GM Europe’s Nick Reilly speaks about Saab

Don’t say I never write good stories from the Swedish press 🙂
SVT have spoken with GM Europe’s Nick Reilly at the Geneva Motor Show and he had some very frank words to say about GM and their handling of Saab over the years.
A translation, from Jan….
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GM chief admits: We didn’t try enough with Saab
The head of General Motors Europe, Nick Reilly, recognizes that GM did not do enough to make Saab profitable. Now he believes that there is potential for Saab to succeed. And thus a chance for GM to get back some of the billions it costs to get the deal through.
At the Geneva Motor Show, which secretly started on Monday when many manufacturers took the opportunity to rehearse before Tuesday’s press conferences, the former GM siblings Saab and Opel are side by side. But the formal ties are cut.
Spyker more focused
Now that the ink has dried on the contract of sale of Spyker Cars, Nick Reilly talks about GM’s shortcomings.
“I think that Saab is more suited for a company that can focus one hundred percent of their time on a smaller brand, compared with GM, which typically had a volume label. We could not devote enough time, resources and commitment from management to get Saab successfully. But Saab Spyker will be focused on all this a hundred percent.
TT: Did it take you 20 years to figure it out?
-No, not really. It took quite a long time, especially given that we lost money for several years, so it should have gone faster, but it is what it is.
TT: Do you think that Saab could be profitable?
-Yes, I think. You have to have control over the cost structure. Now Saab is an easier business than when it was in GM, which will help. It starts with a clean slate and with a good product so I do not see why Saab would not be profitable. It has an outstanding legacy of aviation and an extremely loyal customer base.
A Saab that makes money would give GM back some of the costs it has incurred in the deal because GM has received preference shares in Saab Spyker as part of the settlement.
Billion loss
Saab’s loss last year was four billion, according to a provisional balance sheet. GM has continued to pay all suppliers.
In an arrangement in summer Saab had debts of more than SEK 10 billion, which GM has taken over almost everything and been forgiven 75 percent.
GM has also promised to bear the cost of the tooling for the new Saab 9-5.
According to Nick Reilly, they are worth over 200 million euros (about 2 billion). The total for the sale of Saab landing at several billion.
“It costs us a lot, but we prefer much rather use our money that way than to spend money on a shut-down”, said Nick Reilly.

Opel buyout talks collapse – danke GM!!

You European types are all over this already, I know, but for the late sleepers out there…..
German officials held 12 hour talks last night with the bidders for Opel and the end result of this marathon?
One potential owner withdrawing from the talks and quite possibly, the whole sale, and a 300million Euro hole.

Talks aimed at saving General Motors Europe’s Opel unit broke down amid acrimony between Germany and the United States on Thursday as fears mounted for tens of thousands of jobs across Europe.
The marathon negotiations were aimed at finding a suitable buyer for GM’s struggling European operations, with the German government willing to offer billions of euros (US dollars) in loan guarantees to any potential investor.
Two bidders, Italian car giant Fiat and Canadian auto parts maker Magna International remained in the race after a third bidder, Brussels-based investment firm RHJ International pulled out during the talks.
German officials blamed the breakdown on a last-minute request from GM for an extra 300 million euros (415 million US dollars) of funds for Opel, lashing out at General Motors for “scandalous” negotiating tactics.

“We are not amused” would be an understatement….

Speaking to reporters in the early morning, German Finance Minister Peer Steinbrueck said: “We were unpleasantly surprised when this new demand came out of the blue at 8:00pm local time (1800GMT). We found that pretty scandalous.”
“GM again confronted us with new figures,” said Economy Minister Karl-Theodor zu Guttenberg, adding that the US government “could have made more of an effort” with its choice of representative at the discussions.
“We have made a fresh request to the US Treasury and we expect a response before Friday,” he said, calling its input so far “marginal, to put it politely.”

I’m not sure there’s a limit to the number of people GM can annoy during one calendar year, but they’re sure exploring the outer limits.
New talks are scheduled for Friday, after the participants get a chance to catch up on some much-needed sleep, and in the case of the German officials, do some of that pesky running-the-rest-of-the-country stuff.
And for Saab…….?

FIAT to submit GM Europe bid this week

News sources are just starting to percolate with the story about FIAT reportedly planning a non-cash bid for GM’s European assets.
Not much is known as yet and it’s all from “unnamed sources” etc, but the story does include Saab so it’s worthy of some space here:

Italian Fiat SpA will submit a non-cash bid for the acquisition of German Opel in the portfolio of US General Motors by Wednesday (20 May 2009), Dow Jones reports on 18 May quoting a source close to the situation.
Chief executive Sergio Marchionne is expected to meet with German state representatives these days, continuing his efforts over the past four weeks to close a merger deal between Fiat, US Chrysler and GM Europe.
According to the source, Fiat plans to reduce the production of GM European units Opel and Saab, but will not close down any GM plants in Europe.
The source said that Marchionne has contributed personally to the final details of the plan.
Fiat made no comment on the news.

I’m sure more will come out about the composition of the bid during the week.
——
It’s certainly going to be an interesting two weeks coming up.
Saab are back in court tomorrow. It’ll most likely be a closed hearing and my understanding is that Saab are quite confident they’ll tick all the boxes required to gain their next three month extension.
GM will most likely go into court themselves, possibly before the June 1 deadline, to commence Chapter 11 bankruptcy proceedings.
And there’s this bid by FIAT.
By the end of June, maybe even sooner, the automotive landscape will be almost unrecognisable compared to just six months prior.

The 2010 Saab 9-5 is so good that Henderson doesn’t want to let it go.

A story that’s just come to my attention from the Swedish newspaper, Expressen, states that GM’s new CEO, Fritz Henderson, is appearing reluctant to sell Saab, even preferring that they fail in their bankruptcy proceedings.
The reason?
Because the 2010 Saab 9-5 is apparently so good that Henderson wants to keep it!!
Martin B has sent through a translated summary of the original article:
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According to Swedish newspaper Expressen, GM´s Hendersson prefers bankruptcy for Saab instead of selling Saab.
The new Saab 9-5 is too good. Therefore GM´s Fritz Hendersson hesitates to sell Saab.
– Fritz Henderson is very afraid to have the Saab as a competitor in the future,” says a source within General Motors.
-Geely has put a lot of effort in buying Saab, but Fritz prefers a Saab in bankruptcy
The new Saab 9-5 superior
Internal GM tests shows that the new 9-5 wins over the praised Opel Insignia.
– Even the Germans regards the 9-5 to be cooler and better than the Insignia, states Expressen´s source.
The Insignia top model – the Insignia OPC – has just been introduced to the market, and the Saab equivalent will be the 9-5 Aero. These two cars were recently tested at GM test track in Dudenhofen, and the 9-5 was a clear winner, which, according to the source frightened the GM staff.
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Damn right it should frighten the GM staff!!
See what you’ve been missing all these years?
What this is saying, in essence, is that the new Saab 9-5 is so good that Fritz Henderson wants to find a way to keep it in the stable. Selling to a competitor means that they lose it all together.
The article also seems to point to the possibility of pointing Saab towards Fiat, where at least GM can retain a stake in that new entity.
Personally, I think it’s a little conspiritorial. I don’t think GM are that worried about having the 9-5 in someone else’s hands. At Saab’s volumes, it would be the last thing worrying them.
But it is kinda nice to think of Saab leaving a worrying former parent behind.
——
There’s also this in the sidebar:
This determines the future of Saab
GM bankruptcy
Much talk to General Motors out of business May 31. Then the Saab’s reorganization is strong to support Saab further until a buyer places a bid for the American manager.
Fritz Henderson
Unless the General Motors remission of debts in the region of SEK 10 billion to Saab’s new owners, there is no way anyone can afford to buy. Henderson can determine whether Saab will go bankrupt.
Fiat bid
There is a bid of Saab from Chinese Geely – but Henderson refuses to sell. Instead, Fiat’s purchase of GM Europe to be a way for Saab to get away. But then expect severe cuts and the likely merger with another brand – such as Opel or Alfa Romeo.

Thanks Martin!

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