It’s Renco vs Fiat for ownership of Saab – maybe

Some time soon, Saab will announce who their new owner is.
In the past on this site, I’ve made very-well-educated guesses as to who’s who in this drama and if the final three aren’t who I’ve proposed, I’m still promising that nudie run outside GT.se’s offices (as long as their writer, Jan-Erik Berggren, promises the same if he’s wrong).
I’m making not-so-well-educated guesses in this post, but I still feel very confident in my predictions.
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FIAT
If FIAT are still in the game – and Maud Olofsson’s saying they are – then it’s because someone is happy to circumvent the proper process and let them through the back door.
Let me reiterate again – FIAT were not one of the original bidders and are not one of the official final three. But that doesn’t seem to mean that the door is shut to them.
And nor should it be, IMHO.
I was opposed – and still am – to the idea of Saab being brought into a huge conglomerate with Opel still in the fold. They’ve been there with GM and they don’t need to go there again.
But it looks like FIAT are going to miss out on Opel. And that opens a door for Fiat and Saab in my mind. There are a number of people at Saab that I’ve spoken with in the last few weeks – and a number of Swedes outside of Saab – who are in favour of a takeover by Opel FIAT.
The Italians and the Swedes seem to work well together, for starters, and Saab seem to feel that they’ve got something substantial to contribute to Fiat.
Perhaps Fiat leaves a better taste in the political mouths of the Swedes, too, which brings us to….
Renco
It’s been all quiet on the Renco front. But I have a feeling that the PR crew at Saab are working overtime trying to figure out how they’re going to sell Renco to the general public.
I’ll go on the record here and now. Out of the three official bidders that I believe are in the running for Saab – Renco, Koenigsegg and BAIC – I think Renco is the most likely to win the day.
I’ve heard rumours that Ira Rennert may have lost a truckload of cash when Wall St rogue Bernie Madoff went under, but he’s still well connected and said to have a personal wealth of as much as $6 billion.
He’s well connected, should be well funded, and familiar with the suits at GM. What he wants with Saab is unknown, but according to Saab all three bidders have seen Saab’s business plan, have committed to it and have proven they’ve got the funding to carry out what they’ve committed to.
Some have wondered whether Renco are really involved given that the Greens in Sweden reviewed the contenders and gave their thumbs up. Folks – it says more about politicians and marketing than anyone else and no-one should be surprised by a politician making the best of a photo opportunity.
I’ll place my bet on Renco winning the prize. I may not like it, but I think that’s the way things will go.
We’ll see in a few weeks, I guess.
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The others.
I get the increasing feeling that whilst they’re probably the most cashed up of the lot, the Chinese bidders are out of this race. Whether it’s reluctance on their part after seeing an opportunity for a bigger fish in Opel, or reluctance on the part of GM or the Swedish government, or both, I think they’re out of this race.
Whispers are coming down the lines that Koenigsegg weren’t as well funded as the others, which may be a big obstacle.
You’ve all seen the Saab marketing posters where they mention a 9-4x and a 9-5 and maybe a smaller Saab coming down the line….. I think that the bidders who could see the value in planning for a smaller Saab and made some inclusion of this in their plans for Saab were probably better received than others.
Just my 0.02c
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Le Figaro are claiming that Fiat are one of “the three.”
GT.se now say that Ripplewood, who were until recently a bidder for Opel via their spinoff company, RHJ, are one of “the three” and the likely winner.
Both incorrect. Nudie runs.

Pollhattan Saab and Make your own news …..Snippets

OK, it’s time to try that Saab ownership poll once again.
The options are the same, except I’m just looking for first preferences here. Who do you want as #1.
GRRRRRRRRRRR – It seems any poll I try ends up in an IE abort. Freaking software giving me the irrits!!!!!
Hopefully this one will work OK.
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I am away with work again, and pretty remote this time, so I’m not going to be able to access news as easily as usual.
I’m not expecting anything big until mid-week, when The US government might push GM a little early into bankruptcy proceedings.
If there’s anything big happening, please keep each other informed in comments.
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I had my first episode of carsickness in years today. And I was driving!!
Mount Arrowsmith is the longest rally stage in Targa Tasmania and as I was driving that road today, I thought I’d give it a burst. A beautiful road, by the way. You should come and drive it.
My problem was that I’d eaten something that wasn’t agreeing with me, so all the twists and turns, whilst fun, left me a little green around the gills.
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There’s some talk coming from Djup Strupe to the effect that GM Europe might be stalling the Saab sale process a little. The word is that Deutsche Bank are actually having a hard time getting GME on the phone to make a decision of any consequence.
Maybe the Opel deal has them all tied up. I hope we still get a decision soon, even if it’s not announced, just to know that it’s been made will start the closure process.
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I’ve been thinking about the Koenigsegg bid some more and you know….I’m reeally getting seduced by it.
I can barely see a downside.
Yes, scale is an issue, but Saab management will still be in place and are used to running the Saab site. One must assume that the pockets Koenigsegg are fronting for are deep enough.
The marketing side is a HUGE upside. It’s not that Saabs and K-Seggs would be in the same showrooms together, because they won’t.
It’s just the association.
You know how motoring journos immediately write about the association, which in GM terms means bad things like badge engineering, etc. Here, the association is nothing but cool, totally Swedish and desireable to anyone with a pulse.
The only possible downside I can see is a systems issue to do with ordering, parts, communications, dealers, etc. Saab have been integrated into the GM system for some time, so setting up a new one could be a drag.
But I like the idea more and more.

TTELA commentary on where Saab are now

Magnus Nordberg is the man on the ground in Trollhattan and he’s been doing excellent work covering the situation with Saab since this whole story began back in February.
He’s just published an editorial at TTELA as a lead in to what might be the eve of Saab’s decision, which will hopefully be made (if not announced) next week.
Here’s a Googletrans of the article.
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Who will Saab choose next week?
The moment of truth is approaching. As early as next week Saab might select the favorite among its three remaining ownership candidates.
TTELA suspects the choice is between an American billionaire, a sports car manufacturer and a Chinese company. And that’s if Fiat can really be discounted.
When Saab went into reorganization on February 20, there were not many who gave the company a good chance to survive. Three months later the situation is much brighter.
27 stakeholders heard about Saab. Since then, these stakeholders have visited Saab, and Saab with Deutsche Bank’s help, have narrowed the to three. Most speculations were about Geely. The privately-owned Chinese company were among the ten candidates who were invited to Trollhättan.
But Geely is, according to data from several sources, no longer in the picture. Another company involved in recent discussion is the Canadian subcontractor Magna. But IF Metall spokesman, Paul Åkerlund has said to TTELA that Magna’s interest all this time was only around Opel – not Saab.
With these two removed from the list, it points to The Renco Group, Koenigsegg and a Chinese manufacturer that remains.
Behind the Renco Group is one of America’s richest people – billionaire Ira Rennert.
Behind the sports car manufacturer Koenigseggs interest is the primary owner, the Norwegian Bård Eker. He has to Norwegian site e24.no said that “it would be a dream to buy Saab.”
We also know from the SAAB-staff that the factory had a visit from a Chinese company, in addition to Geely. But it is unclear who it is.
Do we ignore Fiat? Fiat was simply not included in the sales process Saab runs. By contrast, Fiat has gone to GM and said they want to take over GM Europe.
The latest news is that Saab is not included in the bid Fiat made for Opel on Wednesday. But in the automotive industry anything can happen so to fully deduct Fiat may be premature.
Fiat is the favorite solution among many industry experts. And to some, it could be a long-term stable and good solution, but there are risks that have not be spoken about enough.
Why is everyone so sure that the new Fiat Group would be a success if the boss Sergio Marchionne received through their plans?
To bake together with Chrysler Fiat, Opel and Saab is an extreme challenge, in everything from product planning to the internal fight that teaches about the decision on employment.
If Marchionne could succeed in building a large group, he will be remembered as the genius who understood [unsure of the translation here, but I think “to strike when the iron is hot” makes sense]
But if he fails … yes, there is risk for Saab to be with a weak owner. Fiat’s economy is, from what I understand, really nothing to boast.
In addition to that, Saab would be back as the little brother. In GM they were on the back burner. Would it be the same with Fiat?
And what does it mean for employment in Trollhättan? The tools to the next Saab 9-5 is in Rüsselsheim and would remain there for Saab and Opel ended up in the same nest.
So while Fiat has an upside and a downside.
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Stakeholders:
The Renco Group
U.S. investment company with billionaire Ira Rennert, 74, in the lead role. Has its headquarters in New York and owns companies in several industries. Renco Group is linked to the motor vehicle via AM General, which manufactures military jeep Humvee and Hummer.
For: Would be a very strong capital owners. It is difficult to see that Renco would have short-or long-term plans to move operations from Trollhättan.
Against: Renco Group and Ira Rennert has (or had) a bad environmental reputation through some of their companies. The story also contains a bankruptcy which is considered doubtful.

Koenigsegg
Sports car manufacturers, since a few years back has series of small scale. Is based in Angelholm. Norwegian Bård Eker is a principal owner in Koenigsegg now also want to take over Saab.
For: marketing dream for Saab brand. A Scandinavian owners that makes sports cars in a former air hangar. It includes almost all the elements that Saab wants to be associated with.
Against: Is this the strong owners Saab need? Manufacturing cars is one thing, the mass production of them is another.

Chinese manufacturers
TTELA think that a Chinese manufacturer is still in the picture. But it is unclear which.
For: Can open the door to the massive Chinese market.
Against: There are many suspicions against the Chinese owners, as they could move operations east. But the biggest question mark is whether GM is ready to share its technology with the Chinese, and if the state is prepared to provide loan guarantees?

Thoughts on Koenigsegg owning Saab

This popped up in comments in the last hour.
Many have worried about a Koenigsegg bid for Saab because of questions relating to their experience in managing a larger volume producer.
Johan, our comment author, takes a sober yet optimistic look at this possibility. I thought it was superbly presented and tend to agree on many fronts. I’ve got to say, I’m warming more and more to the Koenigsegg possibility.
Thanks Johan.

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Koenigsegg as an owner all comes down to who is financing the affair. I hardly think Eker himself has enough money to be able to pull this of and Christian Von Koenigsegg certainly doesn’t have the money, he can’t even afford to buy one of his own supercars (his claim). So for Koenigsegg to be able to pull this off they need someone financially strong to back them up.
To have a larger company as a daughter company is not a problem, I believe there was a similar situation with Saab-Scania in the past where on paper Saab was the owner of Scania. But Koenigsegg doesn’t have to be structured as the owner of Saab, Saab can merge with Koenigsegg and make Koenigsegg a part of Saab while Koenigsegg shareholders get shares in the new company instead. There are many possible solutions here, so that isn’t really an issue.
In any case, such a deal offers several interresting possebilities. To beging with it would give Koenigsegg, through Saab, a new distribution chain and aftersales. It would also give Koenigsegg the facilities it need to produce a cheaper entry level model. Such a model could be based on an aluminum chassi from a supplier such as Alcoa (just like Ferrari does it), and could be assembled in the Trollhättan plant. A cheaper version of that car could be the basis of a Saab Aero-X, using Saabs current V6 as the base engine (naturally twin turbocharged and direct injected). This would increase the volume and distribute the cost of running a factory with a capacity of about 170k cars so that the cost per car decrease.
Many parts on the Koenigsegg cars could also be sourced from Saab, providing a new income for Saab. Saab would also, very importantly, get a larger freedom in what they can do while their lifetime licenses of GM platforms and technology gives them the technology required to start their new independant company. On the longer term they can seek cooperations with other manufacturers to increase volumes and share development costs. Many required parts and system can also be sourced from suppliers which usually have many solution on the shelves these days.
For Saab I think the main advantage with Koenigsegg as a owner is that Saab can operate freely and react quickly, there isn’t some big foreign boss that only cares about big volumes you need to convince before you can start work. Koenigsegg as an owner is also great from a PR perspective, quite the opposite to Renco Group. The question is how financially strong a new Koenigsegg-Saab company would be, and as a said before, it all comes down to who is backing them up financially.

Survivor Saab – time to vote someone off the island?

SurvivorSaab.jpg
Saab’s court filing mentioned that they are now in a position where they are talking closely with just three bidders out of the initial group of 27 who showed interest in the company.
FIAT are outside this group as they were never one of the original 27. They are trying to include Saab into a deal for all of GM Europe, but Saab’s process carries on regardless, which indicates to me that Saab’s inclusion in a FIAT deal is a remote possibility, at best.
Previous discussions here at TS SU have centered on four other possibilities:

  • The Renco Group
  • Magna International
  • Koenigsegg
  • An unknown Chinese bidder.

With only three parties left, as per Saab’s own court filing, it’s clear that one of these has to go.
This is not a matter of who would you like to see leave the island. That decision’s already been made by Saab’s own tribal council. This post is all about figuring out who’s been voted off.
My theory won’t be a popular one with readers here, but here I go…..
Magna has been voted off the island.
Shock horror! Well, sort of, but not really.
As I’ve mentioned before, I am quite positive that Renco are still in the game at this point. I’d stake my house on it.
The Chinese, although unknown at this point, have been talked about in very strong terms in a few Swedish press articles. They’re currently leading the odds at Ladbrokes, too.
Koenigsegg could be the ones to leave, but I’m not picking them.
Why?
I’ve picked Magna as the ones to have left the island because I’m not convinced they were ever on the island to begin with.
In terms of news coverage, Magna is only mentioned as a company looking to get hold of Opel. The only news service to have talked about them in terms of buying Saab is Auto Motor and Sport, and with all due respect to my friends there, I’m not yet convinced their source was correct.
And even if it was correct, would Magna be likely to proceed further in their Saab negotiations when Deutsche Bank know that they’re gunning for Opel as well. It just throws too many optional scenarios into play.
“OK, this is our bid for Saab if we fail at our bid for Opel……and this is our bid for Saab if we’re successful with Opel. One will involve the Russians and one will be just us…….Yeah, I know we’re in hard discussions about moving assembly of the convertible from Graz, but let’s put that aside for a moment……”
I just don’t see this happening, and I haven’t seen Magna say they’re interested in Saab at all.
That’s my 2 cents. You know where you can have yours….

A look at one of Saab’s potential suitors: Koenigsegg

A few weeks ago I took a look over the record of The Renco Group – one of the parties I firmly believe are one of the final three bidders for Saab.
I thought it might be fun to take a look at one of the companies that’s been mentioned lots of times without being ruled out once – Koenigsegg.
Pretender or player? Let’s take a look.
The man behind the name is Christian Von Koenigsegg and if there’s a story behind the company – as there is with every company like this – it’s the story of him getting the bug at age five from watching an animated movie and dreaming about building his own car. Several business ventures later, at the tender age of 22, he started what became the supercar company that bears his name.
The first Koenigsegg prototype was completed in 1996 and the first sale to a paying customer was made in 2002. What was rather remarkable about this car, the CC8S, was that it was fully homologated and crash tested for the European market, which is a very rigorous program for such a small company to complete.
Not long after that first sale, Koenigsegg’s headquarters caught fire – a faulty dishwasher is believed to be the culprit – and the company was moved to it’s present base, the former F10 Air Force Base at the outskirts of Ängelholm.
The company has continued to set new, high standards. They briefly held the world production car speed record (until the Bugatti Veyron came along – and some believe they’d get it back if they got access to the same track Bugatti used to set it) and have released several new evolutions of their CC-cars.
The latest is the CCXR, with over 1,000hp produced from it’s twin supercharged V8 engine that runs on E85 or petrol. I guess you could call it the CCX BioPower if you like. Perhaps BioPOWER!!!!!! would be more appropriate.
Speaking of appropriate, we’re long overdue for an image, eh?
KSeggCCXR.jpg
So there you have it: a grassroots company started by a boy with a dream, which turns out to be a screaming hot reality involving some of the sexiest supercars on the planet.
Too good to be true?
Maybe. Maybe not.
Koenigsegg has had it’s share of troubles along the way. There was the fire, of course, and there was also some rumours of financial trouble back in 2007. Apparently a Norwegian customer got all browned off when his new K-Segg nosedived a week after purchase. No-one’s really sure what happened there, but he threatened court action against K-Segg’s Norwegian operations and the whole affair was settled quietly.
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We can’t cover Koenigsegg without covering the man who owns the single biggest share in the company today. He’s been in the news lately, so it’s only fair you know a little more about him. He’s from Norway and his name is Bård Eker.
In 2005 he took up a 45% stake in Koenigsegg, a company that he’d worked closely with in design terms for some time. Eker Design actually did the Koenigsegg Quant, a four-door solar electric vehicle that showed in Geneva this year.
Eker is the man, the face and the name behind Eker Design. And Hydrolift boats. The design of Stokke strollers. And Projection Design (high performance projectors!). Up until a few years ago he was also the guy behind the Spirit of Norway, a boat racing team that raced Hydrolift boats, sponsored by Koenigsegg.
And now he wants to add Saab to that list. And it sounds like he really wants to add Saab to that list. A few weeks ago he told Norway’s e24 news service that buying Saab would be like a dream.
In a worrying development, however, he also opined that perhaps Saab has too many engineers, saying that they have 1200 at Saab but they have only 10 at Koenigsegg and they make one of the world’s fastest cars. The latest figure I’ve seen says 900 engineers for Saab and 7 for Koenigsegg, but why split hairs?
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The emergence of Bård Eker has put the spotlight on Koenigsegg a little more as part of this process.
Koenigsegg vehicles are designed using F1 race car principles. Their cars feature over 300 hand-made carbon fibre parts as well as other milled pieces made by automotive artisans from small companies, the majority of which are in Sweden. This is all admirable stuff and one just has to look at a Koenigsegg vehicle to experience an unnatural gravitational pull. They are absolutely, undeniably awesome.
Furthermore, Koenigsegg as an owner of Saab would be a Saab marketing person’s wet dream come true. They build their cars – up to just seven at a time – in an old Swedish aircraft facility. It’d be like Saab coming home. There is no downside whatsoever from a promotional point of view. None.
But questions linger……
Can a boutique supercar owner manage a mass producer?
Will they have adequate funding to develop the kind of vehicles that Saab needs to make in the future?
Was Eker giving a glimpse of the future with his “number of engineers” comment?
Will Saab go from being under-resourced due to a parent playing favourites to being under-resourced because the parent is smaller than the child?
Will they rely too much on debt?
There’s no doubt that Koenigsegg would make an attractive owner for Saab. But do they have the resources to be the right owner?
That’s the question.

News sources name some interesting suitors for Saab

There are reports in from both Dagens Industri and TTELA naming some interesting names in the chase for Saab.
I’ve covered bits of the Dagens report via Reuters earlier, but I’ll cover it again here to tie it all up here in one post so the conversation is concentrated in one place.
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Latest news indicates that Deutsche Bank are asking around 10 of the initial 27 suitors who signed confidentiality agreements to discuss their intentions for the company, which will go some way to whittling down this group to the four or five who will be asked to submit a bid for Saab.
We’re getting to the pointy end, people. Saab’s initial reorganisation period ends on May 20 (or is it May 19??) and I’m sure all parties would like to get these preliminaries tied away prior to asking for another three-month extension.
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So, the suitors and the way they’re described.
Geely – have previously denied any interest but were reported to be in Sweden getting the grand tour in the last few weeks.
Koenigsegg – the one we’re all hoping for, though it may be for all the wrong reasons. Romantically, they must be the favourite.
US investors – their identities are unknown, but DI report that there’s some US money sniffing around, and they’re big players. More than one of them, apparently.
Both TTELA and DI note that Chinese company Chery have received state approval to go forth and multiply. Chery are China’s biggest privately owned car company.
TTELA also mention BMW and Hyundai as possibilities. Hyundai I can see, BMW I can’t. I just don’t see why they’d have the need to stray from their formula with something in a similar market space.
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Let’s not forget the potential suitor that they didn’t mention in those articles – the Norwegians and Think! I wrote about them last week:
Norwegian State is one of the speculators who have been in and looked at Trollhättan Saab, writes the newspaper GT today.

According to a source within GM, representatives of the Norwegian Government have been in Trollhättan and looked at the factory. It should, according to data, act on a wager on a Swedish built hybrid electric with Norwegian origin.

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Geely and Chery would have to be considered outsiders. One thing a potential investor will have to do is obtain loan guarantees from the Swedish government. There is a train of thought in both articles that the Swedes would be concerned about both the loss of jobs to China, and the loss of technological know-how to China.
The marraige of two Swedish companies, one of whom is a 62-year-old Swedish sporting and design icon and the other being an upstart supercar maker working out of an aircraft hangar. Reportedly, Koenigsegg made their tour in the company of a venture capital representative. Can Koenigsegg, a small quantity manufacturer manage a volume producer, even one of Saab’s small size? I’d love to find out.
The thought of US investors makes me nervous. Unless they’ve got heaps of money, so much so that they won’t try and six-sigma the company out of its identity, I’d be wary. Yes, recent experience may have something to do with this.
Hyundai are kicking goals wherever they go at the moment, though I wonder how it’s going to work out in the long run. Their recent sales efforts in the US, where they guarantee to take your car back with no penalty if you lose your job, have led to great sales numbers, but it could come back to bite them big-time in 2010 when the full effect of the global financial crisis may be felt. They are building much better cars, though.

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