GMs Troubles Are Just Beginning

Oh General Motors where have you gone? This week has been amusing to watch from the sidelines. When I worked at a GM store we were always the number one manufacturer in the world and there was a lot of pride and about as much arrogance to that. When would would have rally meetings they would always talk about our market share and where we out performed everyone and would point out different areas of concern. I remember one such meeting where the person presenting had expressed anger towards the fact that they saw a Toyota taxi and that it should be a GM. I get being frustrated but to just make a statement and offer no solution made no sense. As we have seen recently, this is GMs MO. Address a problem but do nothing to fix it or the wrong thing to fix it and bring more trouble forward.

Well this week has brought forward a boat load of trouble for GM. Let’s take a look into the week GM may wish to forget but just like everything else in there history, just acknowledging there are these problems will not fix them.

This week started with Spyker and former Saab boss Victor Muller bringing forward a US$3bn lawsuit claiming unlawful actions and driving Saab into bankruptcy. This must have been a great feeling for Victor, as one can remember the bankruptcy press conference where he was quite frank about the bankruptcy being GMs doing and the little hint of a smile when asked if he would pursue them legally. Anyone who wants to have an idea of how prepared Victor is, need read this article with Just Auto where Victor had this to say:

For his part, former Saab CEO, Victor Muller said: “Ever since we were forced to file for Saab’s bankruptcy in December of last year, we have worked relentlessly on the preparation for this lawsuit which seeks to compensate Spyker and Saab for the massive damages we have incurred as a result of GM’s unlawful actions.

“We owe it to our stakeholders and ourselves that justice is done and we will pursue this lawsuit with the same tenacity and perseverance we had when we tirelessly worked to save Saab, until GM destroyed those efforts and deliberately drove Saab Automobile into bankruptcy.”

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Youngman Considering Their Own Legal Action

Our favorite writer over at Just Auto, Simon Warburton, has posted a very interesting story today about Youngman looking at the possibility of filing their own suit against GM. What a crazy 24hrs this has been. Just yesterday Victor Muller through Spyker brought a 3 billion dollar lawsuit against GM for unlawful actions and now today there is this possible lawsuit to come forward from Youngman. It’s starting to look like a deck of cards falling in on General Motors and one that I think is rightfully deserved.

From the Just Auto article, Lars Holmqvist the former head of CLEPA says:

“Youngman is also thinking about suing GM,” Holmqvist told just-auto from Sweden. “I know that. They have not made up their minds and, of course, they would be encouraged by Victor Muller’s lawsuit.

“I have information. I know from people…they are looking into the possibility. It is obvious because they spent SEK550m…securing the rights to the new platform.”

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NEVS Talking To Unions

I have no idea how I missed this one yesterday, but while checking on all things SAAB/NEVS this morning I came across another great piece by Just Auto. Simon Warburton has a great article there about NEVS talking to unions ahead of a 9-3 recruitment drive.

That’s right, NEVS says they are talking to unions concerning its 2013 9-3 production that will be its first electric vehicle.

This would seem to be very smart on their part to seek out the unions in advance as these same unions had been burned through the administration and bankruptcy. Don’t forget, the ink hasn’t dried on the Saab deal and the deal is expected to be completed next month. I have to say that NEVS is taking things very serious and as much as to all of us, it may seem that nothing is happening, this proves to be far from the truth.

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Just Auto Article On The Swedish Government

For a long time now we have all heard or thought to ourselves that the Swedish Government should have or could have done more to help save Saab. Being in North America and watching what the North American manufacturer’s went through with bailouts and how committed the Government’s in Canada and the USA were to ensuring the continued manufacturing and support of jobs, it’s always puzzled me how the Swedish government seemed to not even recognize what the impact of lost jobs could have. Now one of the editor’s at Just Auto, Simon Warburton has done a good job of covering this with key people involved. Below is some of the highlights of their article.

One view rapidly gaining ground in Sweden is the government could have done more – a lot more – to come to the rescue of bankrupt Saab.

At the end of the day argue the critics, Sweden has lost an icon that is instantly recognisable around the world, with a resulting flight of manufacturing competence out of the country that will be increasingly hard to replace.

I would even add to the above that it would be more than increasingly hard to be replaced, for Sweden, I would say it would be impossible to replace.

But in an auto environment increasingly suffering from chronic over-capacity, does artificially or otherwise trying to keep a failing brand afloat make any sense?

I’ve been in Sweden this week taking the auto temperature, talking to suppliers and politicians, as well as visiting Saab’s windswept and empty plant in Trollhattan. The very firm view expressed to me was that it most definitely did make sense to have done more to save Saab.

Remember that this is not one of us at SaabsUnited saying that it makes sense to have done more to save Saab, this is an independent view of ours and for me it is nice to see a source other then myself seeing it this way.

“The [Swedish] government could have done a lot more then they have,” Trollhattan mayor Paul Akerlund told me in his office.

“When the crisis started in 2008, there was a crisis everywhere in the whole world. Every government tried to find a solution to help their car industries, but our government does not do that.

“They have a very, very strange position. For example [German Chancellor Angela] Merkel is not a social democrat and neither is [French President Nicolas] Sarkozy, [while] the US – the biggest capitalist country in the world helps its car industries.”

Just how big of a problem is all this? Mr. Warburton digs deeper into the jobless rate and impact on the area when speaking to the Swedish unions. To think that the number of qualified worker’s in the auto sector that are unemployed is just unbelievable.

Indeed, Swedish unions tell me of a jobless rate approaching 25%, while workers in Trollhattan related just how hard hard the town has been by Saab’s collapse. Take this from one restaurant-goer in the centre who, when I asked him if he knew people who had been made redundant, he replied: “Just go outside and pick anyone.”

That one line there “just go outside and pick anyone”, that hits pretty hard. I don’t think many of us can imagine or even comprehend what that would be like or feel like. If you look at your home town and think that it’s main industry shuts down and just how badly it hurts everything around it. I personally can’t imagine because where I am we don’t rely so heavily on any one industry. From what I understand of the area, you have shop owners who are struggling to keep their business because people aren’t buying and it goes so much deeper to even daycare providers who have no kids to care for because the families they were caring for are now out of work.

There is obviously substantial fall-out from any bankruptcy but in town the size of Trollhattan and in a country the size of Sweden – population wise – 10,000 newly-redundant workers is an enormous figure.

10,000 newly-redundant workers? In a town the size of Trollhattan, with a population last recorded in 2010 of 55,027 people, everyone knows someone affected. That’s almost 20% of the entire city being out of work. Look up population records for small towns around you and you will be surprised at how a 20% unemployment rate could cripple such a town.

The Swedish government argues it underwrote a huge Saab loan made by the European Investment Bank of EUR400m (US$527m), but this is met by short shrift by Scandinavian supplier body FKG, whose managing director, Fredrik Sidahl, I met in his Gothenburg offices this week.

“The [loan] guarantee – what is the risk?” he told me, adding pithily: “The [Swedish] government did not understand the value of Saab beyond Saab as a company. They [government] are restricted by rules, but they could have interpreted the European rules in a more positive way.”

Intervention is a highly-emotive word – especially when taxpayers’ money is involved. But could the Swedish government have done more, should they have done more to help stricken Saab?

There is a rising tide of opinion they absolutely should have done a lot more.

I think he sums things up quite well and I fully agree that they should have done a lot more and it’s never to late to do something. I tire of governments trying to make it look like they are only doing what they can or are doing everything in their powers when to me it appears they are doing nothing.

The full article from can be found here at Just Auto, it is a subscription site so you may need to register to read it all.

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