WooDz vents on Opel and the Saab 9-4x

WooDz is one of our long-termers from the days of Trollhattan Saab. He’s got a bit of a unique perspective on things given that he lives in Germany but it is an expat Brit. Oh, and he used to sell Saabs for a living, too, so he’s pretty familiar with markets and customers, etc.
He’s sent me a little ventitorial and I figured it’d be good to get out in the open.

There’s a few things that have been going through my mind lately and it’s now reached the point where I need to vent a little.
First up is OPEL and the recent news that Nick Reilly is convinced that GME OPEL can return to profit if they kill off 20% of their production and 10% of their workforce (not meaning they’ll literally kill 10% of their workers, but…..you know….).
I can only guess that means 95% blue collar, hard grafting people and 5% white collar managers on 4 times the blue collar wage, who for the past year have endured a few bouts of RSI, churning out bar graphs and pie charts in true GM fashion, quite possibly showing the forecasted levels of ‘Pi**ed-offedness’ felt by Magna and the German government for each month they dragged their heels on the sale of said German company.
The Great Plan also consists of injecting 11 billion Euro and bringing 9 new models to market. Naturally this 11 billion isn’t just for new models, it will also be used to improve OPEL’s facilities, meaning the canteen will now offer latte and cappuccino as well as regular filtered coffee. Maybe that’s where the nearly 3 billion Euros will go from requested government aid.
What confuses me, and maybe some of you would like to open my eyes to something I’m missing here, is why should the German government give 2.7 billion Euros in aid, when the result still leaves over 2,000 people in search of work? In January, 340,000 people registered for state benefits in Germany, pushing the total of unemployed, in one form or another, to over 10 million for this month.
How about OPEL cutting its production by 20%, cut off the dead wood in redundancy packages, stop ‘crying wolf’ to the EU and invest 8 billion Euros instead?
Even 8 billion Euros is an obscene amount of money. This is a company who couldn’t find 500 million Euros to invest in a premium brand like SAAB each year. OPEL has 9 products and is looking to increase that by a further 3 new products. SAAB, on the other hand, should have at least 5 products. A Sub-Compact, A Compact, Mid-size Sedan/Estate, Over-sized Sedan/Estate and an SUV/MPV. If you want to give them names be my guest.
If GM had invested 4 billion Euros into SAAB I’m 100% convinced that SAAB’s product wouldn’t be in so much need of attention. This 11 billion Euros is just another reason why I am so happy to see SAAB finally setting off on another course and the quicker they can stop using GM components the better. I’d much rather see SAAB use Peugeot/Citroen as a supplier than have GM receive one more Euro of their money ……..which brings me to the 9-4x.
I like the 9-4x, it fills a massive void in SAAB’s product line-up. If you don’t like SUVs then it’s not going to be for you. However, please don’t be all elitist and start spitting fire at the thought of a SAAB off-roader. If Porsche can have one, then any manufacturer can have one.
However, why on earth are we waiting until 2011 for this vehicle?
The concept debuted 2 years ago. It’s production ready. What excuse does SAAB have not to launch the 9-4X sooner? Production costs? Shipping Costs? This is the beauty of the 9-4x. GM build it, SAAB slap on their margin, customer pays for it.
I know what you’re think though. Marketing; we need flashy TV adverts. No we don’t! TV is dead and expensive. Stick to print and online marketing.
So SAAB what are you waiting for? Place an order for 100 Units per month to get started and watch your demand rise to over a 1,000 units a month by the end of the year, without the need to discount them. Keep at least a 6 month waiting list as orders rise and see how well the residuals hold on the used car market. I’m not teaching these boys anything new, just reminding them that flooding the market with unsold cars is very bad for business.
With SAAB producing just 100 units per day they are in a very advantageous position over presumably all other manufacturers who are looking at cutting production and down-sizing. SAAB doesn’t need to just right-size their vehicles – they can right-size their production too.
My hopes for SAAB are high but maybe, like many of you, I’m still getting over the fiasco of the last 15 months. I’m tired of all the what if’s. I want to see some action, new products and I want to see them soon; not in summer and not in 2011.
Now’s the time to capitalise on all the press coverage and launch a new model every 6 months, starting with the 9-5 sedan in March. If it can’t be ordered, it can’t be sold. If it can’t be sold it’s not earning you money.
Just remember you own advertising “The Time is Now!”

GM up to their old tricks – plan possible re-badge of Saab 9-5

Some things never change.
I can tell you quite positively that GM are negotiating a sale of Saab, but it seems their plan B is to just take the 9-5, shove a different badge on it and sell it as something else.
The story is at DN.se and here’s a snippety Googletrans:

According to Dagens Industri’s sources, GM is planning to use the new Saab 9-5: an own model program, including a future Buick in the U.S.. GM is also in a letter to Saab’s sub-contractors have estimated the time of closure of Saab to five years.
There are sources in Saab Automobile in the Dagens Industri – DI – indicates that GM now see positive opportunities to closure of Saab. By making use of Saab’s technology, tools and production equipment for GM use the new 9-5: an – that would be launched in the spring – to a future Buick in the U.S..
In the GM is also talk of exploiting Saab technology for the production of a new premium car for Opel, “says DI’s sources. It would then be about the reopening of the closed trial with an Opel Senator in Europe.

Shakespeare couldn’t even document the full bastardry these beancounters are capable of.

Saturday morning snippets – Seeya in January edition

Friday saw the last shift at the Saab factory for this year, with a 4-week vacation taking place of the normal 2-week break at Christmas.
It’ll be a nervous Christmas for all these workers, though, as a decision will be made during their break about Saab’s future.
All you Saab workers – we’re anxiously waiting, too. It can’t feel as nerve-wracking for us as it does for you, but know that we’re with you.
Work at the factory is scheduled to re-start on January 11.
Top Gear drive and review the Saab 9-3x:
I said a few months ago that the modifications made to the SportCombi to bring about the 9-3x work really well, that they make the car make sense even more than usual. These guys seem to agree.

This is the best Saab on sale. I know, I know: right now, in the months before the new 9-5 big car and 9-4 crossover become available, being the best of Saabs is like being the healthiest patient in intensive care.
But it’s better than that. If you’re in the market for one of those slightly jacked-up, slightly toughened-up four-wheel-drive estates, this is very possibly the one to go for……
It’s one of those cars that feels at home with itself. All the dynamic attributes rub along nicely with each other.

And of course, it gives me an opportunity to post one of my favourite Saab 9-3x photos 🙂
Saab 9-3x
There’s more bad JD Power news for Saab this morning, with the brand doing particularly poorly in the 2009 Customer Retention Study.
Saab came dead last in the survey. The typical industry retention rate is 48% and Mercedes Benz scored the highest for customer retention, at 67%. Saab scored 9%.
That said, the reasons why are pretty easily explained. A company in turmoil, ownership uncertain, 60%-plus drop in sales, no leasing, bottomed out trade values. All of this is caused by uncertainty.
It’s not good, but it’s nothing that a couple of good years can’t turn around if Saab get the chance.
Now that the northern winter is well and truly in effect, GM Europe are trumpeting their fantastic all wheel drive system in the Open Insignia.
Developed for adaptation to front-wheel drive platforms by Saab.

Thursday Snippets – Lost edition

I really don’t know where to begin today.
So many opinions, so many headlines. Most of them have been covered in comments already, but I suppose my task is to sort the wheat from the chaff.
Armchair quaterbacks
There’s a bucketload of these going around at the moment. Automotive ‘analysts’ who most likely don’t even think about Saab until a journo rings them up and asks for an opinion. Most of them will be quite dismissive and give a summary comment like “GM will shut down Saab. It’s just not worth them thinking about”.
I’m happy to be as dismissive of them as they are of Saab.
It may well turn out that Saab does not survive this episode. That can happen. But having followed this story for almost a full year now, I know from various contacts inside and outside of Saab that work is going on in the background at a furious pace. They are not lying down.
If Saab is closed, it won’t be because of a lack of work in Sweden and won’t be because there’s no potential there to build something.
Problem Mathematics
I still can’t get the collapse of the Koenigsegg deal to add up.
fabela.JPG Fabela says it was a complicated deal involving a lot of parties and they weren’t able to get all the parties moving at a quick enough pace. See the interview here.
But the money was just days away. This has been confirmed by Joran Hagglund and the Swedish Debt Office. They would have been up and running an just a few weeks.
Were their margins for time so incredibly fine tuned that 10-14 days is the killer difference?
He says they no longer believed that the business plan they’d developed could be delivered because of the delays. Again, this is the business plan that was reviewed by so many different bodies and approved, yet it was not robust enough to last a few more weeks?
I just doesn’t add up.
And in the next sentence he says the plan was strong and viable.
The money was just a few weeks away. So a strong and viable plan should have been able to be implemented. Didn’t this strong and viable plan go up to December 31st, the date GM had set for Saab?
I just does. not. add. up.
There must have been something else at play here. There is an unseen hand at work with one of these players that has folded this thing up. There’s no other explanation.
A gutsy appearance
CvKfactory.jpg You’ve got to tip your hat to CvK and Eker for visiting the Saab factory today to try and give some account of what went wrong. By all accounts they were shown some support by the people there, which is the right thing.
Things have gone wrong here, but CvK & co have had a genuine crack at this. The bigger fault here may lie with GM and Deutsche for selecting them in the first place. But I digress…..
CvK said to TTELA that “It was important to come here and tell us more about why we pulled ourselves out” but from the Googletrans that I can see, there doesn’t seem to be too much more of an explanation that we’d already heard.
It’s a Maud, Maud world
If there’s one thing that’s really annoying in all this, its the point scoring exercise going on between politicians in the Swedish media.
Thankfully, in between volleys, Maud Olofsson did have a few things that were notable and sensible to say:

  • A new buyer coming in is going to have to be able to get the deal tied up quickly. They will need to be well backed and well resourced.
  • The government will work with whoever it is to do what they can to get things done, but they won’t take a stake in the company (which we all know)
  • The EIB loan process that’s been undertaken so far was tied to Koenigsegg’s plan. Any new potential owner requiring and EIB loan would have to start the process over again.

That last one’s in bold because it’s pretty important.
A final clip, from Automotive News:

A Swedish government official said today that General Motors Co. appeared to still have hopes of being able to sell its Saab unit after the wheels came off of a planned divestment this week. “I talked to GM last night and my impression is that they have not given up hope,” Joran Hagglund, state secretary at Sweden’s Industry Ministry, told reporters.

And for those of you thinking that GM might still retain Saab, you’d best bear in mind the news from Germany:

General Motors Co. expects to cut around 9,000 jobs at Adam Opel GmbH, or nearly 20 percent of the ailing German carmaker’s work force, as part of a $5 billion restructuring, a top executive said Wednesday.
Nick Reilly, the head of GM’s international operations and interim CEO of Opel and its British sister brand Vauxhall, outlined the planned cuts, which were slightly fewer than anticipated, but said no decisions had been reached regarding plant closures.

Cutting 9,000 jobs in Germany and then finding a viable excuse to keep 4,000 in Sweden?
Good luck selling that one to the German government just before asking for aid.
Saab need to be sold. It’s the only viable way to survive.

EnG Breaking the Tension Snippets

OK — for all of you out there biting your nails wondering if your Saab dealer was fired or was re-knighted as a purveyor of fine Swedish metal, I offer these small diversions to ease the tension that you may feel….
First, the fleet at the EggsNGrits manse has grown large. Four vehicles for two drivers is a bit much. But they look so good in the driveway.

the fleet.jpg
front 34.jpg

Click through the jump at the bottom for more pics of the “new guy”, my “new” 1991 Saab 900 Turbo convertible in Edwardian Grey. I love driving that car! More on that in a future post.
General Motors has repaid another 200 Million Euros from its May 2009 bridge loan from the German government, and confirms that the remainder (400 Million Euros) will be repaid within the month.
Certainly, this signals that Opel and Vauxhall are at least holding their own in the European market. If they are counting on labor concessions, our old pal Klaus Franz, the head of the German auto workers union representing the Opel Russelheim workers, calls the GM plan “a farce” and says that, “there won’t be a single cent’s worth of concessions from workers to back [GM’s plan]”. As you may recall, Mr. Franz demanded that Saab assembly work should be transferred to Russelheim to meet contractual increases at the expense of the Trollhattan labor force.
My word to Klaus Franz: those karma paybacks are pretty stiff, aren’t they? I think that you’ll get what you deserve and more from GM. The gloves are off and they’re going to make money, even if that means making lots and lots of cars in Korea.
I, for one, am glad that Saab’s future will be only loosely tied to you!
Finally, how’s this for contrarian thinking: A Saab dealership that’s expanding!
Well, actually, Valenti Saab, a Watertown, Connecticut dealer, will move the Saab showroom into a new building rather than have Saab share space with the VW and Audi cars in their current space.
Hey, if they need more room, I call that an expansion in this day and time!
Congratulations, Valenti.
(And a note to Mr. Taylor, the newspaperman that wrote the story: Saab is in Sweden, not in Switzerland. We’ll keep that between us.)

Read moreEnG Breaking the Tension Snippets

GM cancels sale of Opel

News just in, with thanks to Dippen via comments…

General Motors (GM) has announced it has cancelled plans to sell its European car business Opel, including its UK brand Vauxhall.
The US giant said in a statement that its board had made the decision because of “an improving business environment for GM over the past few months”…..
……GM added that it had also come to its decision because of the importance of Opel and Vauxhall to its global strategy.
It said it would now “initiate a restructuring of its European operations in earnest” and seek aid from the German government, and other European states.
However, its decision is likely to cause much anger in Europe, where the planned sale of Opel has been dragging on for months.

I believe the Saab deal is binding, so there should be any plans to back out of that one. And how glad are you and I now that Saab wasn’t bundled in with the sale of Opel as some initially suggested.
This has got to be a difficult situation. I undersand why they’d want to keep Opel, but with the EU rules on (more) state aid and the fact that many workers actually wanted the sale to proceed, this is going to be a pretty hairy workplace for some time.
I wonder how many Christmas card lists just got torn up in Europe and Canada?

GM trying to hang on to Opel?

There are a number of reports starting to circulate, stating that General Motors may be working on a financial plan that will allow it to retain it’s ownership of Opel.
The whole story starts with a report in the Wall St Journal that I can’t access, but it’s covered elsewhere as well.

General Motors is looking at shelving a German-backed bailout of its Opel European car arm, the Financial Times reported. The U.S. carmaker and its advisers are instead considering raising about 3 billion euros ($4.3 billion) of rescue funds for Opel and its British Vauxhall brand from the U.S. and other European governments, including the U.K. and Spain.

These reports are quite fresh and there are still reports going around that negotiations are taking place for Opel’s sale. I guess it’s pretty early to say what’s going on with any particular authority, but the way GM’s been stalling on this transaction, it’s not overly surprising.
For those who are worried that they might try and pull the same stunt with Saab, bear in mind that the deal signed with Koenigsegg Group last week was a binding agreement. The Saab transaction will go ahead.
Magna were merely nominated as a preferential bidder early in the piece. It seems they’re still the preferred bidder in the German government’s mind, but GM prefers RHJ International, and that may only be if they’re forced to sell.

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