Saab’s court papers for reconstruction

I posted links to these back when it all happened, but things were moving so quickly then that you may have missed them.
The PDF version is available here.
The papers are primarily in Swedish, comprising the application background material and a set of financial statements from prior years. There is an English tranlsation of the application, though not of the financial statements.
I’ve taken screenshots of the English-language section of the papers, reproduced below.
Click to enlarge.

“I do not think the last chapter in the history of Saab has been written yet”

If I get to Sweden this year, I’m going to find Paul Akerlund, the head of the IF Metall union at Saab, and buy him a Coke (I don’t drink beer). A really big, icy cold Coke.
The headline is his comment on Saab’s extraordinary board meeting held yesterday in Trollhattan, as reported at Automotive News. Akerlund, as the head of the union at the plant, had a seat at that meeting.
I can’t recall a single time in the last 4 years of blogging when a comment from Akerlund has turned out to be incorrect. That gives me some reassurance in this instance.
AN state that the meeting did not reach a conclusion and that another meeting will be held Friday.

Saab’s management board will meet again Friday to discuss the troubled carmaker’s future amid reports that the company will soon file for protection from creditors.
Saab held an extraordinary board meeting on Thursday. The Swedish public service radio reported that the meeting was called to decide on a reorganization of the carmaker.
Reorganization is an alternative to an outright bankruptcy filing. The reorganization process includes negotiations with creditors on adjusting the terms of the debts owed by the company…..
….Saab spokesman Eric Geers said the company’s management is “extremely engaged” in finding a solution to Saab’s problems. “We have a great plan, the only thing that is stopping us is how we can get the right financing in place.”

Saab reorganisation ‘imminent’

News outlets in Sweden are reporting that Saab filing for formal reoganisation is ‘imminent’.
Saab have convened an extraordinary board meeting, due to start as I’m typing this, where the decision will be made.
From The Local:

The board of Swedish automaker Saab is expected to make a decision about whether or not to seek bankruptcy protection during a special meeting of the company’s board on Thursday…..
…..The news comes from anonymous sources within Saab, according to several Swedish media outlets.

The secret sources might be talking, but no-one else is:

…..Saab Automobile spokesperson Eric Geers declined to confirm the reports.
“We can’t comment on that,” he told the TT news agency.
Speaking to Sveriges Radio (SR), Saab chief executive also Jan-Aake Jonsson refused to confirm the information.
“I don’t want to speculate on the different alternatives that Saab has when it comes to running our operations going forward,” he told SR.

The news should be forthcoming shortly.
In other news, Aftonbladet have a story stating that the Swedish government offered to back loans to the European Investment Bank late in 2008, but the offer was knocked back by GM.
From a translation of the article:
General Motors had the chance to save Saab.
Aftonbladet can today reveal that Maud Olofsson had taken all the contacts and prepared the European Investment Bank for a fast deal in early December. But GM refused the offer.
– GM has absolutely not been interested in saving Saab, says a well-informed source.
Four years ago, General Motors chief Fritz Henderson said about Saab:
– This is an extremely important brand.
But Aftonbladet can reveal how GM ignored Saab Sweden – and the Swedish government.
In late autumn, the Maud Olofsson and her State Secretary Jöran Hägglund discussions with GM’s European chief Carl-Peter Forster. Maud Olofsson offered GM governmental loan guarantees if they turned to the European Investment Bank (EIB).
But GM chief interest was cool.
– It takes so long to get loans from the EIB, was his reply.
But Olofsson was not satisfied with that so in early December, she contacted the EIB and asked if thay could fast-acting GM’s potential application. The answer was positive.
But when contacted GM to talk about it there was a lot of excuses.
– There was no interest and they were delaying and slowing down the situation, “says a source to Aftonbladet.
Around christmas the Swedish government contacted external consultants to review the figures for GM and Saab of Sweden.
– They just jiggle the head. There was no reality in the figures, says a source.
Council from the consultants was crystal clear:
– Release the Saab.
The sources Reuters spoke to is critical to GM’s actions.
– GM has played a huge ugly games against the Swedish government, says a source.
– GM was not at all interested in saving Saab. And they have completely bypassing Saab Sweden.
Olofsson’s press secretary Frank Nilsson can confirm that in December they had worked hard to finish al preparations for GM with the EIB.
– We have been in contact with the Bank both to speed up any application by GM and that there is room to get loans, “says Nilsson.
Thanks Ken H and Johan!
Other tidbits from today:
Saab have released a report stating that if they go under, it is likely to cost the Swedish government in the order of 4.5Billion SEK per year.
Dagens Industri estimate that whilst Saab employ around 4,500 people, there are up to 30,000 that would affected by the loss of Saab.
Many of those jobs are associated with Saab suppliers. Many of these suppliers would possibly have to apply for corporate reorganisation themselves in order to survive Saab’s restructuring.

AMS cover the Swedish government’s response on Saab

Auto Motor and Sport have a very good summary of the press conference just held by Swedish Deputy PM, Maud Olofsson.
What follows is a translation, tidied up by me:
Industry Minister Maud Olofsson and the government have said “no” to aid that would help Saab and their owner, General Motors. Thus the future looks very bleak for Saab, which can hardly expect so much from the economically beleaguered GM. Olofsson’s statement may well be the beginning of the end for Saab as car manufacturers.
At 11.05, the Industry Minister Maud Olofsson, the press conference which aimed to comment on General Motors future plan, which came on Tuesday night. Olofsson’s statement was a repetition of what she has previously said – the state does not want to become owners of an automobile company.
“To begin with, I would say that I am deeply disappointed in the GM, who do not themselves dare tell the truth, that they have taken their hand from Saab,” said Maud Olofsson. “GM has not performed its role as owners, and are not doing it now. Instead, they want to put the responsibility on the Swedish taxpayers.
“It will be a process now until the end of March. We do not know what will happen until the U.S. government responds. There is also considerable uncertainty about what will happen with Saab.
“My previous position remains firm: the Swedish state is not prepared to take car plants. In this situation, GM is a stubborn negotiator, there are so many jobs that are jeopardized. But GM has also decommissioning, such as the dealer. In the moment we take over ownership, we also agree settlement costs. We are not prepared to jeopardize the taxpayers’ money.”
“The taxpayers have not requested to take car plants’ continued Maud Olofsson. “History teaches us about [trans not working] crisis, which the state invested 100 billion in today’s money and did not got anything.”
“We need to face the truth. It is very, very difficult to see how GM would be able to take ownership of Saab. We close the door for the Swedish government. It is not our strategy to own car plants. By 2010 Saab may require 8-10 SEK, which we will go in with 5 billion. This is not a realistic option. If GM cannot make Saab profitable, how are we to develop profitability?
“Saab have many good cars. The skills are we trying to make something of. We have proposals for research grants. What can lead to new industries? The sooner we do it, the better. Expertise available to develop into other areas, outside the automotive industry . Windfarms, for example. We see a growing interest in plug-in hybrids, electric cars, and the like. Let us see what can go to do there. ”
Asked if there is any realistic future for Saab was Maud Olofsson doubts:
“The realistic way is reconstruction. But it is not the Government. I can not answer if Saab continues to exist. We provide tools for good business ideas.
Maud Olofsson was also critical of General Motors’ ability to meet customer demands for more fuel efficient cars. She visited the Motor Show in Detroit two years ago and not much has happened.
“GM has a good deal to prove,” said Maud Olofsson. “It amazed not directly over the new idea that GM supplies (??? – SW). They do not understand the need for environmentally friendly cars. That’s why they go around the world with their hand out to various governments and ask for money.”

GM’s ‘recovery’ plan and how they’re going to sell Saab up the river

So now we know. The Plan is out there. You can download your own copy of it here.
The most important paragraph in the whole thing is the one I quoted in my coverage of the press conference:

Sweden/Saab–The Company has conducted a strategic review of its global Saab business and has offered it for sale. Given the urgency of stemming sizeable outflows associated with Saab operations, GM is requesting Swedish Government support prior to any sale. The Company has developed a specific proposal that would have the effect of capping GM’s financial support, with Saab’s operations effectively becoming an independent business entity effective January 1, 2010. While GM is hopeful that an agreement can be reached with the Swedish Government to support this direction, the Saab Automobile AB subsidiary could file for Reorganization as early as this month.

This probably fills in the gaps we’ve been seeing between GM’s opinion as to what’s been going on and the Swedish government’s opinion.
The government has been saying that GM is responsible for Saab and they want to see a plan that truly gives Saab a realistic chance of transition. As you can see from the paragraph above, GM’s plan is cut Saab loose by December 31st 2009 at the very latest.
……And If that’s not good enough for ya , Maud, they can file for reorganisation (bankruptcy) this month and become your problem right now.
Make no mistake – GM have strip mined Saab of their own technology (which Saab can licence back if they need to – thanks) and sold them down the river. Saab’s best hope now lies with convincing the Swedish government to throw them a paddle.
Saab have now applied to the European Investment Bank for a loan, which the Swedish government say they’ll guarantee as part of the package of loans they legislated earlier.
Maud Olofsson is holding a press conference tomorrow morning (Swedish time) where she’ll no doubt address the concerns for Saab as raised by GM’s plan.
This response will be pretty crucial.
The Swedish government have long held that they will not take an ownership stake in Saab but a reasonable chunk of their automotive industry is stake here, not to mention their export capability.
GM have cut and run. Good riddance to them, I say.
But the Swedes need to back their motoring industry and the company that has the design potential to be a proud Swedish player amongst it. This company is too good to euthanise.
Also rmember what Eric Geers had to say in my conversation with him earlier:
SU: So regardless of what GM say today, have you still got some room to move in terms of timing, etc?
EG: Yeah. The negotiations will continue. Exactly when they’ll end in terms of deadlines, etc, I can’t say. We just know that we need to plan an operation that can stand alone and then we will try to move on with things. We have to work on how to finance the operation, and that’s the road ahead for Saab.
It’s also important to remember that people need to back Saab up here. It’s OK for some to write a whole doomsday scenario, saying that it’s over-and-out for Saab, but if it’s over-and-out for Saab then it’s the same for a lot of people, and for an important part of Sweden’s industry and identity. It’s not just Saab, there will be a lot of people effected.
It needs to be sooner rather than later. Much sooner. But there’s still time.

D-day for GM – where it’s at for Saab

It’s the 17th in the northern hemisphere and that means it’s time for GM to hand in their homework assignment as set by their old schoolteacher, George W Bush. Of course, he’s retired since the assignment was handed out and there’s a new teech in town, but that doesn’t mean GM’s off the hook.
Here’s a quick look as to where all the various players are at right now:
General Motors
They’ll receive the next instalment of their funding today, another $4billion, regardless of how complete their assignment is. I’m surprised some in the autoblogosphere are getting all antsy about this as it was part of the original plan. GM won’t actually be graded on their assignment until March 31. If they pass, they get a lifeline and if they fail they get their loan called in.
There’s some talk that one of GM’s proposals will effectively be a structured bankruptcy with the US government providing financial backing whilst everything’s reorganised. This will effectively kill off the dealerships and union worries troubling them right now, but it’s a path their reluctant to walk down due to the bad blood it would cause in the community.
As is traditional with anything big like this, GM will most likely wait until the stock exchange closes before submitting their report. That’s 4pm in New York.
General Motors Europe
There have been renewed calls for Opel to be spun off from the mothership as a separate entity. Given that Opel make up the core of GM Europe, you can pretty much say that the whole entity wants a separation. Taking Opel out of the group would leave the cheaper Chevrolet brand, which is growing, but isn’t enough to house all the design staff etc that having Opel allows.
Those calls for separation throw worries about protectionism out the window, by the way, with the German unions being very up front about their desire to see the state take control of the company.
Other plans state that GM are looking to close at least three plants in Europe in order to cut costs. Make that four plants if they dump a certain little Swedish manufacturer.
Saab are busily but quietly going about their business, which takes three main forms right now:
1) Continuing talks with the Swedish government about support for loans that GM are yet to apply for from the European Investment Bank.
2) Work to finalise the upcoming vehicles that will form the basis for Saab’s future, and
3) Somewhere amongst all this they’re still building and selling cars.
TTELA report that Jan-Ake Jonsson has been busier than a one legged man in an ass-kicking contest (my description, not theirs), formulating the desired plans for Saabs future. They report that those plans have been presented and that the ball is in the government’s court……..but…….
The Swedish Government
……the Swedish government are reported as saying that they haven’t received a satisfactory plan from GM (i.e. Saab) and that the ball is in their court.
The Swedish government are playing the role of guarantor here. They don’t actually have to hand out the money that Saab needs. That will come from the European Investment Bank. They will, however, under the provisions they passed some time ago, be providing guarantees for the money that’s lent to Saab. They have standards they want met before they go ahead and provide those guarantees.
GM say they’ve done the plan and the decision rests with the government. The government say they haven’t seen a satisfactory plan and the work rests with GM.
The state of play, then, is seemingly a stalemate.
One thing that’s important to remember here, is that despite GM having to hand in a plan to the US government today, that doesn’t necessarily mean that it’s D-Day for Saab. That plan will state intentions but the execution (pardon the pun) of those plans is still some time away. It’ll take the US advisory panel until March 31st just to grade them and make a decision about them.
Regardless of what’s said about Saab in that paper, Saab still have time to negotiate with the Swedish government and find a way to satisfy their requirements in order to obtain those loan guarantees. The sooner, the better, but the important bit is that today isn’t The End.
It’ll still be a big day once the news is know, but the full effects will not be immediate.
Saab have a bit of time, and they have what we believe to be great models in the pipeline. They just need to make the Swedish government see that, which they’re working on at a fever pitch.

GM cuts continue, will the UAW still be “tone deaf”?

As reported by CNN/Fortune and the AP, General Motors has announced that over 10,000 salaried employees will be cut and the remaining salaried employees will take a 3% to 7% reduction in pay. The salaries of those in the executive ranks will be cut at least 10%. The expected effective date is May 1, 2009.
This will affect GM on a global level; previous cuts were felt only in the US. This announcement indicates that an additional 3,400 US employees are to be released, leaving the majority of the cuts to the global sales and manufacturing operations in Asia and Europe.
This round of reductions in staff and salaries, like others previously, are intended to qualify for government funding. Under the terms of the agreement, GM (and Chrysler) must show “positive net present value” or, in layman’s terms, positive cash flow that justifies the initial investment.
The UAW, ever the foil, has stated in the past that it will fight any attempt to reduce worker’s pay to the levels specified in the US government plan. At this moment, it is unclear what Rick Wagonner means when he says that “there’s good dialogue” with the union. However, what is clear is that the UAW is still clinging to the hope that they will get what they want without regard to the health of GM.
Mr. Gettlefinger, your conditional bluff has been called. You’ve said: “The union will do its part to help find savings as long as other stakeholders accept concessions.” I’d say that those “other stakeholders” are being forced to accept concessions. Big ones. If you are half as savvy as you think that you are, you will get out in front of this media wave and you’ll greet the world arm in arm with the GM management with a determination to get this program to recovery working.
I don’t think that’s going to happen. My guess is that the UAW leadership will reluctantly come to the podium, carp about the fact that they’ve been so put upon and then defeatedly say that they’ve given all they can give. Meanwhile, they will force Rick Wagonner to go back to Capitol Hill, hat in hand, to squirminlgy deliver the message that GM has not fully met the terms of the bailout loans.
I’ll say one thing that I like about President Obama: he is a gifted communicator. His choice of the term “tone deaf” to describe the automotive CEO luxury travel early in this process was brilliant. I will absolutely apply the same term to the short-arming, recalcitrant Ron Gettlefinger: he’s “tone deaf” about the state of his industry if he believes that these conditions are going to allow him to keep his “business as usual” paranoia about management and government and negotiate as if it’s 1999.

2010 Saab 9-5 is ‘on schedule’

A regular commenter at Trollhattan Saab posted what I think is a pretty important comment for Saab and for Saab enthusiasts:

GM announced to the US Saab dealers that the “new” 9-5 is back on schedule…..

Now, that could be anyone, of course, but through the magic of CMS software I can track this person’s comments over the life of this site and let’s just say that his contributions here give his comments some weight. Like this one, for example:

I have been an exclusive Saab dealer for 20 years next week….

The Detroit Auto Show starts this weekend and it’s not uncommon for a dealers briefing to take place prior to a major show like this one. I’d imagine that it’s this sort of occasion that’s just seen this confirmation of the Saab 9-5 take place.
We heard Steve Shannon say via Motor Trend, yesterday, that the Saab 9-5 would be around 1 year away on American shores. That, and this announcement to dealers today, would tend to confirm the whispers going around that the Saab 9-5 will be shown later this year and commence production shortly thereafter.


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