Volvo is a step closer to salvation, while Saab is a step closer to damnation.
According to Germany’s Handelsblatt, the European Investment Bank (EIB) has approved a €445M loan to Volvo, after the Swedish government gave a guarantee for 90 percent of the loan. This cash injection should buy Volvo some time to restructure and to pretty-up for a sale. According to Financial Times, Ford has begun seeking indicative bids for Volvo. The sale process is expected to last until late in the year. Three people involved in—or briefed on—the sale say Volvo has drawn tentative interest from at least three Chinese carmakers. Talks have also been held about forming a Swedish-led investor consortium amid concerns among some in Sweden’s motor industry about the possible leakage of intellectual property to China.
Totally different (downright ugly) picture at Saab.
The Swedish government again denied any money. Sweden’s Minster of Economy, Ewa Björling, said, “up to now, we haven’t seen a proposal from Saab that could provide a foundation for support.” Sounds like Björling has compared notes with Germany’s Chancellor Merkel. To the extent that Björling criticized the German Social Democrats who favor the German government taking an equity stake in Opel: “This is on the wrong track,” Björling said.
Even GM Europe chief, Carl-Peter Forster, lost his usual swagger. According to Automobilwoche, Forster said that there are “interested parties but no formal talks” in regards to a partial sale of Opel. To make any deal work, Opel needs loan guarantees for €3.3B, and as for the chances of getting those anytime soon, see above.
The way things look now: Europe seems to be willing to support Ford and Volvo. GM, Opel, Saab, Vauxhall look like dead men barely walking.
From a strictly personal standpoint, the demise of Opel would sadden me terribly. Growing up in Germany, it’s all my father would drive 9and always usually white Rekords!). My aunt had a pristine 1972 Manta that was offered to us upon her death (man, wish my father would have taken that offer up…she left the Manta with maybe 60,000 km on the clock when she passed in the early 90s). It is sad to see that it might go the way of the dodo, but in some corners of the world, it would be missed.
Ford is really doing well as far as getting their shit together, and GM seems to be failing miserably. A year or two ago, based on future product I would never have thought that Ford would be stronger, but they sure look like they are. Even after dumping almost all of the former PAG (and maybe because of it, too) they’re looking better than they have for a long time. If they can get Lincoln to be a true competitor in the luxury segment, they may pull out of this mess while GM takes a giant dump. What a crazy ride this is becoming.
@ Bertel
This is probably more appropriate for your other post, but do you get the impression that Opel hasn’t been a ‘going concern’ for some years and the German Government are aware of it?
I’ve been looking back through various Opel related financial press ex-Germany and can’t find much criticism of them. Some labor relations stuff, but nothing suggesting Opel weren’t a likely profitable division.
Apart from the obvious sudden change in the sales rate, has Opel been in trouble for a while compared to the other native German makers?
Something smells – have GM ripped out all Opel’s money? Maybe the same is true of Saab and the Sweden Government can see it too.
I wouldn’t like any of the three fall apart.
This country is full of Opels… disguised as Chevys: Corsa, Kadett (well not exactly, but the Chevette is its son), Ascona (Monza), Astra.
I’m seeing the latest GM moves and feel myself dissapointed (and I am a GM fan, yes we exist). With those moves, any support they could get, will just evaporate.
@Pete: There definitely is a sudden lack of enthusiasm to support Opel/Vauxhall/Saab.
And there must be a reason for it. Sales can’t be it. From what I’m hearing, Opel Germany is doing fine. The Insignia is flying out of the door.
It could very well be that big questions have been raised when GME handed in their plans. When a government asks you for more and detailed documentation, you know you are in trouble.
“Something smells – have GM ripped out all Opel’s money?”
As I get it, Opels problems are that GM has been draining their profit, transfering money to the states. As long as Opel made money, all was fine and dandy. And as I get it, Opel is in fine shape even now. What it is all about is that GM needs money on such a grand scale, even profts can’t pay. GM can’t afford to let Opel earn money for them. So, essentially, GM sucked the marrows out of Opel, and now they are seeking someoneelse to suck up dry.
Volvo is a real company with real products, a real dealership network and some remaining brand equity. Saab is none of those things. Both are sick, but the triage nurse would certainly tell Saab’s family: So sorry, nothing we can do.
On the broader European situation, Germany should start throwing GM-Opel executives in the slammer. Back home, Madoff is likely to be but the first of many big name, big money guys to find themselves behind bars. Sarbanes-Oxley might start bagging some trophies.
Well now it can be told. I’m the one in talks to buy Volvo.
Upon the next 24 months their line-up will be the following.
Volvo 260 – This will be based on the 2010 Taurus but look stunningly similar to the Classic Volvo 240. A bit more square, plenty of luxury, and a 15 year, 150,000 mile warranty. Prices will be a bit stiff. About $1500 more than a loaded Camry, and the only sales program I’m running for it is a pair of sensible shoes and a lifetime discount at Ikea.
Volvo SUV – Based off the Mercedes G-Wagen which I am planning to ‘acquire’ through China, the interior will feature real elephant skin leather, ivory and the complete works of Wagner.
Volvo Coupe – A design reminiscent of the Volvo P1800 will be complemented by a police battering ram so that it passes all of Volvo’s rigorous safety standards.
Volvo Classic – Finally, all of our older pre-1995 machinery will be assembled in places with fiercely protected markets such as Nigeria, Brazil, and pretty much all of the Middle East. We will trade these cars for oil, straight up, which we will then use to sell in three years time when the price for oil triples.
After all that, I’m retiring and buying myself all the cars in the Volvo museum. My daily driver will be a Volvo 240 made out of hubris and chutzpah.
Hey, I think Congress has been reading my mind!
http://news.yahoo.com/s/nm/20090312/pl_nm/us_financial_congress_2
U.S. House to explore financial crisis prosecutions
WASHINGTON (Reuters) – The U.S. House Financial Services Committee will hold a hearing next week to ask key justice officials and regulators what they need to prosecute wrongdoers in the financial crisis, the chairman of the committee said on Thursday.
I’ve been following Opel for a long time, and it’s been a mostly money losing operation. Market share has been dropping for over decade, and most years, especially the last few, has seen lots of red ink. I will say that Carl-Peter Forster has been doing a good job of continually trying to restructure to reduce costs and improve the products, but its been a difficult environment. He’s the sharpest exec GM has.
I wrote a whole editorial on this, but the TTAC search engine is useless.
Here it is:
https://www.thetruthaboutcars.com/general-motors-death-watch-177-the-world-is-not-enough/