Excited about the new Saab 9-5? Saab has put up a count-down timer on their homepage, for those in need to see exactly how far away the official unveil will happen. Meanwhile, the deal is still, as I wrote earlier, uncertain to say the least.
With Christian von Koenigseggs’ clever statement to the press; expressing his thoughts around the missing money, suggesting a split between GM, Koenigsegg Group and the government, the entire negotiations have been moved to the media, which probably was CvKs intentions, hoping this would put extra pressure on the government. And sure enough, it has annoyed some ministers, causing the Swedish Prime Mininster, Fredrik Reinfeldt, to exclaim at a press meeting: “I am not prepared to pledge Sweden to take capitalist risks for its advantage.” When the Saab-question came up at the press meeting, he was clearly annoyed, stating:
I note that some are trying to change the order of how companies should be dealt with in Sweden. Firstly, the purchaser does not use enough of their own money. The venture capital and credit market, which is becoming better will not withstand. So all of a sudden, the largest venture capitalist become the state, as if welfare money is to go in and take risks that no one else wants to take.
Industry Minister Maud Olofsson (C) voices the same message. “Usually there are sufficiently enough money when a private company buys a private company. There are indeed some private capital available, and it is up to owners to get it,” she said to Swedish newsagency TT on Wednesday.
Social Democratic (the Swedish opposition party) economic policy spokesman Tomas Eneroth is critical of the governments reluctance, contrasting:
The government must make efforts to find a solution, otherwise jeopardizing both jobs and prosperity. The jobs of 4000 at Saab, the 8000 employees among suppliers and a few thousand in the service sector disappears. The government has opted for ideological reasons not to act. It is the ideological blinkers I criticize. In other countries the State is endeavoring to save jobs.
So the question remains: Are Saab worth saving? Should Sweden contribute a measly €300 million to save Saab, whereas the Germans are reportedly willing to inject €4.5 billion into the Opel-Magna deal? What about GM? How much are they willing to risk? Clearly, there’s a lot to be solved, and these negotiations have just started.
[UPDATE: The figures listed at the end of the article were incorrect and have been changed to the correct ones.]
I don’t think there is a business case for Saab, with regulations and such niche automakers (excluding ultra-luxury and/or super car makers and even most of those have been absorbed in some way) cannot survive. And thats all Saab ever really was. If however long ago, BMW had bought instead of GM and kept the quirks that made it Saab (positioned below BMW), Saab might have survived and even prospered.
Fascinating that one of the most heavily socialized nations is balking, while one that’s pathologically terrified of socialism (to the point where people are having conniptions in meetings about health care) it is shovelling dollars at private enterprise.
Not that I endorse one or the other, but the incongruity is funny.
psar: my thoughts exactly
I think that the key difference is that one country pays for its socialism while the other doesn’t. Alot of those people having conniptions are on medicare, suggest that is taken away and watch them have a different type of conniption. Everyone loves the benefits and infrastructure the governement (country) provides yet no one wants to pay for it (I think that’s the socialism that everyone is terrified of, actually paying for it).
“Are Saab(worth saving)?” Are there many Saabs, or is the only one of a plural(-istic) persuasion?
That being said, the Swedish PM is apparently more clear-sighted than Mr. Royal Egg. I can’t see any business case for Saab; their minuscule volume leave them no chances to compete in the mass market, and their lack of financial resources leave them limp against the likes of BMW and Mercedes in the beyond-mere-transportation market. The only business case is the one designed to suck as much milk and honey out of government coffers as possible. Bricklin, DeLorean, anyone?
The deal with GM stipulates that Koenigsegg will buy Saab with money they do not have, and they are asking for that money through the Swedish government, to the tune of 300 million euros, not threehundred thousand. Koenigseggs could only come up with a stake of 6.5% of the money needed, hoping that the Swedish government, GM and the European Investment Bank would back up the rest. Extortion through media, it seems…
Ingvar: “extortion through media” or looking for cheaper capital.
Costs a lot less to borrow from Sweden than it does to borrow privately, especially considering the level of risk involved.
What’s the point of saving a niche brand with very little product that struggles to sell over 100,000 units per year? They’ve never been a major player in the auto world, and I certainly can’t see a tiny niche builder of supercars making Saab a viable force in the marketplace. Saab was starved for too long by GM, not getting enough unique product to sustain the brand and establish it as a true luxury marque. Saab just needs to die, there is no point for anyone to piss more money into it.
As a former 9-3 owner, and really a fan of the mark, I’d like to see Saab survive. But what I’d like is irrelevant. If I were betting (investing) my own money, I’d never take the gamble. Better just to enjoy fond memories of an interesting but quirky car (while trying to forget the cost and general frustration associated with those memories).
According to the Swedish government, Koneigsegg doesn’t have a business case. A private company can not buy another company with only 6.5% of their own money, hoping the government will bend over for 93.5% of the closing sum. That’s just not how business are done.
More Saab-related news from Sweden. Saab sales in July are down 70% since last year. Only 79 cars could find their home in private buyers hands. Including fleet sales, the numbers are 326 cars for July, which makes Saab selling less cars than Fiat, traditionally a small seller in big car oriented Sweden…
i’d like saab to stay. make the 9-1, make it a mini competitor, not many players in that niche, just the mini, miTo and fiat500. and the suzuki swift as a cheaper option. it could work.
make the 9-4x it’s promising, but dont water it down, keep the styling as close as possible to the concept. keep the lines simple, clean, make it airy with alot of white colors. i love those white taillamps on the saabs. looks very unique.
the new 9-5 (leaked pics) looks already old, and uninteresting. skip one generation, concentrate on the…
…new 9-3, make it a mercedes cls competitor, make it coupe first -> better looking coup and cabrio, afterwards addapt it to a 4door.
partner up with suzuki, coz suzuki has quality manufacturing, what saab needs in order to stay competitive. as for suzuki their line up can COMPLETELY die off, and they could sell SAABs
in whatever market they are especially asia and russia. suzuki will improve its image too, dumping that horrid XL7 and others.
and/or partner up with Range Rover, they need a car-line. well saabs could sell besides range rovers, they dont compete between each other, and are premium marks.
but those above are my wishes. if they do as told, they might have a chance. otherwise…
the reality…
yea, saab will die off.i crunched some numbers (sure im no automotive exec expert, but i might not be that off):
4,000 employees x 2,000 euros/month = 8 millions
and lets say that’s half of the total running cost
the other half is payments on the factories, land, taxes, energy consumption, water blablabla
total running cost lets say 15million/month.
so its 180 million for a year, or they got less than 2 years to burn thru those 300 million.
lets round up: full 2 years.
but! where’s the cost for the repo matierials, parts etc.. money paid to the suppliers n stuff?
if they dont have the sales, and the investers already lacking the money to cover for bad times, i think tthis will never work.
“The Swedish trade minister, Maud Olofsson suggested the company had a brighter future moving to production of wind power turbines than continuing to produce cars in an already oversupplied market.” @wikipedia
besides all said, the swedish gov set a plan to become oil-independent by year 2020. no way owning a car company fits into that. saab might as well build trolleycars/trams or monorails.
i’d like saab to stay. make the 9-1, make it a mini competitor, not many players in that niche, just the mini, miTo and fiat500. and the suzuki swift as a cheaper option. it could work.
Not to many people buy these cars in the US and in Europe you have the Ford Ka and VW Polo to compete against plus those mentioned above (I know the Ka is a big seller, would imagine that the Polo is as well).
partner up with suzuki, coz suzuki has quality manufacturing, what saab needs in order to stay competitive. as for suzuki their line up can COMPLETELY die off, and they could sell SAABs
in whatever market they are especially asia and russia. suzuki will improve its image too, dumping that horrid XL7 and others.
Suzuki is the second largest automaker in Japan and the largest in India (they should exit US and EU, not build Saab clones)
and/or partner up with Range Rover, they need a car-line. well saabs could sell besides range rovers, they dont compete between each other, and are premium marks.
Its call “JaguarLandRover” for a reason (they make Jaguar)
@rnc
no, the KA and the Polo arent competition to the mini/suggested 9-1. KA/Polo are cheap small cars, mini/fiat500 are trendy/hip/fun to drive small cars.
and saab could leave the US market completely. too many sharks and the pond will get smaller.
you’ll see.
suzuki can sell what the hell they like in India, its not like they are style-concious with their tata nanos. the SX4 is prolly an awesome design 2 the hindus/pakis.
and as for the japanese, they’d gladly take an euro brand for the same money as suzukis.
sure @jaguar, now explain how do a mini 9-1 and a stylish 9-3 compete with performance jaguars? as i said, they ought to drop the 9-5, and no overlapping there. and sure, saabs would sell cheaper than the jags. like vw-audi relationship wise.
but hey, as i said, those were my wishes. not reality.
The Swedish government needs to worry about Volvo’s future (many more jobs at stake) not Saab’s. Saab should have merged with Volvo years ago, when they had the opportunity and turned it down.
Ingvar, you’re right – there’s been shaved off 3 zeros on both Saab and Opels estimates at the end of the article.
It’s 300 million euros in Saabs case, and 4,5 billion to Opel.
My bad!