Swedish government still bullish on Saab

Despite the Swedish Prime Minister’s mini-rant a few days ago, it seems there is still some hope for Saab, even if GM go into a voluntary Chapter 11 bankruptcy as some are predicting they might.
This is a report from Swedish radio today, translated by someone who wishes to remain anonymous.
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The Swedish government has not given up the hope to save Saab. The negotiations with Saab and it’s owners GM, General Motors, continue, say state secretary Jöran Hägglund to the Swedish Radio.
The negotiations are firstly about GM’s requirement on the Swedish government to guarantee loans from the European investment bank.
— There are no concrete ready proposals to consider yet, says state secretary Jöran Hägglund, but I think that the talks are conducted in a good spirit.
It current situation is very pressed for GM now. The giant car manufacturer will Tuesday evening in Washington show how the company can become profitable again, and how GM can repay the government loans of more than 100 MSEK.
During the weekend there was information published that GM had plans to file for bankruptcy protection for the core business in the US and let the other parts, among which would be Saab in Sweden, file bankruptcy.
This is nothing Jöran Hägglund has heard during the negotiations, but if this would become reality, it would change the conditions of saving Saab, he notes.
“GM has declared that they would like to sell Saab. But currently, there is no buyer”, according to Jöran Hägglund. He totally excludes the possibility of the government to own Saab.
The loan guarantees that have been discussed would be 5 billion Swedish kroner for a development loan from the European investment bank. GM is so weakened that the Swedish government must warrant the loans.
Even if GM would let Saab go, there is the opportunity for Saab in Sweden to seek loans with government guarantees, according to Jöran Hägglund:
— The most specific demand is that all projects for which government guarantees are sought for must be conducted in Sweden.
According to Jöran Hägglund, the Swedish government has not yet been informed about what GM will say about the future of Saab when they will present their future plans for the US authorities in Washington.

Media going nuts over Saab

It’s crunch time for General Motors and Saab.
The deadline, as much as I’d like to ignore it, will come and go tomorrow, though it may not be until the end of March before a final decision arrives as to the Final Plan that will determine GM’s path.
The mainstream media has proven itself once again to be quite capable when it comes to speculation and the race to get a headline.
From SVT, a Swedish source, as mentioned by Dippen and Trued in comments:

“Both sides blaming the other to take responsibility….. total breakdown
GM offers 600 million dollars and no more strings attached with SAAB!
Swedish gov. does not want responsibility for the company.”

OK, that’s Trued’s summary and not a direct quote.
And then there’s this from Reuters:

STOCKHOLM, Feb 15 (Reuters) – Sweden’s government on Sunday dismissed a Swedish television report that negotiations between struggling U.S. car maker General Motors Corp (GM.N) (GM) and Sweden over GM’s loss-making car maker Saab have broken down.
GM and the Swedish government were not able to agree on the terms of 5 billion Swedish crowns ($599 million) in loan guarantees to create an independent company of Saab, public service broadcaster SVT said, citing sources.
Lisa Warn, spokeswoman for Swedish Industry Minister Maud Olofsson, denied talks with GM had been halted.
“Discussions are ongoing. This (report) is something we don’t recognise at all,” Warn said.

As Jack Nicholson said as The Joker said back in 1989 – “hubba hubba hubba, who do you trust?”
We have three possible outcomes:
1) The government come to Saab’s aid and they go the quasi-independent route. This is the most desireable proposition as it means minimal disruptions.
2) GM file for bankruptcy in the US with government support (which is being reported more and more as a possibility) and they either sell Saab, or close them down.
3) Chaos.
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UPDATE:
More from Dagens Nhyeter, with thanks to ctm:

Reinfeldt lukewarm to the plan for Saab
Negotiations between the government and General Motors about the future of Saab Automobile is not going too well, according to sources within Saab. The company is more and more frustrated at the lack of policy certainty.
Meanwhile the government believes that it is the responsibility of General Motors and that the basis data so far has not been enough. The conclusion is close at hand that the government reject GM’s business plan for Saab.
– “There are many who call for help during these difficult times. We have to keep a cool head,” said Prime Minister Fredrik Reinfeldt to DN at a debate in the public television Sunday evening.
– “It’s about the taxpayers’ money,” he said.
….
GM operates on several levels to fulfill their commitments [for US government aid]. The strategy for Saab is perceived by government as pure blackmailing, that the ultimately responsibility is passed on to the Swedish taxpayers.
Saab is a brand within the GM and has been there for a long time. This is primarily for GM’s responsibility, according to the government.
Maybe we get decision on Tuesday night. According to the Wall Street Journal, GM is working two scenarios: more support for the operation in anticipation of a turnaround, or a breakup of GM in two parts – one that is continued forward, and one that is liquidated or sold. Saab is then expected to fall into the latter half.

Robert Collin on the GM Crisis and Saab

Robert Colllin is the chief motoring writer over at Aftonbladet, a Swedish daily newspaper.
With things looking somewhat precarious for Saab at the moment, Collin’s written an editorial urging the Swedish government to think long and hard about the consequences of letting Saab hang out to dry.
ctm’s been kind enough to provide a translation:
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Why the hesitation from the Swedish government about Saab?
At 5 PM, Tuesday, February 17, when the stock market on Wall Street has closed, the decision about Saab will become public. That’s the moment when General Motors will present its plan for survival to the US Congress.
Of course, GM boss Rick Wagoner can not state that parts of the aid package that the Congress and the Senate approved on Friday will go to GM’s factories in Russia, China, Australia, Germany, Sweden and many other countries. The money must stay in America.
But on the other hand it is not feasible, and no one demands it, that he should close down all operations outside the US. Russia and China are GM’s largest growth markets, although the shows a loss right now. Australia is almost “domestic” to GM, and Opel in Germany showed profit before the financial crisis.
Saab is the problem child with losses year after year. But despite the crisis, it may never have looked more promising for Saab. The ancient 9-5 will be replaced already in the autumn, the small SUV 9-4X is ready for production, and the 9-3X was shown a couple of days ago. It will go into production in Trollhättan this summer.
GM chief Rick Wagoner used the expression “carving out” when I met him in January. He said that GM has to “cut out” Saab from General Motors. Saab has to become independent with its own accounting, not an integral part of GM. But a closure was not on the table, according to Wagoner.
The problem of a closure is not only the disaster for Trollhättan, for the entire Southwestern Sweden – and in the end also for Volvo. Because Rick Wagoner is not the sentimental type. No, it is at least as much about anticipated claims from Saab dealers around the world (the closure of the GM brand Oldsmobile has cost General Motors billions in damages). And about the investment GM has made in new Saab models that will begin to give money back as early as next year.
The Chancellor of Germany, Angela Merkel, promised the automotive industry huge loans. Sarkozy in France are doing the same. Why does the Swedish government hesitate? It’s difficult to understand. Perhaps because the government is playing cat and mouse, and hope to avoid guaranteeing loans from the EU. Perhaps for ideological reasons: they think that companies have to fend for themselves. But I can not believe that the government leaves Saab to its fate.
Sure, Saab is not a large company. It has “only” 4,700 employees in Sweden. But Saab is far greater than the number of employees. Saab is an integral part of the Swedish automotive industry. If the government does not think that Saab is worth preserving – who, then, would think that Volvo Cars, which is making losses right now, should be retained? And what about Scania and Volvo trucks? And the big Swedish automotive parts industry? 140,000 people are working within the Swedish automotive industry and vehicles account for 15 percent of the Swedish exports. And it is about a know-how in automotive and environmental technologies that could be lost forever.
Saab is a small company. And has rarely made profits. But it is one that is necessary to keep the Swedish industrial machinery running. Without Saab, Sweden grinds to a halt. And then it may be too late.

Saab postcards for GM and the Swedish government

General Motors and the Swedish government are engaged in a giant game of chicken and it’s our favourite little car company that’s at stake.
The Swedes say GM has to pour more money in before they’ll consider matching it. GM say they’ll cut Saab loose if the government doesn’t come to the party.
I wish they’d both take a breath and come up with a solution that gives Saab the best chance it’s ever had at achieving profitability, growth and survival.
So maybe you’d like to write to either of the parties involved and let them know how you feel. Be friendly and polite. Perhaps you should send them a postcard to remind them what’s at stake.
Feel free to download any of the following images and send it along. There are 28 of them all together. Swedes are here. GM should be reachable in your home country via the Saab website there. Maybe you can’t send them a picture, but feel free to download a pic anyway. If you run a website then maybe you can put one up there with a link back to this post.
9-3 conv snow open.jpg
95W_002_1200726.jpg
1997_9000_aero_5.jpg
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Read moreSaab postcards for GM and the Swedish government

Swedish PM acting tough. Like a ninny.

I know I shouldn’t go name-calling when it comes to Prime Ministers who can tip the scales when it comes to Saab’s future, but this is getting seriously silly.
Dagens Industri had an aticle yesterday (can’t get the link to work) where Fredrik Reinfeldt, out esteemed man of the hour, puffed his chest out and pointed his finger squarely at General Motors as the reason why Saab might not continue to exist in the future.
ctm’s provided a translation (thanks, bud!)
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The Swedish government seems to have a mild interest in providing loan guarantees to Saab owner GM, and at the same time Prime Minister Fredrik Reinfeldt is worried by increased protectionism.
Saab owner General Motors (GM) is reported to seek loan guarantees from the Swedish government of 600 million U.S. dollars to be able to operate Saab until a possible sale. But Reinfeldt does not sound particularly enthusiastic about the setting.
– “It must be GM who are responsible for what happens to the now fully integrated part called for Saab. Saab is no longer an independent company, but more of a brand in a portfolio of brands in this big company,” he says.
What happens to this brand is “nothing Swedish taxpayers have direct responsibility for,” says Reinfeldt.

That’s true, Fred. But it wouldn’t hurt if you provided some incentives to kick start the local market.
But, whoever’s fault it is, that’s in the past.
You want a two-company automotive industry in your country’s future? Then bite the bullet and provide the guarantees you said you’d provide.
Saab, the Swedish guys, are working their butts off to ensure that they’ll be able to sustain themselve in the future despite the negligence shown by their corporate overlords.
This should make you happy, Fredrik. No?

….Reinfeldt is concerned over the situation for the Swedish export industry and growing signs of protectionism due to the crisis.
– “It is a historically significant and rapid decline for the Swedish export industry, followed by significant advanced notes of downsizing and increased unemployment. It is a result of shrinking key markets worldwide. It is frustrating because it is very little we can do about it.”
– “There is talks support packages in Sweden, but how do we design that so the customers in Germany, USA, Russia, China continue buying?”

You can’t.
All you can do is hang and plan to be around when the world starts spending again. You’re acting like a deer caught in the headlights and you’re about to get trampled, mate.

According to Reinfeldt, aid packages are often launched as crowd-pleasers but the results is that the trade and credit flows are nationalized.
– “They are often executed in order to tell voters around the world that ‘we are careful with your tax money and will ensure that it is only used for your local interests’. That will make the world poorer, We remove one of the cornerstones for global wealth, namely that we profit on cross-border trade.”

Nobody’s profiting right now, Fredrik. They’re just trying to survive and restructure so that when the good times return, they’ll still be around to enjoy them.
You’re a politician. You should know exactly what that means.

GM talked with Kia about Saab

Kroum has just picked up on a Reuters report stating that General Motors had been in talks with Kia about the possibility of buying Saab.
Earlier in this who GM Crisis debacle, GM stated that they there was one potential suitor for Saab, though no names were mentioned and nothing further has been said about it. All the talk since has been about Saab getting support from the Swedish government, staying under GM’s ownership but being self-managed. With new models on the way, the hope is that Saab can become profitable and then be a more attractive asset to sell.
The Reuters report reads as follows:

Executives of Kia, led by Kia President Eui-sun Chung, have had discussions with GM over the Saab premium brand, three sources with knowledge of the talks said.

From what I can tell, Kia is actually a subsidiary of Hyundai. in that same report, Hyundai claim they’re not looking to do any deals:

From Hyundai Motor Co to China’s SAIC Motor, Asia’s automakers have repeatedly said they have no appetite for deals at a time when cash is scarce and global sales are in decline. But efforts to interest them in potential deals have continued nonetheless.

The report also states that Ford have spoken to Hyundai about acquiring Volvo.
My take – there may have been talks, but I think they were probably exploratory in nature and led nowhere. I really think the government option is the one GM and Saab are pursuing with the most energy.
Mind you, the Koreans could just be killing time and waiting for GM to trip up. Then the fire sale will really be on in earnest.
——
This is what I had to say about this possibility back when we were discussing such things:

Hyundai
Hyundai are building some good vehicles nowadays. Their new Genesis thingy has people genuinely buzzing. They have a very strong corporate culture, a wide industrial base and like other Asian manufacturers, they could probably see some value in having a genuine European brand under their wing.
Ah, who am I kidding?
Hyundai are like the brussel sprouts of the car business. Apparently they’re good for you but it’s a rare person that really likes them.
They might have money (they might not, too) but they’ve got no soul when it comes to the car business. They need to go out and do something extraordinary. Until then, I’m just not interested.
TS Verdict:
Potential: Medium
Probability: Unknown, could be anything
Desireability: What?

Thursday Snippets

Bloomberg are sowing seeds of skepticism about Saab’s survival with a piece indicating that Saab may not be able to secure the funding it needs to keep going.
The Swedish government has pledged to guarantee loans from the European Investment Bank but they want to see more commitment (money) from General Motors in order to provide assurance of Saab’s sustainability.
That mightn’t have been so difficult six months ago, but with the bottom falling out of the market in recent months (Saab were down by between 50-60% last month) it’s now a much different proposition.
GM are counting on the Swedish government not wanting to lose Saab. The Swedish government are counting on GM wanting to build Saab up so that it’s saleable in the future rather than just shutting it down and getting nothing back for its efforts thus far.
It’s a giant game of corporate chicken.
Hopefully someone blinks before the weekend so we’ve still got cars to talk about in the future.
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Forbes have named the Saab 9-3 on of their Safest Cars of 2009.
More should be made of this. We know it. Forbes know it. The market should know it, too.
——
Top Gear have a cracker of a blog post that sums up GM’s stewardship of Saab pretty well:

If you want to know what’s been ailing Saab all these years, today’s unveiling of the 9-3X wagon is a good place to start. Saab actually invented this car seven years ago. But GM bungling means it hasn’t been released until now.

That is the blogging equivalent of a nutshell. Recommended reading.
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Arild ensures the flag is flying at all times:

Here’s a wintry greeting from Norway. We have had a lot of snow the last days and when you drive the snow whirls up behind the car and covers the back of the car completely. But one should always let other people know what car one is driving!

snowy-saab-badge.jpg
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I’d just like to take a brief moment to thank everyone for their quick uptake here at Saabs United.
I swiched over from Trollhattan Saab to this blog on the weekend, which is traditionally a very quiet time, and today (Thursday) we have our 500th comment on the site.
A small milestone, but one worth mentioning.

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