One of Saab’s suppliers, SwePart Verktyg AB, asked a Swedish court to declare a key Saab subsidiary, Saab Automobile Tools, bankrupt today reports Automotive News [sub]. Saab Tools owed about $935,000 to SwePart for tooling, and according to the supplier

More than one week has passed from the summons and payment has not yet been made. Saab Automobile should therefore be considered insolvent… We don’t want them to go into bankruptcy, I wish you understand that, that would be horrible, but we are a small company and for us that is a lot of money

Saab Tools was created to guarantee EIB loans for tooling, so had the “subsidiary” been declared insolvent, the whole ship would have gone down. But before a judge could act, Saab somehow managed to put out the fire, as a company press release proclaims

Swedish Automobile N.V. confirms that Saab Automobile Tools AB reached agreement on payment terms with the supplier that filed for bankruptcy, thereby resolving the issue.

Once again, Saab pulls the fat from the fire at the last minute… but the clouds are dark and rolling in fast. Many suppliers are still looking for money, Saab Automobile has 104 claims pending against it, and SwePart’s bankruptcy request won’t be formally withdrawn until Monday. And with the Swedish government and EIB seemingly unwilling to lift a finger to help, even the faithful are losing hope. This feels like the beginning of the end of the end…

Almost two months ago, Saab was able to restart production after Gemini Investment Fund extended a €30m six-month convertible loan to the struggling Swedish automaker. Now, after another shutdown, it seems that Gemini has once again ridden to Saab’s rescue, as the company announces another six-month convertible loan from Gemini.

Swedish Automobile N.V. (SWAN) announces that it entered into a EUR 25 million convertible bridge loan agreement with Gemini Investment Fund Limited (Gemini), thereby securing additional short-term funding.

SWAN entered into a EUR 25 million convertible bridge loan agreement with Gemini with a 6 months maturity. The interest rate of the loan is 10% per annum and the conversion price is EUR 1.38 per share (the volume weighted average price over the past 10 trading days). SWAN may at any time during the loan’s term redeem it without penalty and it intends to do so once the funding from Pang Da and Youngman is received, in which case no dilution as a result of this bridge loan will occur.

Attention Chinese, Swedish and European Investment Bank regulators: you’d better cut through that red tape and approve the Pang Da and Youngman investments post-haste, or Saab will be back in the drink when these short-term loans mature. After all, hasn’t Valdimir Antonov been waiting for approval to buy into Saab since.. oh, 2009?

Read More >

Saab has reached a deal to sell 50.1% of its real estate holdings to a consortium led by Hemfosa Fastigheter AB, for about $40m, and has also received an order for $18.4m worth of vehicles from an unnamed Chinese firm according to AN [sub], giving the dead-alive Swedish firm the faintest, cruelest glimmer of hope. The real estate deal was for about a third less than the property had previously been valued at, and still needs to be approved by the Swedish Debt Office, the EIB and GM. Meanwhile, the real struggle is ongoing, as a Saab spokesperson tells Reuters that

Today’s news takes us a good way in the right direction, but it is the agreement (with suppliers) that matters and only then will we be able to communicate a date when we can restart production

But suppliers aren’t even the first in line for Saab’s much-needed cash injection: that goes to workers who are promising to take the company into bankruptcy if they aren’t paid soon. These two recent deals should be enough to pay worker salaries through July, but if suppliers aren’t brought back as well to restart production, the bulk sale and an earlier order from PangDa will never be filled. And those suppliers are currently mulling over an offer of ten percent of what they are owed until the Chinese inject more cash later in the year… not the greatest deal ever. Meanwhile, Saab says

There are other initiatives still being pursued. There is not much we can say about that until we have something concrete to communicate

Like what? What could there possibly be to communicate?

Read More >

It seems like only yesterday… New Ferraris were in such demand that it was possible to make six-figure money in some markets merely by taking delivery of a new F430 or F599 and selling it later that day. Meanwhile, that unspeakably crass reanimated Italian psuedo-luxury watch brand, Panerai, had waiting lists chock-full of suckers waiting to pay five, ten, or fifteen grand for a watch with the same amount of technology and craftsmanship as an $899 ORIS.

Three or so years ago, Ferrari ditched staid old Girard-Perregaux for sexy new Panerai. The not-so-special editions flowed like sweet nouveau glacial milk and the “punters” lined up in droves. This was the marriage of true brands, to which no man may admit an unprofitable impediment.

As of today, the party’s officially over. Welcome… to the bargain bin.

Read More >

As an automaker and union-funded think tank, the Center For Automotive Research often run afoul of TTAC during the bailout debates of 2008-2009. CAR is to Detroit’s apologists what CAR has long maintained that a failure to bail out GM and Chrysler would have resulted in the total destruction of America’s entire industry, and based on that questionable assumption, it’s latest report [PDF] is claiming that the auto bailout saved the federal government $28.6b over two years. The study is an update of a report CAR issued in May which

produced estimates for two scenarios, as well: a quick, orderly Section 363 bankruptcy (which is what happened), and a drawn-out, disorderly bankruptcy proceeding leading to liquidation of the automakers.

Because those were the choices. A messy, marginally-successful intervention (with demand for GM’s IPO “through the roof”, the firm will still be worth only about what taxpayers put into it) or utter complete annihilation of the industrial Midwest. But if, as CAR takes as gospel, a halfway “normal” restructuring weren’t an option, it was only because the managers of both GM and Chrysler refused to even contemplate the possibility of a bankruptcy filing until it was far too late. And here’s where the long-term impacts get scary: by taking GM and Chrysler under the taxpayer wing, the Government may have saved some money in the short term, but it created a dangerous precedent for the future. Given the events of the auto bailout, why would the leaders of any other failing industry take the difficult path through restructuring when, with the help of think tank apologists, they could simply collapse into a publicly-funded do-over?

Read More >

Ohio Republican Reps LaTourette and Boehner have officially requested that President Obama suspend GM’s dealer wind-down agreements until the Special Inspector General for TARP (SIGTARP) completes an investigation of the government-approved GM and Chrysler dealer culls. The representatives focused on the fact that SIGTARP’s initial report on the dealer cull, which had criticism for GM, Chrysler and the government task force, wasn’t publicized until after arbitration for culled dealers ended. WKYC quotes the representatives’ statement as saying

There is too much at stake to proceed in an atmosphere where dealers were denied so much crucial information in a process rife with secrecy. As the findings of this investigation may shed much needed light on the proceedings affecting hundreds of dealerships nationwide, we believe it is necessary to thoroughly analyze its results before continuing with the closures of hundreds of dealerships, and the potential loss of thousands of jobs.

And Republicans aren’t alone in urging a halt to wind-down proceedings pending the SIGTARP’s latest investigation… Democrat Dennis Kucinich has already staked out the position now occupied by the House Republican leader. And did the artist sometimes known as “Government Motors” blink in the face of bipartisan pressure?

Read More >

Back in July, the Special Inspector General for the TARP program (SIGTARP) released a damning report on GM and Chrysler’s efforts to cull dealers during their government-overseen bailout-bankruptcies. The upshot: GM and Chrysler handled the culls either inconsistently or subjectively, and the President’s auto task force pressed the issue unnecessarily and “without sufficient consideration of the decisions’ broader economic impact.” And though that report, the product of a year’s worth of investigation, made the automakers and their government “saviors” look mighty stupid, the awkward walk-back of most of the dealer cuts had already made the point fairly well. But with the TARP program now largely rolled up, the SIGTARP’s office has been bulking up on investigators, targeting fraud and criminal activity around the entire TARP program. And, according to Automotive News [sub], the dealer cull is on the agenda. SIGTARP won’t “disclose the targets of the investigation or the actions being probed,” but it has “opened a follow-up investigation of possibly illegal activity in the [dealer-cull] effort.”

Read More >

With GM repositioning its IPO to target US retail investors, we find ourselves motivated to once again sound the alarm about one of the major drains facing The General’s taxpayer-provided cash pile: the restructuring of its European Opel division. Opel slated its Antwerp, elgium plant for closure earlier this year, but at the time GM was trying to find a buyer for the plant. In May we noted that automotive overcapacity on the continent made finding a buyer for Opel Antwerp a tall order, and sure enough, Bloomberg reports that a buyer has not been found. What Bloomberg leaves out of its write-up: GM is now stuck with the €400m ($530m+) bill to pay off all those unemployed workers. A half-billion here, a half-billion there… soon you’re talking about real money.

One year ago today, General Motors took the “unthinkable” step of filing for bankruptcy. It was a seminal moment in the history of the American auto industry: the day that once-dominant GM finally shed its illusions, faced up to reality, and plunged into the cold, cleansing waters of bankruptcy reorganization. Or, to use a more accurate metaphor, it was pushed in. After decades of decline masked by decades of PR-driven denial, GM had literally lost the ability to self-correct.

Read More >

Automotive News [sub] reports that 19 rejected Canadian GM dealers have been given the green light to sue GM as a class, rather than go through the arbitration process that is being used to resolve dealer cull disputes in the US. The dealers are suing GM for breach of their dealer agreements, and for failing to provide compensation beyond wind-down costs. They argue that the arbitration process would be expensive for dealers, non-transparent to the taxpayers who funded GM’s reorganization, and would put GM at an unfair advantage.

Read More >

Having laid into GM today for trumpeting a government loan repayment, it would be churlish not to point out that, by Detroit standards anyway, GM’s “partial refund” is actually kind of a big deal. Take today’s news from the nearly year-long liquidation of “Old CarCo,” the poisoned (in some cases, literally) remains of what was once “Bad Chrysler.” Bloomberg reports that the US Treasury’s $5b line of credit has been placed in the “unsecured” category of Old CarCo’s last debts, meaning recovery is “undetermined.” As in not so very likely at all.

Read More >

So, how do you spin the bankruptcy of the world’s largest automaker? Former GM spinmeister Steve Harris recently took an hour to help prepare future generations for the day when they too will have to soft-pedal the inevitable collapse of their very own lumbering giant employer. Bonus revelation:

[the presidential task force was] very interested in what we were doing from a communications standpoint, but I can not say that they really exerted much control at all. Once or twice they said “we would really like it if you add this message or this communication into your plans,” but it was really minimal. It was not overbearing at all.

Details?

When I met Uwe Gemballa the first time, he looked like he could be the manager of the local strip club down the road: Shoulder long bleach blond hair, a flashy watch, a suit to match the watch, the shirt unbuttoned down to the chest. I then found out that he had brought a Porsche 911, that made upward of 750hp, to a friend of mine, to make it street legal. Gemballa had one of the hottest tuner shops in Germany. His mods to the Porsche Cayenne produced the fastest SUV in the world – at least that’s what Uwe told me. Last I heard from him was some two months ago. He wanted to import Gemballas to China, and could I help him? Then it became quiet. Now I know why. Read More >

The Colorado House’s passage of HB-1049 [PDF here], a bill requiring restitution for dealers culled during the Chrysler and GM bankruptcies, has drawn a $60,000 “no” campaign from General Motors. The Denver Post reports that GM’s ad campaign, which features lines like “we must keep driving forward to repay our government loans,” and “don’t let special interests stick taxpayers in reverse,” has riled up local lawmakers more than ever, drawing such timeless put-downs as: “they must be spending tax dollars on Botox to say that with a straight face.” The bill would require OEMs compensate culled dealers for signs, parts, dealer upgrades and more, as well as offer them the right of first refusal for any new area dealerships.

Read More >

Here’s a question: You want to do something, but it’s against the law, what do you do? Abandon the idea? No, if you’re Chrysler you sue the government. Detroit News reports that Chrysler LLC are suing officials from Oregon, Maine, North Carolina and Illnois for laws which “unduly burden New Chrysler with the obligation to provide the rejected dealers with rights that this court determined that the rejected dealers do not have,” as lawyers for Chrysler wrote.

Read More >