As I wrote in my Post one week ago the english version of the reorganisation plan was not published. So all of I wrote was mostly based on the Appendices 2 and 3. In the meanwhile I was able to read the reorganisation plan in English as posted by Tim and this are my thoughts about it. This is only my view, an engineer that has worked for the automotive industry for the last 16 years and loves Dilbert, the comic stripe, so you can imagine what I think about management.
This is the document sent too the creditors so they can judge if the reorganisation will take NEVS to a position where they can get their money.
I think the administrator is putting the reorganisation as the only way for the creditors to be full refunded.
The unsecured creditors are mot expected to receive full dividend from the distribution in the event of bankruptcy despite the high book value of the assets
I could believe that some of those creditors already know what a bankruptcy means for them as they already went through one in 2012.
There have been many talks lately about SAAB AB not granting NEVS the right to use the SAAB brand for their products anymore. This came completely unexpected, and we still have no idea if this decision is irrevocable or not, but if this is the case, why are the SAAB word symbols in Trollhättan? Yes, it is coupled with costs to remove them, but no car from that factory will be allowed to be branded as a SAAB car not now and not in the future, so why postpone that. And coming back to the plan, why would an attorney write this sentence in the plan
As stated in the letter, [RedJ:Is to think that this is the letter that has been attached to this document when it was sent to the creditors] one of the manufacturers is specially interested in incorporating the Saab car as a premium brand in its existing vehicle group, …..
knowing that NEVS will not be allowed to use the SAAB brand?
I want to focus on the point 5, reorganisation of the business. Thera are mainly two plans, stay as an OEM an build their own cars, maybe with the SAAB brand or give up the OEM status and develop and build cars for other manufacturers. Yes they also talk about the combination of both, but I think the feasibility of the combination of both will be further inspected when some kind of binding agreement exists on the OEM plan.
The OEM plan is long known, although no one has yet officially confirmed the names of those two Asian car manufacturers. One Automotive OEM kill buy up to 80% of NEVS and make a business plan where SAAB comes back to live as a premium brand, we have the examples of Jaguar and Volvo, and both have proven to be a feasible option, although SAAB in ist current position will need much more money and time to create new products, whiteout being able to create revenue with older products. So it will be very interesting to see the final business plan from that Asian manufacturer.
The other part of the plan is to create a JV with another Automotive OEM to share costs in the development of cars based on the Phoenix platform. This is also no new business approach and SAAB has some experience in that with the SAAB 9000 and its italian cousins. And to be honest I don’t think that Chinese OEMs will manage to build a global platform without help from an European or American OEM, at least for the next 10 years, bets accepted. So this is their possibility to make a product for the global market and by doing this being treated as a serious contender. The question is, does this Asian manufacturer see this opportunity this way?
But there is a small passage in the text, that I think I do not understand fully.
The Company has also entered into negotiations with other parties that have expressed interest in the production and facility resources in Trollhättan. These negotiations, which were initiated after the initiation of reorganisation, might result in sales of all shares in the Company or in an agreement on contract manufacturing and development projects.
From my point of view, one of the options seems to be, that somebody might buy the whole of NEVS from the current shareholders and use the production facilities to produce its own cars. I may understand it wrong, but it feels like they are also thinking of stepping off, which means the end of Saab cars, I hope not.
Restructuring to contract manufacturing.
This is the plan that destroys any last possibility to see a Saab branded car in the future. But maybe it is a not so bad option for Trollhättan and its car building knowledge.
During the SWAN era, a company with the name SAAB Engineering Services was founded. SES was meant to leverage the use of the engineering capacity in SAAB Automobile with external projects. PORSCHE has also the PORSCHE Engineering company, but the history of PORSCHE is quite different.
During those last SWAN months and during the bankruptcy period some external customers were interested in the engineering capacity in Trollhättan and most of all in their testing capabilities. It is not a secret that during the bankruptcy period some products from JLR (Jaguar LandRover) where tested in Trollhättan.
So using this experience and contacts NEVS have been thinking about expanding the engineering services to NEVS Industrial Services, adding all their experience in production and production planning as well as production capacity in a very flexible production plant.
Who would be the competitors to NIS? To all the companies that I know only one offers the full package, namely MAGNA. But as far as I know it has already to much to do in both engineering and production. Nedcars and Valmet, as an example, offer only production capacity, and Semcon or PEG, to name others, only offer Engineering services. If you add to the equation the fact that Asian OEMs may want to try production in Europe for Europe before building an own production facility, you could say that NIS has a future. Time will tell.
I’m still hoping that NEVS is able to ink contracts with those two Asian car manufacturers, so plan B ends up as an added income. If this was the case, the production line would be able to run at a higher capacity which is good for Trollhättan and at the same time create some extra income needed of develop those cars that we all love with some out of the box ideas.
If Plan B is the only income for NEVS, it will still be good news for Trollhättan, as cars will be produced in Trollhättan, but it will be bad news for a Saab fan base, as this will be the end to cars with a Saab brand.
I started this post one week ago, in the mean time the reorganisation plan has been accepted by the creditors and reorganisation has ben prolonged till the November 29th.
I don’t know the reason, but since October 8 many positive voices have been heard from NEVS, and the most important to me, Mattias Bergman has announced that he expects the contracts with the two Asian car companies will be inked before November 29, while his normal answer previous to that date was nobody could say when, but negotiations move forward.