank you for telling it like it is.
                  I think another thing that crippled Saab was the amount of development that went into one or even two 9-5’s that never went into production. One was developed together with Fiat and died when GM cut the ties to Fiat. Much money down the drain.

                • I have heard or read about similar things, like the Saab engineers deciding to design a new fuel tank for the Saab 9-3 even though the standard GM tank would have been perfectly suitable.

                  Sometimes when I discuss things like this with Swedish Saab enthusiasts they stubbornly refuse to admit any wrong doing at all from the Swedish management or technical directors. They blame everything on GM. That is why it’s so refreshing to read your honest and unbiased view on this. I know you are the greatest Saab enthusiast but still you have the ability to see things clear and are not afraid to say it.

                  I mean, GM didn’t become a bad owner just because they wanted to be a bad owner. They really tried hard with Saab, and invested huge amounts of money into the Trollhättan facility. But when the management in Trollhättan failed to keep the costs under control with plain stupid technical decisions, it’s no wonder the GM management sooner or later would loose their patience.

                  As for Victor Muller, I’ll give him credit for at least doing something (or actually a lot of things) to save Saab but I don’t think he was very good at cost control either. In my opinion, one of his biggest mistakes was to not reduce the workforce more, already in 2010. I don’t know much details about the Saab production and how much staff they needed on the assembly line but it’s a fact that already in autumn 2010 it was obvoius the sales figures were way below what the factory and the number of employees at that time could produce.

                  I think if they had sent out termination notices already in November/December 2010 they wouldn’t have run into the same financial problems in June/July 2011 when they had to pay full salary and taxes for 2000-3000 employees that were just sitting at home with nothing to do. I know the engineers were still working, but not the people on the assembly line.

                  For sure, it would have been a very unpopular decision to fire part of the workforce already in 2010 but that’s what all normal companies do in moments of financial problems. Especially in Sweden with our protection laws for the workers, it’s very important to hand out termination notices in a very early stage before you start negotiating with the union. In the best case, if the financial problems are solved, you can withdraw the termination notices. In the worst case, you might be able to save the company with a reduced working force.

                  I really thought it was a huge waste of resources to have the full workforce standing still without doing anything about it, while the money was bleeding out of the company in the summer and autumn of 2011.

                  • Svensson: You and Tim both deserve credit for excellent posts. As I read yours—-it occurred to me that part of the reason GM might have been able to get control of Saab in the first place is because development costs were stubbornly out of control, leading to a company in financial dire straits. Bad habits die hard. I agree that GM made a good faith effort at the beginning—I take strong exception to how things ended for Saab and how GM obstructed plans to keep Saab viable—selling cars. But the other point is that as an owner, GM needed to recognize the issues at Saab sooner—-the fact that electrical systems/wiring harnesses, fuel tanks, etc., were being re-engineered at great cost without a good reason—-that off the shelf parts would serve the same purpose and an upgrade wouldn’t even be evident to buyers. That foolishness had to be stopped extremely early, with a new corporate culture forced in if it was really that bad.

        • Vic built cars and sold them through actual Saab dealers—-in the same markets GM sold in. Vic built two new models as well as the 9-3. I never considered Saab dead after GM sold to Vic. Vic built some of the nicest looking Saabs ever. But I think beyond Vic, it’s very easy and legitimate to say that Saab has been dead, we just didn’t know it. At the very best, they’ve been on life support for a couple years—-and maybe someone else can revive the body. I hope so. If not, the body on life support becomes a corpse and the only return at that point will be Saab as a zombie.

          • The cars that Vic built were developed by GM, all the work was done when Vic entered the stage, all he had to do was to push them to the market… well thats almost all he had to do… plus convince all the suppliers to start working for them again etc etc etc

            • I’m sure that’s all true—-but my point is that Saab was alive under Vic. Maybe it died in 2011 with Vic at the helm—-but there haven’t been real signs of life since the Vic era.

            • You mention everything NEVS was doing—-that wasn’t visible to the public and it wasn’t shared by NEVS with the motoring public/car scribe-automotive press. So for the general public, there were very few signs of life.

      • Some people claim that Saab died when they started usin four-stroke engines in the sixties and som claim that Saab died as recently as yesterday. They are all wrong. 🙂

  1. Another month ? Please, stop it now.
    Shouldn’t we have a more definitive answer by the end of today/tomorrow morning.
    If they have paid their taxes or not ?

  2. £13,000 Sterling? A smaller creditor wants to stir the pot, maybe they have been put up to it by a larger creditor, maybe we have the makings of another conspiracy theory?

      • Agreed but it still seems a risky way of going about it, still NEVS would seem to be Asset rich but cash poor so at least there is plenty for the Liquidator’s to get their teeth into, but then they will swallow most of it to fatten their profits.

  3. TTela reports that many of the employees have been released of their duties for now, as there is little to do. Nobody gets the boot, everybody gets their salaries, they just take a leave until further notice. Like back in 2011.

  4. I think this also has the effect of that all activities of the enforcement agency will be stayed, so it may actually be a good thing if a deal happens in short order.

  5. It is becoming more apparent that the real possibility is,, that this may be it… One of two things, there is no deal or a potential buyer is waiting for the vouchers to feed on Nevs so they can come in a buy the saab brand and or whatever assets have value for pennies on the dollar,,,

    All the suppliers who are owed monies would be offered x… A take it or leave it situation… Another words the suppliers either agree or go via Bankruptcy path.

    This could very well go on for months.. If no deal really is the making death will be imminent.

      • well i doubt Manhindra will license as i have send plenty of times… Can’t build a company around a brand you don’t own… that simple hasn’t worked as of today.

        • Don’t know if you really have to “own” the brand. Perhaps the terms of the license is what matters. Did GM own the brand? I doubt it……if so, it would have been part of the bankruptcy estate and NEVS would now own it.

  6. A very sad day again! No conspiracy theories here please! As Tim mentioned, smaller suppliers cannot afford to sit and wait. Again a very good reaction from one of the last SAAB friends Jonas Froberg at SVD web page, a quickly written,but very good article. If he is right, then the dream is over for good!

  7. As this drags on, please be cognizant that one of the last (if not only) real assets that SAAB has from a marketing perspective; it’s brand name, is being diminished daily and being associated with abject failure.
    The consequence being any potential buyer sees less and less value in buying the rotting skeleton of SAAB, and more value in the production equipment and development their own virginal brand.

    I cant believe there are still people absurdly standing by with “fingers-crossed”. Oh how I despise that term!

    • It is very easy to shoot down ideas and see all the potential pitfalls of any business preposition. I could do that in my sleep — all day long.

      I believe successful people are also good at seeing potential and opportunities. Whoever tries to create jobs through innovation — I wish them all well and I hope to become one of them one day.

    • Joe the name Saab has already taken a hit global… Thousand upon thousand of owners got crushed well as dealers…. The biggest problem is another shut down,,, Convincing anyone, buyers or building a dealer network will be tough… The last thing people want to do is spend millions or thousands and get torched… The flame was severe since 2009.

  8. Having just returned home from the North American Saab Owners Convention in Redmond, Oregon USA …. I need to report that there is a LOT of optimism here in the US that the Saab brand will survive and that we will someday even have new Saabs available in our country once again. Our very upbeat convention was helped immensely by the presence of Mr. Saab himself, Erik Carlsson, as well as the fine Curator of the Saab Museum, Peter Bäckström. What a great event!!!

    • That’s no more an “MG” than the last pair of underwear manufactured in China that I purchased.
      Oh, but I almost forgot…everyone has “fingers-crossed”…that should make it all better!

      • Weather if saab makes it or not I give them the thumbs up they only brand that tried to stay alive after the gm affect I still own 4 of them an will keep them as long as I can 1974 sonic 1990 900 1999 95 and 2001 95 but really hope they make it I have worked on saab at a dealer for over 25 years and we are still a certified service dealer in north America Marietta Georgia

  9. Shouldn’t we expect a bankruptcy? Wouldn’t a potential bidder want to get the company at rock bottom $ (i.e., after bankruptcy is declared) verses negotiating with NEVS to avoid bankruptcy?? As I see it – the best case scenario is a repeat of 2012 – albeit with little interest during this go-around – hopefully resulting with a sale for significantly less than what was paid by NEVS.

    • Doesn’t it get far more complicated though, if it goes that route? If you can keep it as a business transaction—a purchase/buy-out—-I guess it still needs approvals of some sort, but far less drama than a bankruptcy, creditors suing, government appointees back on the take, etc. I think it’s fine to let NEVS twist in the wind for a while to beat the price down to the lowest possible amount they can take—-but letting it go past that point risks not getting the company at all.

      • Well maybe no one is that excited.. take it or leave it… Time isn’t an issue since it will take years regardless to have cars Will be approaching 4 years soon. More than likely its already complicated… with said name, licensing etc.

        Who is to say anything is happening… Not one leak,, that is almost impossible.

        • You’re forgetting the one skill NEVS had—-lips tighter than Richard Starkey’s drum kit. They might not have been good at rebuilding a car company, but they were masters at hiding whatever it was they were doing.

      • Angelo, That likely scenario provides ample time for the vultures, charlatans, and other vermin that we’ve seen before, pick what’s left of the decaying morsels of flesh from the bones of what once was SAAB.

        • Maybe I’ll bid on a box of those black emblems with “SAAB” in silver—-the new logo. NEVS might have ordered a gross of them, maybe more—-and only used a few dozen. I’ll offer three dollars each, free shipping to the U.S.

    • Your idea makes some sense but in practice, no one knows where a bankruptcy will go. It’s not so simple that NEVS goes bankrupt, the bankruptcy trustees sell at the best price they can get and that’s it. First of all, a bankruptcy requires maximizing the funds available to pay creditors who are likely to end up screwed in any case. The trustees could well sell off a company on pieces if that made financial sense; the land, the equipment, etc. And since NEVS has already taken loans agains some of their assets, those would go straight out the door to those who they’ve been pledged. Result……no Saab.

      • Thanks for that insight. Given what you posted above, shouldn’t their be far fewer “vultures” this time around since only a few dozen 9-3’s were produced from left-over parts with only a few new interior bits (like the seats and center console units)?

        • That reminds me, I might bid on a couple of those new headrests too. I seemed to be the only one who liked those. Ten dollars each, free shipping. Maybe I can retrofit them into a ’97 Mercury Tracer that’s in our family.

  10. One of the issues us ‘fans’ have faced for some time now is the real lack of any media on anything Saab. And now we seem to know less than next to nothing. That’s fine and i respect the logic around it, and I certainly don’t begrudge NEVS for this approach however now would be a good time to say Something, be it good or bad.

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