CvK and Eker speak about Saab

Norwegian newspaper Aftonposten has published an interview piece featuring Bard Eker and Christian von Koenigsegg.
Arild has been kind enough to provide us with a translation of the article. It’s a great read, giving an insight into what’s at stake fo the Koenigsegg Group, how they might get things done, and what Eker might do with Saab in the future.
My thanks to Arild for this translation – this is a pretty long piece and must have taken quite some effort.
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KOENIGSEGG BUYS SAAB: 2.5 billion away from Saab-victory
Christian von Koenigsegg doesn’t get the cars in the Saab museum for free. Yesterday he asked the Swedish government for loans for the large purchase.
Christian von Koenigsegg is the man behind one of the world’s coolest sports cars. Now he can succeed with one of the most spectacular takeovers of the credit crunch.
– Personally I am risking a lot. My time, which I otherwise spend one hundred percent on the sports car factory, a large part of my personal wealth and my name, not least. I take a big risk. But we believe we’ll be successful, or rather, I am convinced that we will be successful.
Koenigsegg smiles gently, perhaps a little self-secure, as he walks around in his new kingdom. Lined up around him are the cars in the Saab Museum. Sonetts from the sixties and far more modern 9-3 models competes to shine the most, making the museum visitors wonder if Saab still has a great future ahead – or if the greatness is somewhere in the rearview mirror.
While an entire automobile world is in doubt, Koenigsegg gambles wealth and his noble name on Saab’s future. Since early summer, he has been in intense negotiations. Monday he signed one of the most spectacular acquisitions in Sweden ever. On the team he has Norwegian Bard Eker and the telecom entrepreneur behind Russian VimpelCom, Augie K. Fabela.
They have put more than NOK 600 million on the table. Seller General Motors (GM) provides around 2.5 billion in dowry to get rid of the loss ridden company. Now two tough rounds remain: First, to secure a loan from the European Investment Bank on about 3.7 billion, and the hardest: to obtain an additional 2.5 billion.
On top of this, the friends’ goal is to earn money where GM has only made losses. Do they have the money to give the company a second chance?
– We are convinced we do. General Motors is convinced. And the Swedish government is positive to provide the guarantees needed, says Koenigsegg to Aftenposten.
To obtain the critical 2.5 billion, Koenigsegg is open for additional shareholders, venture capital companies, friends and acquaintances.
-Of course, both Bard and I, and above all Augie, have a lot of acquaintances that can consider getting involved if necessary. I say that nothing is impossible. We are in dialogue with all potential financiers to get these last 30 percent. We predict that this will be a loan, but it can also be risk capital within the Koenigsegg Group.
– The government has decided that the Swedish people are not going to pay?
– We agree with them. If we get the guarantee, it will be fully secured with the assets from Saab. They take very little risk and it will be a guarantee we pay for. There is no talk of any contribution in any form or that the Swedish people must pay.
-But how do you plan to make money?
-Often one hears that the automotive industry is so over-established that there is no use to try. This shows low self-confidence. Because there is more offer than demand, one should therefore not be able to sell cars. It’s about making cars people want, and then there are some others who will suffer from too few customers, not Saab.
Pinchcliffe
The car builder Koenigsegg was born at the age of five, when he saw the movie Pinchcliffe Grand Prix in the cinema. Now he wants to build thousands each years.
– We shall not build millions of cars. We will start by reaching a positive result with 100,000 cars, and then climb up from there. What will happen is that some large and some small producers will disappear – and suddenly the market is no longer over-established. The pressure from Asia will start, and then it’s business as usual.
Willpower
To succeed, he relies on Eker’s capabilities to design and produce efficiently. The Swede is deeply impressed by the Norwegian he met only four or five years ago.
– He shows a great entrepreneurship. You have to think pretty big to make such a trade. Neither he or I are slow movers.
Eker says no to retro-cars
Bard Eker promises more environmental friendly cars, and hopes that his background gets more Norwegians to buy Saab.
The industrial designer is careful to define his role in Saab’s new ownership, and says he is humble and wants to see where he best fits in. But what he already can determine, is that the Saabs of the future will have a lot of new technology.
– The timing is perfect for it now. The financial crisis means that the world demands more environmental friendly technology, and we will exploit, he said.
When it comes to the design of the new Saab, he says that they will create new products and not make retro models.
– How long will it take before the first Saab with the new design will be launched?
– It’s a bit early to say for certain, but it often takes two to three years to create a completely new car.
Eker says that they have no plans to let any employees go, but neither does he dare to promise that all employees will keep their jobs.
-But we dream about expansion and further development, not reduction and downsizing.
He will keep his own design company, even though he is unsure what to do with it further.
– Now I look at Saab as a project, and so then time will tell, says Eker.

Christian von Koenigsegg on the Koenigsegg-Saab deal

Earlier this evening, Saab uploaded three videos to one of its news distribution companies. There was one video each of Jan-Ake Jonsson and Christian von Koenigsegg, and there was one edit featuring the both of them (as shown earlier via GM Europe TV).
An hour after it first appeared, the CvK video was removed from the site. I did get to watch it once, but I can’t recall if it had any more content than what was edited for the video combined with JAJ.
Perhaps it will be reinstated some time in the near future.
Until then, the following is a text transcript of Christian von Koenigsegg’s comments in the combined video as featured on GM Europe TV.
——
CvKvideo.jpg Man with extremely smooth voice: This deal with Saab and General Motors is now going ahead. Why has it taken so long?
Christian von Koenigsegg: Actually, from our perspective we think we’ve moved quite fast. It was only about 8 or 9 weeks ago [that] we started getting into the process of looking at all the details of Saab. Now we have reached so far [to the point of signing] a SPA, a share purchase agreement, of which we’re very proud and happy to have reached this point.
We have great plans for the future of Saab and we’ll do our utmost to build an exciting, strong company and of course that’s good for the Saab employees as well.
MWESV: When people hear the name Koenigsegg they think of an extremely small manufacturer of high performance supercars and it’s a bit of a puzzle to understand how such a small company can take on Saab. How are you going to organise it?
CvK: We get that question a lot…..It’s actually not Koenigsegg, the supercar manufacturer who is buying Saab. It’s a company called Koenigsegg Group, where I personally, and the supercar manufacturer is a part of. But we consist of a group of entrepreneurs – Swedish, Norwegian, American – of course it’s a Swedish company but it’s an international base behind it. Within that group we have the strength and energy, and know-how and will to get this job done.
MWESV: Saab is a company that evokes a great deal of passion around the world. There’s a great deal of expectation hanging on your shoulders. What actually attracts you and your fellow investors to Saab?
CvK: It’s a very unique brand and it’s got a great heritage….. Sweden has the greatest number of innovations, per capita, in the world, and that has been seen through Saab’s history. You can see that with their products. We want to reinvigorate that, make it unique, Swedish, innovative, environmentally friendly and of course, fun to drive.
MWESV: So the deal is struck, but you know, of course, that the key for any car company is product – new product. So what new cars are we going to see from ‘new Saab’?
CvK: Well the first one coming out is already in the pipeline – it’s the new 9-5 – which I’ve personally driven and tested over the summer and I think it’s a great car. It’s very important for Saab’s future. Then we have the 9-3x which has just been launched, which is also a good compliment ….then we have a few other cars coming out in the near future which are in the pipeline, so to speak, I can’t get into too many details right now, but, we have a lot of new products coming.
MWESV: And there is the money on the table to make it all happen? A lot of people have been wondering about that, too.
CvK: Absolutely. money is an important factor and we’ve been working together with the Swedish government, GM and within our group to secure finance for Saab, and we’re well on our way, and it’s close enough for us to sign the SPA and [now] we have the next important step in front of us during the next months to get the whole deal done.
It is a huge challenge but it’s a rewarding challenge and we’re very confident that we’ll make this work.

Koenigsegg visit Saab

No wonder they’ve got no time for interviews….
TTELA report that Christian Von Koenigsegg and Bard Eker are/were on site at Saab in Trollhattan today.
3005410671.jpg
They’re theorising that one of the other guys in black suits (CvK is the one who’s not so hirsute) is Augie Fabela, the Chairman of the Koenigsegg Group board. I’m not so sure about that. They look a little young to me.
TTELA were not able to get an interview. It seems the line is that GM and K-Segg are still in negotiations and whilst that’s the case, they won’t be talking.
A pity, really. It’s a good opportunity to get a groundswell of belief going. As I’ve said here before: the media is a beast, and the beast will be fed.

Koenigsegg-Saab in the news today…..

There was mention of three out of four prominent members of the Koenigsegg group in the news today:
——
Bard Eker was making all the right noises in an article in The Guardian newspaper.

“Saab has to refine their quality level, their soul and spirit and we believe that this is something we can help with,” Eker told Reuters in a telephone interview. “The most interesting thing is that GM thinks the same,” added Eker…..
…..”So far we haven’t seen much in terms of environmentally friendly cars from the big (players),” he said. “That is something the smaller companies can more easily attend to because it is much quicker to turn around a smaller company.”
Asked if a “greener” Saab could be in the works, Eker said: “Obviously we have some ideas but it’s too early to talk about them … but environmental thinking is a very important thing in our view.”

It looks like maybe Kroum’s dream of a 500hp supercharged Koenigsaab 9-5 might have to wait a little.
I hope not, but maybe….
This is a great bit:

“They have a good management team and obviously that is something we will not interfere with,” he said.
Eker said the car industry faced “much more pain ahead” but that the opportunity to buy Saab was simply too good to pass up.
“The auto industry survivors will be much more dependent on bringing something new to the table in terms of technology and environmental thinking (after the crisis ends),” he said.
“Rising to such opportunities is one of our strengths.”

The rentention of Saab’s management team – who have kept Saab alive despite every GM attempt to make it irrelevant and homogenised – is a key to Saab’s ongoing growth. These people know what they’re dealing with.
——
Confirmation from a local San Diego newspaper that the Mark Bishop who holds 22% of The Koenigsegg Group is the Mark Bishop that we were speculating on a few days ago – the one I’ve dubbed “Flipper”.

A Rancho Santa Fe resident with a three-decade history of selling mortgage debt was identified yesterday as one of the new prospective owners of Saab Automobile.
In the deal announced yesterday, Mark Bishop, managing director of Liquiddium Capital Partners in Westlake Village, would own 22.2 percent of Saab, with the remainder held by Sweden’s tiny Koenigsegg Automotive and two other firms.
Bishop, 53, was traveling in Europe yesterday and could not be reached for comment.
Bishop has no known background in automotive companies. At Liquiddium, he’s in charge of finding funding and institutional investment for the firm’s real estate holdings.
Liquiddium’s strategy is to buy foreclosed-upon or underperforming real estate properties – including apartment complexes, retail stores and storage units – and then hold them for four to six years before reselling them.

Maybe I’m being too hard on Flipper? Maybe it’s the innate human desire to find someone to blame for things that go wrong?
I find his business (which has been more sub-prime oriented than is written here) and the outcome from it quite unpalatable but there’s nothing illegal about it. The fact that he got out of it before everything melted down shows some good timing.
I’ll try and mellow up a little.
——
And the name behind this whole Koenigsegg thing, Mr CvK himself, was also in the news.

Christian von Koenigsegg, founder of the sportscar maker that plans to buy Saab Automobile, said on Wednesday that Saab’s cash flow goals were “fairly reasonable” but hinged on economic conditions…..
…..”We are contemplating different scenarios according to what the market looks like and how that affects the business plan,” Christian von Koenigsegg told Reuters in an interview. Asked whether the new company could reach a positive cash flow as expected by Saab after 2010, he said: “That sounds fairly reasonable, but it all depends on the market conditions and if there is a turnaround in the economy.”
Koenigsegg said the business plan was undergoing stress tests and that he was cautious about the outlook for 2009 due to the downturn in the global economy.
“Our ambition is to turn the company around and keep it for the long term,” he said. “We are entrepreneurs. We are not venture capitalists.”

Again, he’s making all the right noises.
There are a lot of questions going around, especially in the Swedish media, about how this tiny company can afford to operate one that is thousands of times larger in terms of scale.
The PR gurus are very aware of this, which is why “financially strong” is being mentioned whenever you hear a Saab-connected person speak at the moment.

Amen, brother!

Jim Jelter, Marketwatch:

But anyone expecting Saab to be a big moneymaker for GM was bound to be disappointed. It was a boutique car company with a loyal but narrow fan base — nothing more, nothing less.
Company boss Christian von Koenigsegg knows that, and he’s shaping the company’s strategy accordingly. Koenigsegg, in comments Tuesday to the Swedish press, said they are taking a “very long-term approach” to restoring Saab.
As a Swede, and a car guy, he understands Saab’s origins and its strengths. His own company is at the extreme end of the boutique line of carmakers, turning out a mere handful of high-performance, hand-built and exorbitantly-priced road burners a year.
For Koenigsegg, Saab is not a trophy. It’s a massive undertaking that will make or break the company.
Regardless of the outcome, it’s refreshing to see at least one conquest from GM’s expansionist reign released to its native habitat. Perhaps, with a little nurturing from engineers who know how to let a car breathe, it might once again thrive in the niche market it never should have left.

My emphasis added.
Whatever suspicions I have about some of their funding partners, CvK and Eker are the real deal and have livelihoods staked on this.
Talent + pressure = inspiration?

CvK talking the talk on Saab

This quote was picked up by Karen and dropped into comments. I think it’s a pretty important one to get a feel for what Koenigsegg might want to do with Saab:
…..quoted in new AP article “New investors face tough road ahead to right Saab” By TOM KRISHER and LOUISE NORDSTROM

“…Von Koenigsegg, in an interview with Swedish television, seemed to agree, saying that the new owners would try to restore some of the brand’s heritage while finding a place in the market between upscale and mainstream. “This is neither a luxury or a people’s car, but it has its own niche — a bit of postmodern comfort, sporty, but with environmental thinking,” von Koenigsegg said. “We want to capture the Swedish aspect too. GM had a bit more of an international approach, and Saab drowned a little bit in that context. … Von Koenigsegg dismissed criticism about his company having no experience in large-scale production, saying it isn’t needed because Saab has that knowledge. He said Koenigsegg can contribute green solutions and engine technology.”

Between upscale and mainstream is a fairly delicate niche to carve out, but it’s probably about right.
The most important bit is Swedish identity, which is what Saab sorely needs once again.
CvK’s first assignment is to harness everything Saab’s got in terms of design capability, maybe pair it with Eker Group’s design facility, and put together an absolute killer of a Saab 9-3.
They would have viewed a 9-3 prototype as part of the Showroom of The Future that they saw in the bidding process, but I’ve got a feeling that that car isn’t going to cut it.
The next Saab 9-3 will be the biggest statement in the company’s history. Period. It needs a signifcant separator to distinguish this as an all-new car from an all-new company.

Christian Von Koenigsegg speaks on the Saab deal

The following is a transcript from TTELA, the local newspaper in Trollhattan.
As you might expect, stories about Saab are filling the tops spots on their website right now.
This is one of them.
——
Long-term and Swedish
Christian von Koenigsegg on intentions with the purchase of Saab
ÄNGELHOLM
A Long Term Swedish car company. This is the intention behind Koenigsegg’s purchase of Saab. So says Christian von Koenigsegg to media today.
At the same time he points out that it is a financially strong consortium behind the deal and not just Koenigsegg.
– It became clear during the spring that Saab has great concern,” said Christian von Koenigsegg, when TT today met him in the production and exhibition hall at the factory outside Ängelholm.
– Within our group and the network to which I belong, we started to think about the issue and felt that we could contribute to create a solution for Saab and a long-term Swedish car company,” he continues.
He emphasizes that it is a financially strong consortium behind the proposed deal, not just the small sports car manufacturer.
– It is a misunderstanding. It is not the small car Koenigsegg taking over. We are a purchasing group,” he says.
Christian von Koenigsegg does not want to tell how many millions Saab cost.
– I would not go into any details of the current situation, we are in the negotiation phase with GM and offers no comments on it.
That Saab, for several years, has been characterized by miljardförluster (I think that means big losses – SW) not stop the financiers behind Koenigsegg.
– We have gone through Saab in detail and seen what there is for the strengths and weaknesses and we believe that our entrepreneurial spirit and the skills we have in the automobile, and other sectors in our group, can help create a long-term and successful Saab. This is a process that will take time and require much patience and work.
Koenigsegg Group consists mainly of a group of entrepreneurs of a different nature. In addition to Christian von Koenigsegg himself included Mark Alan Bishop, Bård Eker and Augi K Fabela, who is the chairman.
Christian von Koenigsegg can not make any guarantees about jobs in the Saab will remain in Sweden.
– If we become owners of Saab, we shall do our utmost to create a powerful company that can live on the international market.
But stop the jobs left in Trollhättan?
– Our ambition is to build a Swedish car company with all that implies.
Does it mean that the jobs stay in Sweden?
– Yes, very much, “said Christian von Koenigsegg.

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