Friday Night Snippets – Saab production edition

I’ve heard from Sweden this week, some more information about Saab’s production schedule in the near term.
It seems they’ll commence production of Saab 9-5s for customer delivery in Week 18, with production ramping up to 39 cars per hour – apparently as high as Saab have ever gone – in Week 23.
The word from Sweden is that there’s a very healthy looking order book already, which is quite encouraging.
There was more talk in Trollhattan’s local newspaper this week about Saab hiring more people. This would be why.
And the increased production at Trollhattan and direct jobs it creates is one thing. The flow-on effect is another. Lear (who make seats for Saab) are also re-hiring 37 people.
Thanks to Justyn and H for the tips.
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Our student designer is saying his model is finished!
What about the Laser Red or Snow Silver paint????
SaabModellerFinished.jpg
Congratulations, fella. Looks fantastic and it’s been great to watch it happen.
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As if Jay Leno didn’t have enough rare fast cars.
He’s now snapped up one of just three Koenigsegg Trevitas in existence.
LenoTrevita.jpg
That might just be my favourite supercar of all time.
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Good place to open a Saab dealership?
From Tom M, photo taken in Ft Lauderdale, FL.
IMG_0060.jpg

AMS speak with Christian von Koenigsegg

The guys from Auto Motor and Sport recently sat down with Christian von Koenigsegg to talk about the Saab deal, what went wrong and what Koenigsegg are doing now.
I think it’s OK for me to say now that I shared a number of emails back and forth with CvK over several months after they pulled out of the Saab deal and I’m really pleased that a little of their story is coming out now. These guys did a monumental amount of work to put Saab in a good position and in my estimation, they weren’t taken seriously enough by a number of key players in the Saab sale drama.
Well done to AMS on the interview and my gratitude to Martin S for this fantastic translation.

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He layed the foundation
Fredrik Huldt had a talk with Christian von Koenigsegg about the Saab deal, what went wrong and why he is still the man who saved Saab.
After six months of intense negotiations with GM, the European Investment Bank EIB, the Swedish Government and the Chinese motor company BAIC, Christian von Koenigsegg was forced to give up his efforts to save Saab Automobile from bankrupcy on November 24th last year.
With the worse thriller in Swedish industrial history now seemingly concluded with Dutch Spyker Cars as the owner of Saab, we were, of course, curious as to what Christian had to say about it.
Ams: How does it feel retrospectivly?
Cvk: I’m happy all the energy and work we put into it came to something. Much of what we did layed the foundations for the Spyker deal.
Christian von KoenigseggAms: Do you believe in Saab today?
CvK: There are still very good chances. But the situation is much worse now. Had we been allowed to take over before the end of the year the factory wouldn’t have stopped and been closed down. We had a plan for 60,000 cars this year and this was a plan that was in the danger zone already in October. But the BAIC deal we facilitated had the effect that Saab got 1,4 billion (SEK). Suddenly there were funds. Old parts that they were basically going to throw away that we dug out of the boxes, an engine here, some old chassis stuff there… Maybe there are some Chinese who will want to buy, we thought. And we were right. We can say that we left 1,4 billion after us. That’s how I see it.
Ams: What do you think of Victor Muller as the captain of this damaged old boat?
CvK: In a way I think he’s a good captain. He’s very energetic and convincing. He’s a real PR-person and Spyker has always been a good PR-company. Their production facility is smaller than ours. They are listed in the stock market despite of that. They have produced a few more cars then we have, but to a third of the price. So turnover-wise they have always been below us. Saab has, of course, very good technical competence and a managment who wants to show that they can do the right thing. So maybe it’s great with this PR-aspect.
Ams: Koenigseggs so-called PR-coup and the rumours that you were underfinanced?
CvK: We were accused of a PR-coup but we are the opposite of a PR-carcompany. We focus ALL our time and enegry on technology. Working with free valves, patenting compressor- or catalyst systems, building our own engines, our own electrical systems. Everything is specially built. That’s where we put our money instead of buying parts that are pretty good but not so exciting.
Koenigsegg itself does not have huge financial muscle but B

Tuesday Snippets – Thankyou edition

I just wanted to post a quick but very sincere thankyou to everyone who contributed to the Support a Saab Blogger effort earlier today.
Your kindness and support is much appreciated, by both me and the dog 🙂
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I’m pleased to let you know that the forum software has now been loaded up on the interwebs. I’m currently battling my way through the setup of categories and the design. Hopefully it should be up and running soon.
Any suggestions for broad category areas would be welcome. It’s going to be your forum, after all.
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Look what else was making its way to Geneva yesterday…..
HirschSaab9-3forGeneva.jpg
That’s one of the display cars put together by Hirsch Performance and geex, it looks good.
And check out all the stuff that goes into making a fully Hirsched Saab. Cool.
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Speaking of Geneva, here are a few of the more interesting cars that’ll be showing there that don’t wear Saab badges:
Alfa Romeo Giulietta
It’s a non-secret around here that I also have a love affair with Alfa Romeo and this new Giulietta is an absolute stunner. The 8C Competizione styling suits the bigger body of the Giulietta much better than it does the MiTo.
2010-Alfa-Romeo-Giulietta-Image-02-800.jpg
I love the way it looks in white, but it’s an Alfa: Show me one in red, please. If Saab can build a 9-1 with even half as much horn then I’ll be a very happy camper.
It’s not all just about good looks, though. The Guili QV uses Alfa’s new MultiAir engine, bringing back the mystical 1750 moniker with a turbocharged engine that puts out 235hp and 340Nm of torque. Them’s Viggen numbers from an engine only 75% of the size, which shows you how far engine tech has come in recent years.

Koenigsegg Agera
I think I’ll always have an affection and appreciation for CvK’s work after his fling with Saab and I really hope the two companies can work together on some projects in the future.
Koenigsegg are showing their latest vehicle, the Agera, at the Geneva Motor Show.
koenigsegg_agera_f34_ns_30110_717.jpg
The Agera follows the lines of the original Koenigsegg CC and plans are that they will eventually build it alongside the CCX and the CCX-R. It’s part of the continual evolution of Koenigsegg design and features new tyres developed especially for the Agera in partnership with Michelin, a new adjustable ABS braking system, a world-leading traction control system as well as Koenigsegg’s new interior lighting system called ‘Ghostlight’.
Hit this link to see some animated video of the Agera in action. It’s worth it just for the exhaust note on start-up!!
Congratulations to Koenigsegg on another fine creation.

Another controversial DI.se article, feat. Joran Hagglund

There was a really poor article on DI.se over the weekend, which featured in comments but didn’t get any oxygen here on the front page.

DI.se and their sister news service in print really seem to find some joy in sticking the boot into Saab, looking to turn almost anything into a story that doesn’t show them in a negative light.

I’d be surprised if they didn’t have hidden fart-o-meters in certain pairs of executive pants just so they paint even the slightest details in a poor light.

This latest effort features a conversation with Joran Hagglund. It doesn’t always make for easy reading, but you’ve got to see it in the context of the election that’s coming up and the attacks being rained down on the Swedish government by the opposition. We’re now in political mode so everything has to be viewed through that particular prism.

There’s a few people who probably deserve a right of reply to this and they’re welcome to it here, though they might choose bigger media to do so.

My thanks to the semi-anonymous goofball who translated this from the print edition into comments earlier.

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State secretary Jöran Hägglund has been hailed as the saviour of Saab.

In a candid DI interview, he reveals his wish for Chinese help in the relaunch of Saab, and is unable to conceal his disappointment at the end result.

He condemns Saab’s reconstruction process, criticizes Koenigsegg’s lies and calls the latest bidding round a joke with unserious players.

Now he demands that Spyker owner Victor Muller accounts for the financiers behind the purchase.

“Pity that it didn’t work out with the Chinese”

Jöran Hägglund, state secretary for Minister of Industry Maud Olofsson, has during the past year been the government’s coordinator of the work with the automotive crisis. The situation turned urgent in February last year, when Saab was put into reconstruction and lawyer Guy Lofalk was set to lead the work of finding a new owner for the company.
“It was a strange process to have some sort of public bidding, and it brought both high and low in for a look. It was like scrambling through the Yellow Pages for automotive companies and inviting them in. And then they still ended up with three. One could wonder why those particular three and no others were chosen. Both Beijing Auto (the BAIC industrial group which was later to buy used Saab tools from GM, editor’s note) and Geely were interested.”

Was it a pity that it didn’t work out with the Chinese?

“Considering that China is the big car market now, and will be for the foreseeable future, it was a pity. It’s no longer the most important to be biggest in the American market, instead it’s about being biggest on the Chinese one. The prerequisite for succeeding there is to be in among the leading, bigger players, and in that context Beijing Auto and Geely are interesting leads.”

And a more interesting lead than Koenigsegg?

“Yes, I think so. Koenigsegg and Spyker have in common that enthusiasts are behind them, and that doesn’t have to be bad, but I think that with the backing that they (BAIC and Geely) have from the Chinese state and Chinese banks, that would be a more long-term foundation.”

How did you react to GM’s declaration of intent to sell Saab to Koenigsegg?

“We were a bit surprised. We met a large number of interested parties, and Koenigsegg was a group that had come together rather quickly. None of the people in Koenigsegg had much experience in the car industry, or in negotiations. After they had bailed out, when we had a follow-up meeting with them, they told us that far into the negotiations, they had missed some important components. So in spite of all the deals, they didn’t have a whole car.”

How were you affected by the question marks about the financing and the role of American Mark Bishop?

“That was negative. We had a big controversy with the Koenigsegg gang along the way. They gave us a false picture of why Mark Bishop bailed out. We figured it out another way, confronted them and explained that if they were to keep talking to us, they should be sincere. That made us lose speed. They didn’t give truthful answers to direct questions. We don’t ask that they should tell the whole truth, but you shouldn’t lie in the face of a negotiating partner.”

Business man with a dubious background

The row concerned that Mark Bishop, a shy business man with a dubious background, was claimed to have left Koenigsegg as an owner and main financier of the Saab bid, but was later, in early fall, found to still be in the game, since he was trying to sell off his Koenigsegg shares.

But Jöran Hägglund stresses that Christian von Koenigsegg wasn’t guilty of the lies, and he doesn’t put the whole blame for the breakdown in the negotiations at the end of November, when Koenigsegg withdrew, on the Ă„ngelholm sports car maker.
“Saab wasn’t a complete company. Saab was basically a cost centre within GM, where costs for research and overhead were dumped. To really find that which was Saab has actually been going on until November, December. So it wasn’t all that easy for Koenigsegg to buy something which wasn’t a finished company.”

What have GM said about the Koenigsegg negotiations now afterwards?

“GM themselves say that they were ‘miles, miles away’ from being completed. There were a great many contracts and details that took time, since Augie Fabela (American financier with a background in Russian telecom company Vimpelcom) who ran the negotiations didn’t have any experience from the automotive business.

After Koenigsegg withdrew, a new process was started with old and new bidders. How do you view that today?

“It was a big joke. We did a background check on one guy who had really been into us. It turned out his company didn’t exist, and he had gone personally bankrupt in October. When we confronted him, he stated that that was true, but that he had forgotten to mention it.”

Were there any of the interested parties that you took to in the December process?

Especially Beijing Auto. What I know is that Beijing Auto are still very interested in a cooperation with Saab, and I think that can turn out very well. We’ve said so to the Saab management and to Spyker.”

How did you regard GM’s decision to wind down Saab?

“I fully respected it, but it became ambiguous when in the same breath, they said that they would look at any bid that came up. I think that from December until now, they crassly started to calculate what a wind-down would cost, adjusted the price to that and wanted to come to a quick conclusion.”

Meticulous vetting of Muller

In the third bidding process for Saab, Spyker were back in, but so too were various consortia such as Luxembourg-based Genii Capital, with Swedish spokesperson Lars Carlström, and a Swedish group led by former vice Prime Minister Jan Nygren. However, that a former political heavyweight, who had also been vice CEO of the Saab defence group, got involved in the process didn’t create any pressure on the Industry Department.
“Not other than that we’ve spent considerable time listening to him and his gang and other interested parties, since we felt that we should at least hear what they had to show for themselves.”

How did Nygren and the other bidders compare to Spyker?

“There’s no comparison. When the bids were to be submitted to GM on January 7, Spyker had a stack of deals and highlighted changes. The Nygren gang had a two-page document, as did Genii and Carlström. Genii’s press release was longer than the bid.”

Was there any serious financing behind it?

“No.”

Were you alarmed by Muller?

“All the things that turned up, we knew about. We had vetted him meticulously and confronted him. People can have dealings with tax authorities, that happens to Swedish business leaders too, but you have to put it into proportion.”

Spyker have a history of great hopes and weak sales. How did you view that?

“People must be allowed to do business, good or bad. But of course we noted that it would have been better if there had been a big strong industrial player. But there wasn’t one, and then you have to decide on the ones that are available.”

You have handed the question about financiers of the Saab deal on to Victor Muller, but he hasn’t answered. How do you feel about that?

“There could be reasons for that, but I think it’s up to him to disclose them.”

Do you feel that he should give an answer?

“Yes, I do.”

Are you aware of the financiers?

“We have been given an accounting, yes.”

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Swade here…..

That right there was the most important question of the bunch. The Swedish government were entitled to demand answers, and they received them and approved them. Same with GM.

You don’t need to tell your neighbor what you do for a living, but if you go for a loan, you have to tell your bank manager.

If Victor Muller is in a position where he has to disclose those arrangements, then I’m quite sure he will. If they’re private as the investors wish to stay anonymous, then that’s their business and as long as they’re legally entitled to anonymity, any demands from the press are just posturing. Nothing more.

Back to the article…..

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Can you see any reasons why he doesn’t publicly reveal them?

“Not really. Unless there are agreements that mean it’s too soon for various interested parties to come forward. Only he can answer that. He’s the only one who has that picture.”

Are you sure that the Russian Antonov family are out of the picture?

“They are out as part owners.”

Are they out as lenders?

“He’ll have to account for that himself. We can’t do the puzzle through all links backwards, what all the constructions look like, but it has been important to us and to GM that they aren’t in as part owners.”

Political mudslinging

The Social Democrats have pointed out that the then Prime Minister Göran Persson traveled to Detroit and GM the last time Saab was threatened, and have claimed that Sweden has been represented at too low a level with a state secretary. In connection with Jöran Hägglund’s latest trip to Detroit, critics scoffed that he didn’t get to meet the top GM management. Out of respect for the negotiations, Jöran Hägglund kept quiet and didn’t reveal that he actually did meet GM boss Ed Whitacre.

“I think there has been a great deal of political mudslinging in Sweden. It has also been argued that the Germans sent Angela Merkel, and I can only note that that wasn’t particularly successful. Our conclusion has been that it’s at least as important to have established contacts, a trust and that the opposite party knows what it is you want. We’ve developed that with GM without it having been the Prime Minister who made the calls.”

Have GM asked for higher-level representation from Sweden?

“No.”

Do you believe in a happy ending for Volvo as well, in the Geely negotiations?

“It’s too soon to tell. Everything can happen in a negotiation. But if they go all the way with Geely, I think it can turn out very well. I’m strengthened in that opinion after having been to China and met representatives of the government.”

SvD speculate on a joint bid between Spyker and Genii

I know a few of you have mentioned this in comments already and it would be nice to believe that it could happen – a joint bid that cold finally push the deal over the line.
Svenska Dagbladet has taken the idea a step further and asked the question of both Lars Carlstrom (Genii) and Victor Muller (Spyker). Much like political reporting, the refusal to rule it out completely has led to a story suggesting that it could happen.

There is a possible scenario that the Genii Capital Group and Spyker Cars putting a joint bid for Saab. Last Tuesday tolerate both speculators at. “Our genuine interest in Saab has brought us together,” said Genii Capitals spokesman Lars Carlström.

If the ongoing issue for GM is not about price (“you can buy it for a dollar”: Nick Reilly) but about sustainability, then this would make a truckload of sense.
Bear in mind, however, that these guys are all entrepreneurs and they all got into this transaction with a business plan in mind. Halve that business plan and it’s probably not so attractive, especially with the complexity of joining two organisations together who aren’t used to working with one another.
I’m not saying it’s a bad idea, but SvD are at risk of taking two non-denials and turning them into a “yes” in the public eye.
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One reader here, Ulf W, went to the trouble of sketching out a view of a possible grouping, throwing Koenigsegg in for good measure (which would be a definite bonus if it happened) due to the technical developments they’re working on, which could have possible racing applications.
Click.
SpykerGenii.jpg
Like I said, I’m hesitant to put too much stock in this. At the moment it’s just a couple of things to which the players have responded “never say never”.
But hope remains.
My main hope right now is that GM stop this waiting game and get something done.

Saab sale/saga FAQ

Someone mentioned this idea in comments and I thought it was a good one, so here’s a quick reference you can use if you’re looking to explain an aspect of Saab’s situation to someone.
This is not an official FAQ, of course, but hopefully it should give a pretty decent idea as to what’s going on.
The post will grow as I add more FAQ’s and then publish.
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Did Saab go bankrupt this year?
Saab Automobile voluntarily entered a Swedish process similar to Chapter 11 bankruptcy protection in the US, whereby they were protected from creditors claims whilst they reorganised their business. This process lasted six months and Saab are no longer participating in that process.
Has Saab been sold to a Chinese company?
No, they haven’t. Saab recently sold a combination of IP and tooling for older Saab 9-3 and 9-5 vehicles to Beijing automotive. Saab will also supply engineers to Beijing on a continuous basis to help them implement the technology they’ve bought. The transaction gives them a cash injection now, as well as the start of a relationship in the biggest automotive market in the world.
What’s going to happen to my warranty if Saab are sold from GM?
General Motors are legally bound to honor the warranties of vehicles they sell. This will continue after Saab are sold. The mechanics of how that will work are as-yet unknown, but your vehicle will still be covered by warranty. Same if Saab isn’t sold, but are liquidated instead.
What, they could be liquidated? When?
It’s possible. General Motors has set a date of December 31, 2009, by which time they will make a decision to either sell Saab or begin “an orderly wind down” of the operations.
So Saab have to have a new owner before January 1, 2010?
Not necessarily a new owner, but GM have promised that they will make a decision by that time. If GM decide to sell Saab then they will keep Saab operational until that sale can be closed. If GM decide that a sale is not possible, they will begin wind-down at the start of 2010.
What about parts?
Like warranties, GM are legally obliged to continue parts supply for a certain period of time after a car is made (seven years, perhaps?).
So why are GM selling Saab?
GM made a decision to either sell or close four car brands when they received a taxpayer bailout from the US government earlier this year. Saab were one of those brands, along with Pontiac, Saturn and Hummer.
Many people consider that Saab is not profitable and rarely have been under GM’s ownership. They use that as the reason GM are selling Saab.
Is this true? Have Saab been a perpetual loss maker for GM?
With an organisation like GM, it’s very difficult to tell which brands have been profitable because of corporate accounting practices. There are years when Saab definitely would have made a loss, but the popular claim that Saab have been profitable only once under GM’s ownership seem a bit much.
With GM owning so many brands in so many places, it’s possible for them to employ some tricky accounting practices that shift losses from one place to another. With Sweden’s costly tax system, it’s not difficult to see the motive for presenting Saab with a loss each year.
Saab had one of its best sales years back in 2007, selling around 130,000 cars. It’s hard to see them not being profitable at that sales rate.
So who’s going to buy Saab?
The current favourite is a group called Spyker. This group comprises the Spycar car company themselves, along with the Convers Bank (who are major shareholders in Spyker). Spyker are a Dutch car company that make exotic sports cars. Convers Bank is a financial group owned by a Russian family, the Antonovs.
Weren’t they being sold to another exotic carmaker?
GM were originally negotiating with the Koenigsegg Group, based around the carmaker Koenigsegg, who make $1mil-plus supercars at their base in Angelholm, Sweden.
The Koenigsegg Group pulled out of the transaction on November 24, citing timing issues as the reason for their withdrawal. Basically, they set themselves some goals and all the parties involved couldn’t meet those goals in a timely manner.
If a big company like GM couldn’t afford to keep Saab, how will they survive on their own?
GM never really invested in Saab or developed their model range in the manner they should have, that’s why they never saw great financial returns from Saab.
Saab have a business plan that’s been developed this year, has been reviewed by the European Investment Bank and the Swedish National Debt Office, as well as accounting firm KPMG. All have said that it is viable, though not without risk (every business involves risk).
That plan involves new models in the next 12-18 months, as well as a plan to develop new models in partnership with various contractors and companies. Whilst GM offered cheaper parts due to bulk purchasing, those parts didn’t help Saab like they helped a volume car like a basic Chevrolet. Saab will now be free to negotiate designs with contractors of their choice, as well as determine price.
What are the new models?
Saab released the new Saab 9-3x, a rugged styled version of it’s 9-3 wagon, earlier this year.
Coming soon is the Saab 9-5 saloon, an all new large flagship vehicle. Following that will be the 9-5 wagon and the Saab 9-4x SUV.
Will these all be built in Sweden?
Part of Saab’s business plan involves increasing production in Sweden. The Saab 9-3 convertible will be built in Trollhattan, having been built by Magna Steyr in Austria for the last few years. The new Saab 9-5 was going to be built in Germany, but tooling is being installed in Trollhattan for this vehicle, too.
The Saab 9-4x will be built by General Motors under contract at their Ramos Arizpe plant in Mexico, alongside the sister vehicle, the Cadillac SRX.
Will they be designed in Sweden?
Saab have moved their design facility from the GM Europe Design Center in Russelsheim, Germany, back to Sweden.

CvKoenigsegg: We are still interested in Saab

Auto Motor and Sport have conducted an interview with Christian von Koenigsegg about their withdrawal from the Saab purchase and their thoughts on where things stand right now.
All you Swedes should go here to read it in your native tongue. For those English speakers out there, here’s the Googletrans:
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AMS: Why did you skip out of the Saab deal?
Christian: It was not that we do not believe in Saab, but the timing worked against the whole affair. In the business plan we originally counted on a purchase by the end of September. When we at the beginning of November was quite clear that a closure date was impossible to predict, we must think about the whole thing would work. When we are at the end of November, still did not know when the deal could go through the whole thing became untenable.
AMS: How much has the delay worsened the business plan?
Christian: As I see it, it is about approximately one billion in increased costs, because Saab has been unable to ramp up production before 2010 like the business plan advocates. When production was delayed it shifted the entire business plan. We look to the billion must come from somewhere, we might be interested in taking part of it, but also other parties who have an interest in Saab’s survival must also help.
AMS: How willing are Koenigsegg Group to take a financial risk?

Read more

Bloomberg: Saab likely to win EU approval

The guys at Koenigsegg Group must be banging their heads on doors seeing all this effort and approval coming together now. Their announcement to withdraw from the Saab purchase, whilst a hard thing to swallow, should rightly be remembered as the catalyst that got a Saab deal done.
From Bloomberg:

Saab Automobile AB is likely to win European Commission approval for a 400 million-euro ($590 million) loan regarded as vital to any sale of the General Motors Co. unit, a senior Swedish government official said.
The commission will rule whether a Swedish guarantee for the European Investment Bank financing amounts to improper aid. Signs appear positive, said Johnny Kjellstroem, who is negotiating the case with the European Union’s regulatory arm.
“That piece of the puzzle should be completed pretty soon,” Kjellstroem, a deputy director at the Ministry of Enterprise, Energy and Communication, said in a phone interview. It’s possible a decision will be reached this year, he said.

Memo to the EU: before Christmas would be even better.
That end of year date is going to be crucial because it’s dollars-to-donuts that any buyer – OK, let’s say Spyker – will want that EIB loan included in the deal. So that approval has got to come before December 31 and the earlier the better.
Eric Geers is thinking the same thing:

“Everyone knows that this month is decision time,” he said. “I can only guess, but I can imagine it will happen fast, probably before Christmas.”

This can’t come soon enough.

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