Renco – SAABSUNITED

Those who wanted to buy Saab, still buy Saabs

December 5, 2010December 5, 2010 by Swade

When Saab were up for sale, there were a number of seriously interested parties.

The Koenigsegg Group used the Koenigsegg name, but were a group of individuals with various backgrounds in business.

Merbanco were a group based in Wyoming, USA, with extensive industrial and business turnaround experience. One of the guys involved with Merbanco, CJ, has been a regular in comments at SU.

Renco, a private company owned by Ira Rennert had interests in smelting, mining (which wasn’t too popular) as well as heavy machinery manufacturing.

The Genii name was used for a group put together by Lars Carlstrom, an entrepreneur in Stockholm. The group was named for Genii Capital, the investment group providing the core backing for the purchase. Of course, the group got a lot of media attention when F1 boss Bernie Ecclestone jimped on board. Genii was actually the third group that Lars Carlstrom put together in a bid to acquire Saab.

Beijing Automotive were also very interested and amongst the first round of potential buyers. Whilst they weren’t selected as one of the final bidders, they did proceed to buy some of Saab’s older technology.

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It’s been interesting to see that several people from the groups named above have gone on to purchase new Saabs even thought their interest in acquiring the company as a whole didn’t bear fruit.

Thursday night snippets – tying it all together edition

December 10, 2009 by Swade

The players as we know them and the status as we believe we know it to be.

Merbanco – sidelined
Koenigsegg Group – exile island
Renco – sideline (in big mansion)
BAIC – hanging around
Spyker – new kids on the block

There was a rumour in comments that Magna were sniffing around, but take into account Joran Hagglund’s words today about time being so crucial in this deal and you can make yourselves a rule that would seem to cut Magna out:
Anyone who’s going to be considered a serious contender for a Saab purchase at this late stage has either taken the buyers’ tour in Trollhattan already, or will be there this week.
News services are saying we’re down to two, and I have a feeling now that they’re right. It’s Spyker or BAIC, which effectively means it’s Spyker (continued life) or a parts deal as I still cannot see GM selling some of their newest gear to a competitor in China.
Bring your A-game, Dutchies.
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Some goofball got interviewed by e24.se along with the head of the Finnish Saab Club.
My 18yo stepson said it must have been a slow news day 🙂
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Here’s a cracker of a Christmas gift idea from Elkparts.

Do you remember the fun you had making gingerbread men when you were little? Here’s a modern interpretation on the gingerbread man biscuit (cookie) cutter from Saab.
A unique gingerbread cookie cutter design, in stainless steel, it follows the profile of the forthcoming all-new Saab 9-5.
At 13.5cm (5.3 inches) long, this cutter cuts a generous biscuit and is an official Saab accessory.
This product is supplied in a gift box and contains a traditional recipe for making the perfect Saab biscuits.

Mmmmm. Cookies. 9-5 cookies. A 9-5 that’s good enough to eat. Mmmmm.
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I got a good result on my Saab 99Turbo today.
It’s got a cold start problem and I thought it might have been the cold start injector playing up. My mechanic said he’s never replaced one in hi life, though, and he was worried it might be the cold start regulator, which would be a much more delicate and expensive fix.
He gave me a groovy little test lamp to hook up to the plug connected to the valve, and it turns out it might just be the electricals to the valve rather than the valve or regulator.
Much cheaper and much quicker to fix. We could be on our way (finally!)
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From Flickr today:

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Update on potential bidders for Saab Automobile

December 7, 2009 by Swade

The picture is starting to get as clear as mud when it comes to potential owners for Saab, but there are a few things happening and several Djup Strupes have been in touch and a loosed a few cats from the bag.
The groundbreaking word over the weekend is that Renco Group have reportedly withdrawn themselves from the race and the reason shared for their withdrawal is quite possibly going to prove to be a major achilles heel in this deal. Those of you panning the Koenigsegg Group for their withdrawal due to timing issues, most likely with respect to the EIB process and associated state guarantees, should take note.
GM are reportedly anxious about anyone including the EIB loan as a condition for their purchase of Saab, but buyers are considering the EIB loan as a necessity for getting the deal done as it provides essential funding for future development. The lack of clarity with regard to the status of the EIB loan is giving everyone pause (and it’s a big reason why Ksegg found the situation too risky and costly for their own planned progress).
A snapshot of where the EIB loan is right now….
What’s needed for the EIB loan right now is the OK from the European Union. The EIB has already given approval to Saab’s loan application, but this approval requires clearance from the EU to confirm that the state guarantees attached to the loan do not contravene EU regulations on state aid. The EU has not yet given this OK.
Once that’s given, it’s been confirmed that Saab should still be able to get the loan under a new owner (it was negotiated with Koenigsegg Group in mind) as long as that new owner sticks to the business plan that the loan was based on. There will most likely also be a review of the ownership group and structure to ensure that it’s sound.
All of this outstanding work is proving to be the weak point in Saab’s situation. Buyers want the EIB loan. GM doesn’t want a sale to be tied to the EIB loan. The Swedish government don’t want to do anything more than what they’re already doing with regard to state guarantees.
Someone’s going to have to give.
Whilst Renco might be “out” for the moment, this news gives a new meaning to the phrase “out”. Basically speaking, all of the current players have a chance to be back “in” – including Merbanco, Renco and the Koenigsegg Group – if all parties can find a set of circumstances that will satisfy.
It’s a comedy to rival Abbott and Costello’s “Who’s on first” and a tragedy worthy of Shakespeare – all at the same time.
Meanwhile, Spyker are reportedly heading to Sweden this week to take a sniff around, but as much as I like their cars and Victor Muller’s charms, one finds it hard to believe that they can get a deal off the ground – from scratch – in a time that will satisfy GM.
Beijing Automotive (owned by the city of Beijing, ergo…owned by the government) have apparently nabbed the older Saab tooling they were after and news reports say they’ve got the OK for a multi-billion dollar line of credit from the Bank of China (owned by the Chinese government). So the government’s OK’d a loan to itself? That doesn’t explain yet how GM (owned by the US government) will sell it’s latest technology in the form of the new Saab 9-5 to one of GM’s own rivals in China.
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So the big question, based on Djup Strupe’s intelligence and my own knowledge of Who’s on First is this: who’s going to give a little in order for this deal to get back on track?
Merbanco were not invited to negotiate further and Renco have now left the room. Those are the two remaining parties (after Koenigsegg’s withdrawal) who had the financial wherewithall to get this done. And yet all three could be back in if someone flexes a bit and allows the deal to get done.
I think it’s fair to say that this is a buyer’s market, so it’s either going to have to be GM who flex, or the Swedish government who will have to go an extra mile (they have a lot to lose here, too, remember) in order to get something across the line.
Thanks to Djup Strupe(s) once again.

Open Thread: Renco Group

December 4, 2009 by Swade

It’s Friday night, the end of a torturously long but very interesting week for Saab. I’m kicking back with the family watching State of Play, but I thought it would be worthwhile to dedicate a thread here to finding out what you, the people, think about the prospect of the Renco Group owning Saab.
Here’s a little Pro and Con I did on the Renco group back when they were bidding for Saab the first time:
Pro:

Money, and presumably plenty of it, even if Ira Rennert lost a chunk in Bernie Madoff’s scheme.
Experience, and once again, plenty of it. Rennert’s been involved in business for 50 years now; much of it international, plenty of it industrial and some of it directly in the automotive sector.

Con:

An environmental record that’s almost as dirty as La Oroya, the Peruvian city where he runs his lead smelter. In Renco’s favour is the fact that it’s cleaner than when he bought it in the late 1990s. Against is the fact that he’s temporarily shuttering the plant in preference to finishing the cleanup he promised he’d complete by October this year.
More environmental questions with regards to another of his companies, US Magesium, which was accused of dumping waste in a lake in Utah. Renco put US-Mag into bankruptcy instead of paying the almost $1billion fine. US-Mag has cleaned up since and received awards for doing so, but the original actions and steps taken to avoid responsibility leave questions.
The two incidents above would be a marketing black hole for Saab if the Swedish press were to pursue them.
A questionable business record concerned with junk bonds and pension funds.

If you want a lot more detail, you can read a reasonably uncomplimentary open letter to Swedish government that I wrote about Ira Rennert, the man behind Renco Group, at this link.
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Comments are open. What do you think?

Renco: I can buy this!

December 4, 2009May 24, 2010 by Swade

Ira Rennert is a guy who shuns the spotlight so commentary from the Renco Group has been non-existent through both the previous round and this round of the search for a Saab buyer.

A report from Swedish Radio provides some coverage and perspective on Ira Rennert’s bid for Saab and his visit of the Saab factory.

The edited Googletrans:

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Renco Group seems to still be in the bidding [for] Saab. This holding company was [previously involved] in the spring and [their relationship] with GM goes far back.

“The owner seems to have no concern with what it would cost”

Ever since the early 1990s, Renco Group through one of its companies, AM General, produced both a military and a civilian model of the SUV Hummer. GM bought the Hummer brand in 1999, but let Renco Group companies continue to produce the car.

A few years ago the Renco Group bought part of one of GM’s largest suppliers, Delphi, a company formerly owned by GM, and renamed the company to Inteva.

[They manufactures some] fittings to the now deceased model Saab 9-7X, which were manufactured in the USA. Contacts with GM is therefore lengthy and detailed.

But Renco Group, [which is] led by the 75-year-old billionaire Ira Rennert [also has] some bad conscience to bear.

Among other things, through its wholly-owned company, Doe Run Company in Peru, a mine with high emissions of lead and arsenic.

The company is considered as one of the worst polluters in the world, but the Renco Group has recently invested close to three billion U.S. dollars to take care of the emissions in an attempt to wash away the stigma.

Ira Rennert [took to the] air this spring in his private jet to Trollhättan and went through the factory, which also expressed his approbation of what he saw. [He did not seem to have] concerns about what it would cost but then supposed to have said: I can buy this!

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Thanks to Magnus for the heads-up!

My 2cents on what was an incredible day

December 2, 2009 by Swade

Whew.
I don’t know about you, but the last 24 hours have been like few other 24 hour periods in my recent memory. Sure, it’s supposed to be just a car company. But it isn’t just a car company, is it?
I’ll start at the end….
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Merbanco
It seems Ed Whitacre and the GM Board have wasted no time at all following the departure of Fritz Henderson as GM’s CEO. Just a few hours after GM stayed Saab’s execution and took Henderson’s resignation, I received the statement that now appears here at Saabs United, a statement telling us that Merbanco had not been invited to proceed any further in negotiations for the purchase of Saab.
In many ways, Merbanco became ‘our’ candidate for taking over Saab. That’s primarily becuase their CEO, Christopher Johnston, chose to engage with the Saab community and I’m humbled by the fact that he chose to do that here at SU. I know many of you were enthusiastic about the prospects of them taking over Saab, too.
We will never know the full reasons why GM and Deutsche Bank have chosen one bid over another, but from everything I heard both from and about Merbanco, they were true believers in the Saab company and the management. They believed in the business plan and put a huge emphasis on customer service, which were very encouraging signs.
I want to take a moment to personally thank CJ for his engagement with us, and for helping us keep the lights on at a time when things were looking pretty dark. You helped to galvanise support for Saab and show the media and GM that there’s life in this little Swedish company yet.
It’s profoundly disappointing that the relationship can’t continue, but like CJ, we now have to move on and continue to hope for the best for Saab’s future.
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To the rest of the bidders
Whilst Merbanco figured heavily the last week here at SU, this is an open place.

Some final thoughts before the announcement about the fate of Saab

November 30, 2009 by Swade

As I write this, were still possibly 24 hours or more away from an announcement. Therefore, I don’t intend to update too much beyond this entry unless there’s some material information that we’ve just got to know.
Who am I kidding? I’ll probably be back at it tomorrow morning…..
But most other things seem almost trivial by comparison at the moment. It feels like I’m studying for a university exam all over again. Nothing else really matters but that huge thing that’s bearing down on you, immense and overwhelmingly important.
Eggs, you’re all clear to call if something breaks. I’ve already told the Mrs I’ll be sleeping on the sofa the next couple of nights 🙂
For what it’s worth, here are my final thoughts on what we’re going through and what might be to come.
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Vale Koenigsegg
It’s my personal opinion that the best outcome back on November 23 would have been for the Koenigsegg deal to continue through to its conclusion and for Saab to go on under that umbrella. November 24 saw things take a different turn, though.
Much as I’ve come to enjoy my contact with Merbanco (I believe they’ll be great owners for Saab and hope hey get the nod from here), it’s always easier to maintain momentum than to build momentum.
I believe that Koenigsegg and Saab navigated some of Swedish business’ unprecedented waters – not without incident – but they did a great job against incredible odds. I believe they got monumentally skewered by a government riveted to its ideology and only now prompted into action by the jolt of KG’s withdrawal.
It should never have got to this and I really hope Koenigsegg and Saab can still partner up in the better times ahead.
Cowboy up!
We’ve had a bigger-than-expected amount of contact with Merbanco, who are one of the prospective buyers for Saab now and it’s been great that they’ve seen fit to make regular contact with their possible future customers.

Renco vs Koenigsegg vs Merbanco

June 10, 2009 by Swade

It’s been a long time since GM announced they were going to sell Saab. We’ve analysed every possibility six ways from Sunday and I’m pleased to say that I think it’s almost over.
Or….it’s only just beginning. I guess it depends on how you look at it.
My guess is that Saab and GM Europe are sitting down somewhere right now with the final three bidders and they’ll have signatures on paper by the end of this week. Maybe we’ll know at that time and maybe we won’t, but I think they’ll get it done.
The final three, as we’ve learned about them, are Renco, Koenigsegg and the latecomers from the US, Merbanco.
I thought I’d whip up a final pro vs con on these bidders. These points are just the few details we’ve been able to glean and my own opinions. I’m sure the opinions of others will vary, which is what comments are for.
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Renco
Pro:

Money, and presumably plenty of it, even if Ira Rennert lost a chunk in Bernie Madoff’s scheme.
Experience, and once again, plenty of it. Rennert’s been involved in business for 50 years now; much of it international, plenty of it industrial and some of it directly in the automotive sector.

Con:

An environmental record that’s almost as dirty as La Oroya, the Peruvian city where he runs his lead smelter. In Renco’s favour is the fact that it’s cleaner than when he bought it in the late 1990s. Against is the fact that he’s temporarily shuttering the plant in preference to finishing the cleanup he promised he’d complete by October this year.
More environmental questions with regards to another of his companies, US Magesium, which was accused of dumping waste in a lake in Utah. Renco put US-Mag into bankruptcy instead of paying the almost $1billion fine. US-Mag has cleaned up since and received awards for doing so, but the original actions and steps taken to avoid responsibility leave questions.
The two incidents above would be a marketing black hole for Saab if the Swedish press were to pursue them.
A questionable business record concerned with junk bonds and pension funds.

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Koenigsegg
Pro:

That picture isn’t enough? Do I have to say more?
OK, tying up with Koenigsegg would be a marketing dream come true. Both are Swedish, both have a heritage of individuality. Just the name ‘Koenigsegg’ in a Saab review instead of the usual reference to GM and platform sharing would be worth sales in itself.
The possibility for technological tie-ins could also be very worthwhile.

Con:

Experience: Saab will need to cover the backoffice experience that they’ll lose when they separate from GM. That experience is the global trading stuff that GM took care of. It’s unlikely that Koenigsegg can cover this.
Scale: this goes with experience. K-Segg make 20 cars a year. Saab are hoping to make 200,000 a year in a few years time. Will the powers that be let Saab’s managers be Saab’s managers? Bard Eker’s recent comments about the number of engineers needed in a car company were a worry.
Finance: Can a company that makes 20 cars a year – even at one million Euros per vehicle – muster up the financial resources to take this on?

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Merbanco
Pro:

Players that we’ve been able to identify appear to have a solid background involving manufacturing, technology, finance and global business.
Identified experience with long term ventures
Cited by Djup Strupe as being a good fit and long-term thinkers.
Likely a front for pockets that are deep enough to and heads that are wise enough to help Saab through the challenges that are to come.

Con:

The unknown nature of the people behind the point men for Merbanco. We can take it for granted that they’re serious about turning Saab around, but until you know, then you just don’t know. Countering that, they’ve come this far, been knocked back once and come again, so one would have to assume they’re pretty committed to this.

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I’d like to echo the thoughts and hopes of a few in comments and suggest that if Merbanco and Koenigsegg could get into a room and put together a joint venture of some sort, then that might be the absolute best outcome that we could hope for.
Merbanco’s experience and funding along with Koenigsegg’s appeal could take Saab one heck of a long way if you ask me.
I hope that’s a possibility.
Failing that, from what I know I’d be happy to house my horses in Merbanco’s stable (that’s a little Wyoming cowboy talk for y’all).
What matters most is that Saab get the best possible buyer. One that will let management get on with the job of re-establishing this company and allowing Saab to get its message out, and it’s cars into the hands of new drivers.
That’s what it’s all about – an open road and an inspiring car to drive.