Fiat/Opel – Sergio Marchionne is scaring the daylights out of me!

The reports are getting more detailed into the proposed Fiat/Opel deal. Unfortunately, for we Saab people, they’re also getting more confusing.
Let’s start from the beginning….
Fiat CEO Sergio Marchionne said late last year that he thought only 6 car companies would survive this economic downturn. Big scale will be the key, he thinks, despite what’s just happened to GM and what’s happening now to Toyota.
In following his own beliefs, Marchionne is going out and acquiring everything he can. He’s already sewn up a cashless deal with Chrysler, which will give him access to minivans and North America. Now he’s looking to add GM Europe, in something he calls a “marraige made in heaven”.
So what about Saab?
Logic would tell you that Saab are so far along the reconstruction path that they should just continue with that and become their own company with a new owner.
Some news services see it like that, and some don’t. Here’s Reuters:

The merged company would also include Saab, GM’s small Swedish brand which it is selling separately, the paper said.

And here’s AFP:

GM Europe also includes the British company Vauxhall and the Swedish carmaker Saab. Saab may not be included in the deal, however. The company is being reorganized under Swedish law and is likely to be separated from the rest of GM’s European operations.
GM Europe spokesman Frank Klaas said the company has several possible investors, which he wouldn’t identify, but said, “we are in very good negotiations with them.”

Marchionne’s plan really has me trembling a bit.
I have absolutely no doubt that packed in amongst a bunch of car companies like the group he proposes, Saab would become the forgotten brand once again in no time flat.
I fear for my other little favourite, too – Alfa Romeo – but that’s for another time and blog.
If Saab are scooped into this process, it really would be a tragedy for our favourite little Swede.
Saab-focused engineering? Forget it?
Boutique advertising? Forget it?
Innovation? Not outside the bounds of the corporate entity, please!
This would just be GM with a different accent, most likely a German one as Saab would no doubt fall under the supervision of the brand it shares the platforms with.
Mr Marchionne,
The last time someone had a crack at world domination, Sweden did everything possible to stay neutral. We, the Saab nuts, would prefer if history repeated itself, please.
Go out and conquer all you like, but leave Saab out of it.
When your new global entity collapses under its own weight in a few years from now, I’d prefer it if Saab was well clear.

Monday Morning Snippets – FM, Troll Racing and how to turn a gun into a Saab ute!

I normally don’t like Mondays that much, but today I’m feeling quite optimistic about the week ahead. I don’t know why, but I have music in my head, a smile on my face and I’m feeling good.
Better make the most of it…..
The “FM” in the headline relates not to corny DJ’s and adult-oriented soft rock music, but the looming prospect of “Fiat Motors”.
Reluctant to learn from the General’s experience, Fiat CEO Sergio Marchionne seems to want to add Opel, Vauxhall and maybe even Saab to his current juggling act of Fiat, Lancia, Alfa Romeo, Ferrari, Chrysler and Dodge (and then there’s Fiat’s commercial and industrial activities).
The board have come out and stated the following:

Fiat “would evaluate several corporate structures, including the potential spin off of Fiat Group Automobiles and the subsequent listing of a new company which combines those activities with the activities of General Motors Europe”

The big question is whether or not Saab would be included in any negotiations on this topic. Saab’s current carve-out activities would indicate a “No” on that one, but various news services are talking as if Saab would be included.
My call with Eric Geers that had to be delayed late last week should happen some time this week. You can bet that’ll be one of the first questions.
Stay tuned.
And for the record, I think would be a disaster waiting to happen. As much as I love both Saab and Alfa, I wouldn’t want them together like this. Not in a million years.
The title of this photo from Flickr is Illegal streetrace in Trollhättan, Sweden. The accompanying caption on the photo says Opel Speedster with a Saab engine shooting flames.
Noting the Trollspeed sticker on the wing, I’d believe it, too! Trollspeed are a performance engine building company on the outskirts of Trollhattan and have done a lot of work for Per Eklund and others in the past.
Hey Eggs!!
Forget that 900 Convertible you’re looking for. I got your next car right here, mate!
For sale via Craigslist is this Saab 96 converted over to being a utility vehicle. It’s fair to say it needs a little TLC, but it does come with a spare engine, a restored and treated gas tank, four snow tires on wheels and an original workshop manual.
What’s more, it’s only $500, but the owner will consider a trade for – and I quote – “guns, tires, whatever…….. “
Somebody get on this, stat!!!
My thanks to Taylor for the link.
Finally, another shot from Flickr.
The photo’s by a guy named Daniel and the caption reads One of my first pictures with my new camera 🙂
Daniel, keep on shooting!!
Absolutely magnificent.
I’ve actually featured some of Daniel’s work here before and you can see a whole lot more of his work here.

Tuesday quick snippets

I forgot to mention yesterday that I’m on the road again at the moment. Consequently, I won’t get to everything as quickly as I’d like, but I have got pretty good access on this trip.
Postings may not be as timely as usual. That’s all.
In case you missed the links in comments…..
Our Belgian mate, Etienne, has more photos from the regularity rally at Spa in Belgium.
The Saab 9-5 has been spotted again, this time paying its obligatory dues at the Nurburgring. The four photos are best viewed at Autobild, from #6 onwards.
As the cops say on TV, there’s not thing too see here. Nothing that we haven’t seen before, at least. Please move on.
GM have killed Pontiac, which means that the Holden people in Melbourne are probably filling their trousers with something other than their legs right now.
Holden are basically kept afloat as a manufacturer here in Australia by the export program around the Commodore. They expected to build and ship around 30,000 of them as Pontiac G8s, a program that’s now down the gurgler.
The one possible saviour – which makes perfect sense, by the way – could be the addition of a G8-type vehicle to the Chevrolet portfolio. Personally speaking, if they don’t do this then they’re absolutely crackers, which means they probably won’t.

Friday Snippets – 11th hour edition

GM have a month-and-a-bit to go, but Chrysler’s month is almost up and they’re preparing for bankruptcy.

According to a story from The New York Times, the Treasury Department and Chrysler are readying Chapter 11 bankruptcy documents for filing as early as next week.
The report goes on to say that the filing carries with it an “agreement in principle” with the United Auto Workers that would protect members’ benefits packages, including pension and retiree health care obligations.

I know it’s not Saab related, but this Chrysler/GM fiasco is like a car crash. It’s ugly, but you can’t help but look.
Fiat’s not out of the picture, either. They’ll be waiting in the wings to pick up the pieces but without the heavy baggage labelled “UAW”

Whither Fiat? Apparently, the Italian automaker is still very much in the picture, although under this arrangement, it would not reach its stake-holding deal until after Chrysler is already in bankruptcy court.

And on the GM side of the bankruptcy merry-go-round, they’re apparently going to kill another brand – next Monday.
It looks like they’re no longer excited about their excitement brand – Pontiac.

According to a source at General Motors, the company will announce next Monday its new “faster, deeper” reorganization plan, which will likely include a death sentence for the Pontiac brand.
Inside Line called Tom Wilkinson, news relations PR man for General Motors, who said: “There’s nothing I can share with you at this time. Keep your eyes on our media site. Officially, nothing has changed with Pontiac’s niche-brand status, until you hear differently.”

It’s like the who company is in an uncontrollable spin and bits are flying off due to the centrifugal forces.
Because I keep an eye on these things, it’s noted that the Saab 9-3 has been overtaken by it’s countryman – the Volvo C30 – in the top 3 of the Gaywheels most researched cars survey.
This is one of the most under-appreciated Saab shapes, I think: the first generation Saab 9000.
This one’s a black Carlsson edition, photographed by our unofficial Saab ambassador to the UK, Robin M.
The Porsche search has begun and wow – it’s a worry.
I’ve looked into one in Sydney and whilst it looked good and had the engine I’d really like, there are two issues that might need attention.
A car having two issues is not normally something that would put me off. But the parts alone – forget labour for a moment – cost over $2,500!!!!
I may have to look further into the local 1983 model that’s for sale here in Tassie. I drove it back in November last year and whilst I swore I’d not get a pre-1986 model at that time, my budget’s just not going to make it.
Plus, it’s local, it drives great, looks great in silver with the cookie cutter wheels and the price is much more reasonable.
The only other options are an MX-5 or do nothing.

Thursday Night Quick Snippets

It’s been busy here at SU-central tonight. We have some family coming from the mainland over the weekend so we’ve been baby-proofing the house, etc.
I thought I’d better jump on the computer, though, and post a quick update on some events from the last 24 hours that I haven’t covered yet.
I’ve received a number of emails about the fact that Saab aren’t the only company dropping their V6 engine in 2010.
Audi are also dropping their 3.2litre V6 offering from the A3, A4 and TT ranges of vehicles in the US market.
I still wonder about the loss of prestige from this.
Mark down May 2009 as the last continuous month of ‘normal’ operations for General Motors.
In what was undoubtedly the biggest story of the day, GM’s CFO Ray Young indicated that the company will default on a bondholder payment due on June 1. GM are trying to negotiate a debt-for-equity deal with these bondholders, but it looks unlikely.
This default will more or less automatically trigger a bankruptcy procedure, which I’m sure both GM and the US government are working on as we speak.
What I’d like some clarity on (still) is exactly how this will effect Saab and their ongoing effort in reconstruction.
Fiat CEO Sergio Marchionne said a few months ago that maybe only 6 automotive companies would remain when all is said and done at the end of this financial crisis.
He’s trying everything to make sure Fiat are one of them.
First there was the Chrysler deal, which looks like it’s going nowhere (though it’s still under negotiation). Now Fiat are being spoken of in terms of hooking up with Opel.
Is there anyone Fiat aren’t in bed with at this point? It’s like they’re the Paris Hilton of the automotive world.
Wolfgang has written in to me about an article in an Austrian news service stating that Magna are thinking about Opel as well.
Magna have fingers in just about everyone’s automotive pie, so it’s not too big a surprise that they’d be interested in consolidating their business in Europe.

GM-Saab update

Three peace activists get jail time for sabotaging a Saab Gripen fighter jet. And yet no-one gets jail time for almost 20 years of sabotage to Saab Automobile?
Representatives from the unions at Saab Automobile went to visit with Sweden’s Secretary of State Jöran Hägglund yesterday. They were seeking talks on some government concessions for the car industry as well as some action on all that money the Swedish government promised, none of which has actually been spent yet.
Unfortunately, they came away empty handed and discouraged, with the only light at the end of the tunnel being that Mr Hägglund has agreed to meet with the again in the near future for further discussions.
The scheme they were promoting are as follows:

  • a scrapping premium of at least 15 000 SEK, similar to that in other European countries. Extra deductions from benefit for new business cars,
  • increased discounts on nybilsinköp (whatever that is) for business, and
  • ten years of tax exemption for green cars.

They took the signatures of almost 13,000 line workers and engineers in support of their requests.
And speaking of unions, IF Metall’s Paul Akerlund says that orders are looking up.
We follow orders all the time and the last week we have seen the trend to a better order intake,”
I’m sure things are still well down, but this is good news.
Over in GM-land, things are looking grim.
There are a couple of reports doing the rounds that show just how big a house of cards this whole situation is. Thankfully, it seems Swedish legislation will protect Saab from much of the fallout if things go belly-up.
First, there’s the whole surgical bankruptcy theory, which the Detroit Free Press describes as being elusive as rocking horse poo.

The notion of a surgical bankruptcy relies on many unproven assumptions, including the idea that a bankruptcy judge will shortcut a legal process designed to make sure everyone gets their day in court, he said.
The only way GM could exit bankruptcy quickly is if its unions and bondholders agreed to concessions before the process began, Bernstein said…..
…..”If they don’t agree, there’s no way you’re going to be in and out quickly.”

So GM would have to rely on the unions to get their quick exit from bankruptcy?
Good luck with that!

The idea that the company’s pension liabilities can be dumped on the “Bad GM” appears equally problematic.
The pension holders have an interest in 100% of GM today, Bernstein points out. Why bet their future on the possible sale of brands and other property GM no longer wants?
“Who’s going to pay a meaningful amount for bad assets?” IHS Global Insight research analyst Aaron Bragman asked. “Can they actually sell these things? If they can, will it be enough to cover the bankruptcy costs and pension liabilities?”
The pension funds would probably fight any bankruptcy that lumps them with GM’s distressed assets.

So it’s not going to be as cut and dried as the powers-that-be would like.
What about the guys on the ground, the dealers?
Bloomberg’s got them covered:

The repercussions from GM and Chrysler franchise cancellations could spread swiftly to other carmakers. According to the NADA, there were 19,790 new-car dealerships in the U.S. as of March 1, fewer than 3,000 representing a single brand. Since most dealers own multiple franchises, their borrowings often cover multiple brands and properties.
If vehicles in a Chrysler showroom were seized and sold at auction, for example, the proceeds might not cover the dealer’s loan. A lender could thus demand repayment on related loans covering the dealer’s non-Chrysler brands.

So basically, GM go bust and the bankers call in loans on inventory and liquidate their fleet to get their money back. If the Chevys in the lot won’t cover the debt, they’ll go for the Nissans/Mazdas/Volkswagens/Whatevers until they’re satisfied.
The long arm of the law, indeed.

What would a GM bankruptcy really mean for Saab?

I have no answers to the question that makes up the header for this post. I really don’t know what will happen if Saab are still under GM’s ownership when they file for bankruptcy (which looks inevitable now, by the way).
Saab are courting up to 20 potential buyers, with maybe 5 of those being serious and the rest either just looking or indulging in some wishful thinking.
In my mind, the best course would be for one of these potential owners to purchase Saab in the very near term and transition the ownership in an orderly manner. This would give Saab minimal disruptions and ensure that their loans could be applied for quickly, and their future cars would come out as close to the schedule as possible.
Of course, those potential owners want to get Saab at the cheapest price possible. And that means they might want to sweat GM out rather than purchase Saab quickly.
The latest bankruptcy news from the US isn’t encouraging:

Sources close to the plans say that President Obama’s auto task force has ordered GM to prepare the groundwork for a “surgical” bankruptcy, even as GM executives publicly stand by their out-of-court restructuring plans.
….”If we need to resort to bankruptcy, we have to do it quickly,” Henderson said in an interview with the Canadian Broadcasting Corporation.
One plan the task force is looking into was mentioned last week by GM Chairman Kent Kresa. In that plan, a new company would be created with all of GM’s “good” assets, such as the Chevrolet, Cadillac, GMC and Buick brands, while the old company would be saddled with the “bad” ones, like Saab and Saturn. Eventually, the company with the undesirable assets would be liquidated.

I’ll put my moral outrage at Saab being classed as part of “bad GM” aside for a moment. The real matter at hand is what this would mean for the potential sale of Saab.
It seems that if an orderly transaction isn’t forthcoming before Obama’s 60 days are up (i.e. the end of May) then Saab will be part of this liquidation process. It sounds like an owner could buy them for a lower price, but I also worry that parts of Saab’s operations could be broken up and sold off separately.
I’m just worried that the organisation could become fragmented in this situation, that a smooth transition would be thrown out the window and that a new owner would be picking up desireable pieces of Saab, but not all of it.
I honesty do not know how this situation could play out. It’s completely beyond my frame of reference.
If anyone out there has an insight or some experience with such situations then please feel free to fill us in.
I just want Saab to make it to a new home in one piece. I want them to stay Swedish, not get sold off in pieces with bits moved here, there and everywhere.

Wednesday Snippets – constipated edition

Follow the links and you might see the reason for the title.
I’m still away with work. When will it end??
Autoblog report that GM are running rabid, making extensive preparations for Chapter 11 bankruptcy.

The report states that GM could be split into two separate entities; one “new” unit consisting of the General’s successful brands (read: Chevrolet and Cadillac) and an “old” unit made up of its less-profitable endeavors (Hummer, Saab, Pontiac and Saturn).
If the plan is enacted, the all-new GM would assume some of the debt from the bankruptcy (primarily, unsecured debt) and that GM’s bondholders would lose a substantial amount of value if the Chapter 11 filings go through.

I really hope Saab can secure a sale soon and avoid all this mess. I’m not sure how it would effect Saab in its current state, but it doesn’t look like a great thing to be a part of.
Then again, it may be music to a potential Saab investor’s ears.
The Detroit News ponders recent news that people are actually interested in investing in Saab or Opel/Vauxhall. They just don’t seem able to believe it:

The Financial Times again, reports out of Sweden, that Saab has received interest from 20 what it calls “active parties”. No suggestion as to why a company which sold 93,000 vehicles last year, and needs annual sales of 130,000 to break even, would be attractive to investors. A Swedish court Monday gave Saab more time, until May 20, to restructure in bankruptcy.

The reason why is that Saab have new models coming soon, can make money once free from GM and are a freaking cool company. Dig?
I don’t have iPod or phone connectivity in my car, not even a hands-free kit. I don’t have an iPhone, either. in fact, I don’t eve own a phone of my own and probably won’t for years.
Yet somehow this picture seems significant.
From Flickr.

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