Sweden’s Dagens Indudstri, the financial paper most hated by the Saab faithful, has dug up another interesting twist in Saab’s concentric circles around the drain: There is one party that is checking daily whether Saab has finally gone belly-up: The consortium of real estate developers that a month ago bought 50.1 percent of Saab’s land, factories and improvements for around $40 million.
This was considered about 30 percent below market. Nevertheless, a lot of people doubted the sanity of the consortium, which is backed by a large Swedish insurance agency. After all, the tenant is Saab, and with its current references, the company would have a hard time renting an apartment in downtown Stockholm. Dagens Industri just found out why the consortium is quite happy with its distressed tenant: If Saab can’t pay the rent, the consortium gets the whole shebang for no extra money. Read More >
Saab has already warned its workers that paychecks due tomorrow could be delayed until “committed” funds from investors arrive, but Bloomberg reports that the warning may not be enough. According to the report
Any delay in the August payments will prompt the unions immediately to start a process aimed at ensuring state coverage of wages in the event of the carmaker’s failure, officials from the IF Metall and Unionen labor groups said. The unions, after gaining employees’ backing, would first file payment requests with Saab. If salaries remain unpaid in seven days, the unions may then ask a district court to declare Saab bankrupt.
That could put Saab into bankruptcy in as little as two weeks. Saab’s long nightmare seems to be drawing to a close. Read More >
With debt collectors closing in on all sides, Saab’s shaky PR took another hit today as the Swedish media repotred that members of the board of Swedish Automobile (SWAN), Saab’s parent company, received pay increases of some 633 percent over 2010. Thelocal.se reports that
New chairman of the board, Hans Hugenholtz, received a raise of 633 percent, from 147,150 kronor (about $23k) to 611,163 kronor (about $950k). Others also had their pay increased significantly.
Though the amounts are relatively small, and the dwindling ranks of unquestioning Saab supporters argue that the compensation is low compared to the Dutch average (SWAN is incorporated in The Netherlands), this is just the latest PR disaster to hit the struggling automaker. One Saab employee sums up the mood:
It feels like everyone is out to grab what they can get.
And no wonder they feel that way. Not only did worker paychecks arrive late, but Sweden’s national debt office has begun foreclosing on the first of its outstanding claims… and the initial amount (about $58k) could have been covered by the chairman’s pay increase alone. Sending the message that board compensation is more important than staying out of insolvency has to be some of the worst PR imaginable. Still, some will defend Saab no matter what… Read More >
Bloomberg BusinessWeek reports that Saab has to pay some $620,000 today in order to keep Sweden’s Debt Enforcement Agency at bay. Should Saab fail to pay suppliers Kongsberg Automotive and Infotiv within the next 24 hours, Swedish Debt Enforcement Agency officials say
The collection process that may start tomorrow would include investigating Saab’s bank accounts and potentially also other assets.
Assets will be frozen while Saab’s worth is assessed, a move that would essentially end the existence of Saab as it currently (barely) exists. Saab spokesman Eric Geers says
We’re of course totally aware of this situation with the collection agency, but I can’t comment on what we’re going to do,
but other than pulling out from the Frankfurt auto show in order to focus funds on restarting production and selling another tranche of value-diluting shares, Saab hasn’t done much to respond to the latest crisis. And with another $795m due to suppliers in “about a week,” time is slipping away. Luckily for the True Believers, there’s still a shred of hope-against-hope to hang on to, as Saab’s PR man Steve Wade says something called “The Deal” is in the works.
Does the world need another luxury car brand? Hold up, let me rephrase that: does the world need another $250k luxury crossover with a new brand that sounds like a bad Infiniti knockoff? Well, whether we need it or not, it’s coming… and from Britain, not China! Or maybe it does? Read More >
Munich, Germany, to St. Moritz, Switzerland. It can be a scenic afternoon ride. The nicest route, shown here would take you very leisurely four hours these days. Before the car was invented, it would have taken a few days and a lot of real horses. How about with pure plug-ins? 31 participants embarked on a plug-in rally from Munich to St. Moritz. It started on August 1. It ended on August 5th. Yep, five days. When I was young, I did that in two easy days on a bicycle. The electric cars took the better part of the week. Read More >
Good news for Opel workers: They could all get Chevys, and GM CEO Dan Akerson won’t sell them down the river, to China, to Korea, or god forbid to Wolfsburg. “We would never give Opel away. Opel contributes to our global size and is not for sale, end of discussion,” Akerson told Germany’s Financial Times Deutschland. An unambiguous statement. Opel workers would have loved to hear it a bit earlier. But better late than Hyundai.
Akerson had more news. Some good. Some, well, you decide … Read More >
Just three weeks after Saab narrowly avoided being pushed into bankruptcy by supplier SwePart, SvD.se reports that three other suppliers have now initiated the bankruptcy process by requesting that Sweden’s national debt bailiffs pursue their debts. One Spanish supplier is reported to be foreclosing on €2m ($2.8m in debt), while two of the rebelling German firms are said to be owed at least €5m each. And though Saab says it is meeting with the Spanish firm to try to hammer out a deal, SvD reports that four of the 14 outstanding claims against Saab have run out of time. Lars Holmqvist, head of the European Association of Automotive Suppliers argues that, by paying some suppliers and not others, Saab is de facto bankrupt, and that a trustee should be brought in to pay suppliers in order of priority, rather than order of Saab’s necessity. Meanwhile, Saab CEO Victor Muller has been in Brazil and the US, trying to bring new investors on board, as its Chinese funding won’t be approved for two-to-three months, if ever. Meanwhile, “taxes and fees” must be paid by Friday, August salaries are due in just two weeks, and Muller cut his latest money-raising trip short to reassure workers back in Trolhättan. But according to thelocal.se, even the most optimistic of union leaders hope Saab will have a new CEO soon. Do I hear the fat lady warming up her vocal cords?
With Hyundai’s eye-catching “fluidic sculpture” design language working its way through the lineup, the Hyundai Elantra Touring was starting to look like the sensible but homely middle child of the family… according to my guide to codger-friendly pop culture references, the Elantra Touring had become something of the family “Jan Brady” (whatever that may have been). But as Michael Karesh found in his recent review, the Touring model, which is sold in Europe as the i30, is something of a hidden gem, as
no other car offers a similar combination of crossover functionality and hot hatch driving enjoyment.
And now that it’s joining the family at the fluidic sculpture salon, the new Elantra Touring brings some style to the table as well. Look for the new model to debut at the forthcoming Frankfurt show, and hope along with us that it’s new-found good looks don’t change its fun-meets-function personality.
Saab is living off charitable donations and newly issued stock to allow its workers to live from paycheck to paycheck while doing nothing. Over at the Blog of Good Hope every little donation to the cause is praised as the Final Deliverance. According of a Blog of Good Hope post, representatives of the Chinese savior Pangda are in Trollhättan this weekend. One of the questions undoubtedly will be “how long, how much?” Or in the language of venture capitalists “how long until we run out of runway?” Read More >
Mercedes-Benz is currently trying to recapture the number one position in global luxury sales, but a quality problem on its home turf in Germany seems to be undermining confidence in the brand. Autobild reports that the M272 V6 and M273 V8 engines used a sintered steel timing chain gear made of various materials starting in 2004, but switched to conventional steel in 2006, eliminating the problem with gear wear. The problem: nobody seems to know how many vehicles built between 2004 and 2006 are affected. Mercedes claims, based on secret internal defect tracking, that one percent, or about 1,500 vehicles, are affected. If you have a vehicle with one of these engines built between 04 and 06 and your check engine light comes on, Mercedes encourages you to visit your M-B dealer rather than an independent shop, as Mercedes is offering free repairs to affected customers. And as Autobild’s Matthias Mötsch argues, when your motto is “the best or nothing,” the only answer to a situation like this is to fix 100% of the defects for free.
I will be moving to Poland with my wife and baby son in July. We will need a car, and trying to calculate value is tough for me, knowing very little about the Polish market.
I don’t know how much we intend on driving, but probably the occasional couple hundred mile trip on the weekend. I would like to keep my purchase price below 5,000 dollars and have something that is easy to fix where I can maybe take it to the guy down the street who operates out of his house’s garage, and not be too afraid of the guy not being able to get parts, not having too many special tools, etc.
The other aspect of European cars is the use of natural gas. It looks like “lpg” is big in Poland as many of the cars I checked out on allegro.pl have the natural gas option. Does this add to the complexity of maintenance? Will this provide more value per mile than a diesel engine?
The car has to be relatively safe, and a wagon with the room would fit our style as a growing family. There seem to be a lot of 10+ year old German cars that can be had pretty cheaply (allegro.pl). So far I like the Mercedes and BMW wagons from the early nineties. But something tells me that a 5 year old Honda Jazz would be a much smarter choice even if it might cost more upfront.
As far as manufacturer PR reps are concerned, there’s nothing worse than an automotive media outlet that’s willing to criticize a car. But when the unthinkable does happen and, say… I don’t know, Consumer Reports fails to recommend a new Civic, at least there will always be another publication that backs up your opinion. And, in the midst of unprecedented C-segment competition, Honda’s Executive VP for sales John Mendel trotted out this very approach recently. In an email to dealers that was obtained by the LA Times, Mendel wrote
Sometimes you disagree even with those for whom you have the greatest respect. And it seems as if that is what has occurred with the Consumer Reports review of the 2012 Honda Civic LX. We fundamentally disagree with their suggestion that Civic doesn’t rank among their recommended small cars…
Among many other very positive reviews of the Civic lineup, Motor Trend magazine recently tested eight compact cars, including Civic. The respected auto enthusiast magazine -– which knows a thing or two about ride and handling –- ranked Civic second among eight compact cars in the comparison drive. Many would be thrilled with this result. However, we disagree with Motor Trend as well –- we think there is no better compact car than Civic.
Luckily Motor Trend’s staff empathizes… they wish they could have given all the cars first place! And what about Car & Driver giving the Civic second place in its comparison… of two? In all seriousness though, Honda needs to check itself for signs of bunker mentality. Yes, Mendel’s responsibility is sales not product development, but creating an insular world where critical opinions are ignored and feedback is cherry-picked for the rosiest possible picture is bad for the long-term culture of an automaker.
Compare this approach to that taken by Honda Europe. It’s previous generation of Europe-only Civic (FK/FN) was widely criticized in the press for its poor-riding torsion beam rear suspension, lack of refinement and dynamic failings. With a new Civic coming to Frankfurt, Honda Europe is making it clear (by releasing the video shown above) that it is addressing those criticisms head-on, promising a “two-generation improvement” in ride quality. That’s the Honda that became a global player: responding to criticism, not burying its head in the sand.
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