Jan-Ake Jonsson on Saab’s reconstruction

This is a multi-faceted story that Daniel posted a translation of in comments. It’s well and truly worth a posting here on the front page.
The dot points from the story:

  • Saab have eight very interested parties they’re talking to at the moment
  • Reconstruction is due for completion in three months, but can extend out as far as 12 months
  • There’ll be another facelift to the Saab 9-3 prior to a new one coming, which they’re working on already

There’s some Swenglish in there thanks to the wonders of the internet, but I think you’ll get the gist of things.
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SAUTOSJÄRVI. The sun sparkles in the snow on the lake two mil outside Kiruna. It is a trial run of the new Saab 9-3X, which is scheduled to come in the autumn. CEO Jan-Åke Jonsson, who joined Saab as 22-year-old in 1973 is here. He’s still full of energy despite nearly inhuman pressure the last week.
– I will be quite happy at the end of all this, when I can put my head on the pillow and get hours of sleep per night. It is an incredibly stressful situation, I would be lying if I said otherwise, “he says.
For the kind of things happening in nature – on all fronts. The company is reconstructed, a new owner is found, the development of new models and continue discussions, discussion with the government.
– “I have 4000 employees to keep calm and 1100 dealers who wish to have continued confidence in the brand. ”
Disruption in the daily production.
During yesterday afternoon came information that the Swedish Customs stopped the importation of material to Saab Automobile because customs duty had not been not paid. And that production in Trollhättan be temporarily stopped as a result.
– Customs must change the rules in a reorganization. We have to pay directly at the border. It just happened.
Can duty be paid?
– “Yes, absolutely, absolutely, “he says emphatically.
It also circulated information yesterday that other suppliers stopped deliveries.
– “There are suppliers who threatened it, but none stopped the deliveries.”
The number one priority is to find new owners. He is puzzled before the rumors that sister brand Opel would be entering as buyers.
– “We must have an owner who is financially strong.”

Read moreJan-Ake Jonsson on Saab’s reconstruction

New “Save Our Saab” T-Shirts

Ivan’s been busy playing around in our Saab Design T-Shirt Shop and he’s created a little something to spread the Reconstruction Spirit of positivity and independence.
Here are the two new designs, specially formulated to be worn at a Trade Union rally that might be held in your immediate area (or just to bolster some community spirit for Saab, as well).
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We normally have a small margin on T-Shirts sold through the Saab Design Shop, but in order to get as many of these out into the public as possible, we’ve eliminated the margin completely. The only people getting paid for these puppies are our T-Shirt producers, Spreadshirt.
And remember, if you order before the end of February, you can get 15% off, too (see that link for the code you need to claim the discount.)
This is the one I’ve just made up, a ladies T-shirt, size M, in a nice slimming black. It’s being dispatched to the Swedsh Ministry of Enterprise.
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Saab forced to stop production, but why?

Memo to the Swedish customs people, or any other Swedish government types who plan on screwing Saab over – can you at least do it early in the morning so I can cover it here?
🙂
An hour after I went to bed last night, news broke that Saab had to halt production due to a parts supply problem stemming from Swedish Customs not releasing any parts due to outstanding customs duties owed to them.
A report from the GP says thus:

When Saab canceled the payments due to reorganization process, the Swedish Customs stopped all shipments from warehouses in Trollhättan and Nyköping. In stocks are goods from suppliers outside the EU area, as well as cars for export outside the EU.
Swedish Customs confirms that supply will be closed for as long as Saab does not pay. According to Hans Ohlsson at the Swedish Customs, Saab owes them substantial sums.
The only way it can be solved is if someone (the shipping company, for example) steps in and pay the money, and then demands that money from Saab. One company, Schenker, stopped all shipments to Saab last Friday, but they started shipping again on Monday.
They have taken goods as pledge for unpaid invoices. They will not say how much, but claims they have enough to cover the claims.
Saab are in continuous talks with GM about the situation and expects to solve it soon. Gunner Brunius, head of production at Saab, says that production was stopped on Wednesday. They could build 40 cars that day before they ran out of material. He thinks they can get going again early Thursday morning. Saab has about 670 different suppliers.

And The Local added the following, which quite frankly, pisses me off:

According to Ohlsson (from Swedish Customs), Saab now has the option of either finding the money somewhere or finding somebody who will pay the debt on their behalf.
“They would have to pay all of Saab’s credit. Saab is not getting a penny of credit from us,” he said.

If that’s been translated correctly and in context, then that’s a pretty aggressive attitude from a government agency, when that particular government is supposed to be engaged in talks to help the company concerned.
As Turbin noted in comments, the extension of a period of credit for such transactions is normal business practice. For Saab to be cut off by the government in these circumstances shines a pretty poor light on the attitude being shown towards Saab’s efforts to reorganise.
Saab and GM are apparently working to fix the problem so that the goods can be released and production can recommence tomorrow. This was obviously an administrative bungle during a pretty turbulent time. To have it treated so aggressively, causing so much negative publicity during what is already a time of distress, is just downright poor form.
If the Swedish government are genuine in their desire to help Saab (albeit that help not extending to GM) then I hope someone at Maud’s Enterprise Ministry has called these Customs guys and told them to pull their heads in. Then again, if the cancellation of credit is at Maud’s request…..
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I hope all these news agencies run stories again tomorrow stating that the issue has been resolved and that production is underway again.
I won’t hold my breath, though.
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Thanks to all for the many emails I got about this one, and to ctm for the GP translation

Saab-Opel: there’s no love in the relationship

It has become increasingly clear that the Swedish government will not allow Saab to receive government-sponsored funding if they plan to remain as an independent entity. Saab need a new owner, plain and simple. We may not like it that way and Saab may not like it that way, but if they’re going to get that EIB loan sponsored by the Swedish government, then that’s the way it’s going to have to be.
A number of people have pondered the possibility of Saab becoming part of Opel in the event that Opel is spun off from General Motors. Allow me to give you my perspective on this, gleaned from several conversations in the last 12 months.
One guy I spoke to, from Saab, said words to the effect that Saab did a lot of development work on XWD in the background, because they knew that Opel would kick up a fuss about Saab getting first use of it. That turned out to be true, and Saab ended up with a reasonable fight on its hands to maintain first use of that technology.
Another guy, more recently, said that the phones between Saab and Opel were running cold in recent times, that the two companies had pretty much stopped attending each others meetings.
And yet another said words to the effect that if Saab’s connection with Opel is severed then many of the Opel staff in Germany would be pretty happy to hold the doors open while the Saab staff leave. Another staffer in Germany said that many of the Opel staff underestimate the Saab people’s fluency in German and therefore don’t mind what they say about Saab, and what they say isn’t complimentary.
Many of these things are attitude issues that could probably be overcome with a little good management, but the plain fact is that Saab and Opel don’t seem to play well together and have a very limited interest in doing so.
There’s been an article about this very fact in the Swedish news today. ctm was kind enough to provide a translation:

Saab Automobile has already started to untangle themselves from close cooperation with the GM-brother Opel.
The idea of a merger with the failing German automaker is something the unions in Trollhättan totally rejects.
– “It would be a disaster,” says Håkan Danielsson, representative of academics and engineers at Saab. The German unions have raised the question, but there are no negotiations.
– “I understand that Opel sees a benefit in having another brand to secure German jobs. None of their plants are fully utilized so Opel could certainly benefit from building Saabs, but we would just lose on something like that,” says Håkan Danielsson.
His opinion is shared by the IF Metall local representative Paul Åkerlund.
– “A merger would not work,” he says.
Unions at GM-owned factories in Europe will join forces on Thursday in gatherings to save jobs. Trollhättan will see torchlight processions and speeches. In Germany the climate is a bit rougher and there are talks about protests.
– “We choose a slightly different way,” says Paul Åkerlund.
Both Saab and Opel are losing money, and both feel they need help from their respective governments in order to stay afloat. Earlier, GM has forced them to compete for production. Opels factory in Rüsselsheim won the fight for the next generation Saab 9-5, but in Saab’s business plan and reorganization plan all production moves back to Trollhättan.
Saab and Opel has a great deal of common parts in their cars and have worked closely together. That is about to be broken. For example, the assembly of the wheel- and brake package for Saab cars, work previously made in Rüsselsheim, has moved or are being moved to Trollhättan according to TT. More of the same is to be expected.

I’ve got my own fears about a Saab-Opel operation.
I tend to agree with the news article, that Opel’s interest in Saab is only due to the need to fill capacity and keep German jobs.
I have little doubt that an arrangement that sees Opel owning Saab will be little different from GM owning Saab. It’ll be an arrangement that sees a great deal of technology and development flowing out of Sweden and very little flowing back. It’ll be an arrangement that sees Saab get crumbs from Opel’s table and little else.
Saab need as clean a break from the GM family as is possible. This isn’t it.

The very public divorce that Saab have to have

Back in the early 1990’s, one of our former Prime Ministers here in Australia, was noted for saying that Australia was experiencing “a recession that we had to have”
In other words, the economy had over-boiled and a correction was necessary to bring things back into check. Of course, he was crucified by the opposition and the press for resigning the country into a difficult state, and maybe they were right, but the point is relevant here.
I got an email today from one of our regulars here, Turbin, about this very idea. I think it’s quite relevant.
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Hi Swade,
I have been thinking about the very public and ‘damaging’ (for SAAB) tennis game going on between GM and the Swedish government (that the new SAAB marketing widget is ball shaped is no co-incidence). I believe this short term ‘damage’ is essential and that the government and SAAB are playing their cards right. I believe that for SAAB to have a successful future then the divorce from GM needs to be as public as possible.
There can be no doubt left in people’s minds that SAAB is disconnected from GM.
The restructuring and it’s timing has apparently even caught GM off-guard and this is important. It needs to be seen that SAAB are proactive, as they traditionally have wanted to be.
Furthermore the Swedish government’s hard-ball approach is very well justified and, I think, important to SAAB for the following reasons:
– GM is publicly ridiculed and demonised by a ‘third’ party (I used third loosely as I’m sure there are hundreds of thousands happy to agree)
– SAAB is pushed to think very hard about it’s own future, rather than just be a victim in this sorry affair.
– Having been under intense scrutiny, once SAAB has the government’s backing it will truly be seen as a well-founded vote of confidence.
– Acknowledging that GM did not want to apply for the EIB and become beholden to paying back on that loan (how the hell are they going to pay back the U.S. I wonder?!).
– Indicating that the Swedish government will provide guarantees for whoever wants to step in with a viable, pro-active ownership plan for SAAB, something that GM could never provide in it’s 20 years of abusive parenthood.
For these reasons and more I believe the current ‘disruption’ is vital. This is one case where ‘business as usual’ is not an asset for SAAB. ‘Business as usual’ has meant bad business for too long as far as SAAB is concerned. A phoenix requires ashes before the rebirth. So to does SAAB. If SAAB’s greatest strengths are ‘concepts well executed’ then these concepts are what need to come through unscathed and rather strengthened and executed very well as the Trolls know how.

Tuesday Snippets – viscious circle of Saab edition

What a frustrating night!
What the heck did we all do before the internet happened? My ISP tells me that service is now restored at home (I’m writing this from elsewhere at the moment) so hopefully all will be normal again this evening.
My thanks to Eggs for keeping things ticking over, as well as my big sister for helping out – and of course to all of you for your patience and willingness to pitch in.
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I’ve spent all morning catching up on what I missed overnight.
It seems Saab are stuck in a viscious circle of needing government support, which won’t come unless they have a buyer. Of course, a buyer will want to know that things are going to develop in some way, which won’t be possible in the near term without government support, which hinges on a buyer, who wants to know that the government are on board……
And so it goes.
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Here are the links I’ve been catching up with this morning:
Saab laments mixed messages from Sweden (The Local)

Tensions were high during a debate between Sweden’s enterprise minister Maud Olofsson and the CEO of Saab Automobile televised on Sveriges Television (SVT) Sunday night…..
….”We get mixed messages from the government,” said Jan Åke Jonsson, whose company entered a court-supervised restructuring on Friday in an effort to stave off bankruptcy…..
Jonsson added during the broadcast that Saab had been contacted by several potential buyers were interested in the company, including investors and other auto manufacturers. But before any possible purchase moves forward, Jonsson said the government needs to send a clear signal regarding state-backed lending guarantees.
“It’s important for us to get a signal from the government. I think the signals we’ve been getting from the government have been different,” said Jonsson.
To illustrate his point, he explained that the government had said previously that Saab should request a loan from the European Investment Bank (EIB), but that Olofsson is now saying the application should have been made by Saab’s owner General Motors (GM).
Saab has, according to the Dagens Industri (DI) newspaper, submitted a request to the EIB for a €500 million ($647 million) loan. But before a decision is taken, the EIB wants to know whether or not Sweden will provide state-back loan guarantees.
No guarantees are expected, however, until Saab has presented a credible business plan.

Just a quick note….I can confirm from speaking to people at Saab last week that they did indeed submit a request to the EIB for that loan. I’m not sure why The Local is reporting it just as a Dagens Industri thing. I’m sure if they’d asked, then Saab would have told them.
Saab has potential buyers (The Local)

Struggling car maker Saab has received interest from a number of potential buyers, the Swedish government said on Wednesday, refusing to divulge any names….
….”There are some interesting names,” he said, disclosing no details.
Meanwhile, Saab’s managing director Jan Åke Jonsson said the interested parties were “from the automobile industry and outside the industry,” both in Sweden and abroad.

Kudos to Maud Olofsson for showing up for a meeting in Trollhattan. I’m sure the locals gave a warm reception, despite the fact that she seems more intent on telling GM off like a misbehaving teenager than what she is on saving their jobs.

Sweden’s enterprise minister Maud Olofsson praised Saab employees following meetings with company representatives on Monday, while at the same time chastising General Motors for abandoning the troubled Swedish brand.
“I am not thinking of letting GM get away from this so easily,” Olofsson said a midday press conference in Trollhättan, home to Saab’s main Swedish operations.
….”We’ve had a very positive conversation with Saab’s leadership, but also with a number of works on the factory floor,” said Olofsson at a midday press conference in Trollhättan.
She also stressed the importance of Saab’s workers for the company’s future.
“Employees are Saab’s primary resource,” said Olofsson. “It’s good that the employees have so much faith in Saab.”

More faith than what you’ve got, toots. Anyway, I hope she gets her stuff sorted, and soon.
Swedish PM Fredrik Reinfeldt spell it out….(Reuters)

The Swedish government can guarantee a European Investment Bank loan to General Motors unit Saab if a new owner that can cover half the necessary financing emerges, Prime Minister Fredrik Reinfeldt said on Monday.
Loss-making Saab sought protection from creditors this week to survive the current global economic malaise and buy time to find a new owner after GN decided to cut its ties with the unit by the start of 2010.
Reinfeldt repeated the government did not want to own Saab but said it could guarantee a loan for the company if the carmaker found a new owner to keep it running.
“Either GM change their decision on the exit or a new owner or a group of owners will come forward,” he said.
“If there is an owner that provides half of the resources, we can put up a state guarantee for the other half.”

Put Nomura Securities on your “don’t do business with because they’re stupid” list. From US News

“In its Swedish home market, it ranked behind Volvo, Volkswagen AG and Toyota Motor Corp. in market share last year.” Mike Tyndall, an analyst with Nomura Securities, told the Star, “I don’t see how you make it more profitable than it has been. Unless there is something glaringly obvious that GM missed, which I doubt.

GM didn’t miss things with Saab? How about R&D, model development, marketing…..the list goes on.
And it seems GM had little-or-no warning that Saab were going to file for reorganisation last week, which is a good sign. From Automotive News (sub):

General Motors executives were surprised by the speed at which Saab filed for bankruptcy last week, leaving them with few answers for anxious U.S. Saab dealers…..
….”The GM leadership was surprised by the filing and didn’t know it was coming, so they are going through scenarios right now that they don’t have the answers to, such as buying back inventory and so on,” said a Saab dealer who listened to the broadcast.
A GM spokeswoman said the company had no advance word about the timing of the filing. Although GM owns Saab, it had moved to set Saab up as a separate entity with its own board.
“We knew a filing was a potential, but it could have happened this week or later,” Joanne Krell, spokeswoman for the Saab brand in Detroit, said Friday. “It just wasn’t entirely clear.”

Why good news? Saab are taking the initiative. Which is what an independent company does.
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Finally, a list of Saab’s creditors, who will all be consulted as part of this reorganisation process.
It gives you an understanding of how big a reach even a small company like Saab has. I’m sure there’s not a large number of companies here who are solely dependent on Saab, but even if it’s just 10% of them, then a liquidation would cause massive disruption in a lot of communities.

Saab’s court papers for reconstruction

I posted links to these back when it all happened, but things were moving so quickly then that you may have missed them.
The PDF version is available here.
The papers are primarily in Swedish, comprising the application background material and a set of financial statements from prior years. There is an English tranlsation of the application, though not of the financial statements.
I’ve taken screenshots of the English-language section of the papers, reproduced below.
Click to enlarge.
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rescue-saab.com

Many of you have talked about something like this in comments and now SU site sponsor mobilforum Dresden have kicked things off.

rescue-saab.com is their endeavour to bring people on board in a fund-raising effort to support Saab during what will be a rocky road in the months to come.
This is the English language press release:
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SAAB DEALER MOBILFORUM DRESDEN INTENDS TO RESCUE CAR MANUFACTURER SAAB BY USING WORLD WIDE HELP.

People who own a Saab are not only regular customers or vehicle owners. Saab drivers are special. They are enthusiasts and individualists. They are visionaries and achievers.

It takes people like this to convert an idea that was born in current struggling times into reality: The rescue of their beloved brand – Saab – preserving its survival for the future.

Tobias Kaboth, Managing Director of the official Saab-Dealer mobilforum Dresden:

“Rumors and negative news keep coming our way. Reports about the downfall of the traditional brand Saab are getting stronger. This causes customers to call all the time, they ask us about the latest news and to ensure us that no other car brand would serve as an alternative to them.”

This is how the idea evolved to rescue Saab by buying it.

“During a night-time brain storming session we founded a group called “Rescue Saab e.V.” and designed its website www.rescue-saab.com, where a community can grow strong enough to have a voice. By paying a starting member fee between 50 and 500 Euros, each member will become a Saab stockholder once the company is bought. The more money is put in, the more stocks will get issued to the member.

“We are not going to sit tight and watch the fall of our beloved brand: We love Saab – We will rescue Saab!”, underlines Michael Hesse, Managing Director at the mobilforum Dresden.

Everything is trustworthy, notarial certified and administered through a trust. Attorney Adam and corporate consultant Mathias Oldenburg will assure that the legalities of the trust are in order. In the event that the ideas fails and the collected money is not enough to buy Saab, every member will get their money back.

The initiators of “Rescue Saab” at mobilforum Dresden are well aware of the scope of their action and that it must sound crazy to people uninvolved. There is more necessary then founding a group and creating a website in order to buy a company like Saab.

However, the first responses have encouraged the initiators to keep working.

A possible investor recognizes through the actions of the “Rescue Saab” group a potential connected to the brand of Saab and how loyal the community of Saab-Drivers and Friends are.

At best, the club “Rescue Saab e.V.” will support a potential investor with its collected money or by giving advice from loyal Saab clients.

Prominent Saab drivers such Stefan Raab, Bastian Pastewka but also Bill Gates, Steven King and Jay Leno will be contacted to support this campaign.

“With the help of their promises and their name we will make it and Saab will survive!”, concludes Kapoth and Hesse, who are both optimistic about the chance of success.

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ADDENDUM – You can register at the site without having to make a contribution to the group at this time. Your registration as a sign of support is appreciated by the group managers.
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OK, now the hard part…..it’s generally not good policy to risk annoying a sponsor, but if I’m going to publicise this then I feel an indication of my intentions is necessary so to not be misleading….

Whilst I’m happy to spread the word about this endeavour, please do not take this publicity as an endorsement or an indication of my intention to participate. I have informed mobilforum Dresden of this.

If Saab eventually get to a point where they want to raise capital via a share sale, then I’ll be on board with no hesitation. Until then, I’ve got a big mortgage and a blog-supporting wife who’d rather see our money there than in a law firm’s trust account on the other side of the world.

I am VERY supportive of the idea of anyone contributing in whatever way they can to help Saab and encourage everyone to give this their due consideration, but I won’t be participating personally.

I am not a financial advisor and this post is not financial advice.

On an entirely different note….
Stefan Raab drives a Saab???
That’s the coolest thing I’ve heard this week! How he didn’t win Eurovision with that song still baffles me.

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