Now that’s its all over bar the shouting (Saab has filed for the Swedish equivalent of bankruptcy), the shouting begins. Saab’s new owners (themselves) say they need $1B to stay in the game, and they want GM to pay it. (Reparations?) Automotive News [sub] reports that GM is willing to surrender a big chunk of your taxes to cut bait and [Swedish] fish. But not a billion. “GM Europe’s head of communications Chris Preuss said GM was prepared to provide some funding for Saab but the brand needed outside money as well.” And who in their right mind would provide the lion’s share of this IV drip? “We have asked the Swedish government for loan guarantees for $600 million to give Saab a balance sheet as an independent unit which will allow it to continue.” The Swedish government has said no. So Saab is hitting up the European Investment Bank for a €500m loan. So . . . now what?
GM’s support would also extend to the development costs and tooling for the new 9-5, 9-4X and 9-3X, which will launch in the next 18 months.
GM will also continue to provide technical support to Saab in the future and provide parts through licensing agreements, Preuss said, but there were limits to the support GM would provide.
Preuss said: “[GM President] Fritz Henderson made it very clear that GM will be out of Saab one way or another by the end of this year.”
What’s the bet Saab will be out of business by then?
Companies live and die, it’s time for SAAB to die. I feel bad for all the workers who will loose their jobs and the suppliers who will not be paid. But is SAAB even relevant today?
It’s funny to see the assumption by TTAC that filing for reorganization is the last gasp before the inevitable death of Saab — hasn’t TTAC been pushing GM to do the same thing as a whole?
It’s a reorganization, not a death sentence. Something like 75 percent of Saab’s outstanding liabilities are owed to GM. (And it’s likely that part of these liabilities are an accounting exercise by GM, an effort to push debt off on to a foreign subsidiary thereby making GM NA not look as bad — apparently Opel has the same problem on a larger scale).
Saab will not have to carry the dead weight of all of that GM debt, nor will it have GM executives constantly mucking up the brand.
It’s entirely possible that an independent Saab will fail in this terrible car market.
But at least Saab will have a fighting chance, on its own terms, and not drown because GM tied its arms behind its back.
Free at last, free at last.
@carm: I disagree. Saab had been a great brand and all it needs is to return to its cult brand status. If they can find a way to survive the current crisis that is not impossible.
They need to be happy and profitable selling 50-100k cars a year. That means focusing on 1 or 2 models, and leveraging as much technology-sharing as they can without losing their identity.
Honestly, Saab doesn’t need to invent new engines or new suspensions – their identity used to be about the uniqueness of the whole package.
Not too many years ago, Sweden did a brilliant job of saving its banking sector by nationalizing the banks, putting them on a solid footing and then slowly turning them back into publicly owned companies. ( http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html )
Sweden could do the same today with Volvo and Saab. Sweden is a better country thanks to its automotive industry than it would be without it, and the world is a better place thanks to the influence Volvo and Saab have had on the automotive industry.
The original Volvo company (presently w/o Volvo Cars) is the world’s second largest truck maker (after Daimler-Benz). Clearly a relatively small country like Sweden is in fact able to compete in large globalized manufacturing.
Just Do It Sven!
Saab will go the way of Rover unless the Swedish government is willing to pour money into it forever and ever.
Of course, GM and Chrysler will also go the way of Rover unless the American government is willing to pour money into them forever and ever…
The problem with that, John Horner, is the economical viability of supporting Saab as long as it takes to turn it around, and if that injection of money costs more than supporting the people involved in other ways. In the bank case, there where economical assets that eventully was made bankable, making the government able of selling the nationalized banks for profit. The collateral was some half a million bank loans for housing in Sweden. In the end, the taxpayers got their money back.
With Saab and GM, their liabilities are far bigger than their assets. Even before an eventual governent takeover of Saab, there’s billions and billions of dollars in hidden costs just for a reconstruction. To make Saab a stand alone profitable competable car maker of its own would take tens and tens of billions of dollars. In the end, if the Swedish government goes that way, the taxpayers may never get their money back, no matter how successful Saab may be.
In the end, it is a matter of how much money it is worth supporting Saab. And as it is now, the Swedish government just don’t see any money in it. Not now, not any day.
The bigger issue here is where did you find a picture of a pic of a suburban rugrat hauler in the mud?
What is the point of SAAB? Seriously if they cant sell in the biggest car market in the world, why fight the inevitable? Their cars dont lead in any recognized, quality or reliability tests and arent even on most people’s radar for purchase. Just another quirky front wheel drive platform, no niche even? Companies dont sell profitable or even potentially profitable business units, they sell the bad ones.
You are probably right Ingvar, I’m at risk of turning into a sentimental old fool. Saab didn’t need to end up this way. GM has destroyed so much.
Maybe Volvo has a chance at survival if Saab is put down, much as ending the sad Chrysler saga could be necessary for Ford’s survival.
Per Reuters, Saab, from date of filing for bankruptcy, apparently has around 3 months to find additional funding. So we should know the final ending by May, including whether or not Saab will continue, expand or curtail sales in the USA.
FYI, as of this writing the Saab.com and Saab.usa com sites appear alive and kicking. Saab Global is showcasing the Saab 9-3X, the car the Mailbu Maxx might have become, but never did.
There are very few ‘affordable’ European brands in North America that have a truly wonderful European design. Volvo had it. Saab had it. VW kinda had it. That’s been about it for the North American market.
The trouble right now is that virtually no one can make a profit. The overproduction and overcapacity in the global automotive market has become so horrendous that only a series of liquidations will ever cure it.
In fact, I would go so far as to say that most automotive companies have become de facto welfare recipients from their respective governments. Whether it’s by bailout (we know those folks) or outright protectionism (China and South Korea), the end result is the same.
The easy way to cure this would be to liquidate Chrysler, let GM and Ford restructure through bankruptcy, and kick out Hyundai since their influence in the South Korean government has effectively cut off access to American competitors. I personally wouldn’t be surprised if the Genesis is being sold at a loss, even at MSRP, in order to gain marketshare.
Unfortunately, the worst Hyundai in this market is still a far more competitive model than the best Saab. So for right now, the worstest shall die quickest.
Many of you here at TTAC have probably (not) missed my insightful comments regarding this issue. It’s a sad day to see this brand go away. GM played a big part in seeing this go bad. I would pinpoint that overall the mistake (disregarding WHO’S at fault) lies in branding. Noone ever decided “this is what Saab is” and built those cars.
In US and Germany they was bought by nonconformists. In UK because they were scandinavian (cool). In Sweden they were bought because they were perfectly matched in size, power and price for what the enormous* middle class wanted. And Sweden still held a large part of Saabs sales, and it’s HQ.
So how do you build a car for all those different persons? On a very tight budget from GM giving you over 12 years for a model cycle (in 2009!)
How do you build a brand for those very different persons?
It would have taken a very strong combination of owner and leader** to point out a clear future. There wasn’t one. The Wallenbergs could have been the one, but they had so many other companies to run – and perhaps lacking the total will and commitment – so they choosed not to.
There often are very few ways to do a thing right – and many to do it wrong.
sad sad sad …………
* Sweden has a rather small upper and lower class, the middle class is HUGE.
** Why do you think Germany and Japan is so good at automobiles? And I mean this with deepest respect to those coutries and their people (and those who died when they joined hands and did bad things 70 years ago).