Saab was supposed to reach 100% production speed sometime in the middle of last week after enduring a nearly two-month shutdown. But now it seems that more “material shortages” have brought the Trollhättan plant to its knees again, as Steve Wade of inside.saab.com reports

Yesterday, production at Saab Automobile stopped at lunchtime due to material shortages. We have now stopped again today for the same reasons…

The liquidity situation is still tense, and depends on several different financing solutions falling into place, long-term as well as short-term. Some milestones have been achieved, such as the letter of intent signed with Pang Da and the additional funding that their order of Saab cars means. An example of things that still await a solution is the sale and leaseback of Saab AB Property, which we have addressed in previous communications. Representatives from Spyker and Saab will continue to work with these solutions, while the dialogue between Saab and suppliers progresses.

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According to the White House’s just-released report titled “The Resurgence of the American Automotive Business” [PDF here]:

The U.S. Government provided a total of $80 billion to stabilize the U.S. automotive industry through investments in General Motors (GM), Chrysler, Chrysler Financial, Ally Financial, and programs to support automotive suppliers and guarantee warranties. As of today, $40 billion has been returned to taxpayers. While the government does not anticipate recovering all of the funds that it invested in the industry, the Treasury’s loss estimates have consistently improved – from more than 60 percent in 2009 to less than 20 percent today.

Independent analysts estimate that the Administration’s intervention saved the federal government tens of billions of dollars in direct and indirect costs, including transfer payments like unemployment insurance, foregone tax receipts, and costs to state and local governments.

This is as close as we’ve gotten to a thorough accounting of the full cost of the auto industry bailout, as both GM and Chrysler have erred on the side of counting as little of their own taxpayer support as possible (leaving out aid to their predecessor firms, finance companies and suppliers). On the other hand, it’s also two short paragraphs in a ten page report… and the rest of the document hews pretty closely to Democrat strategist Ron Klain’s advice to the White House, specifically

tell the story with fewer numbers and more emotion; less prose and more poetry

While the media debates whether this means the bailout bill will come to $14b or $16b, it’s becoming clear that the final number won’t make a big difference… at least politically.

When Chrysler celebrated its payback of “every penny that had been loaned less than two years ago” last week, I noted that CEO Sergio Marchionne’s triumphant line was technically correct, but hardly represented the whole truth of the story. I pointed to $1.5b in supplier aid that helped keep Chrysler afloat, as well $1.9b worth of the Bush Administration’s “bridge loan” to “Old Chrysler,” prior to its government-guided bankruptcy and sale to Fiat. Apparently my more-inclusive accounting of the price of Chrysler’s rescue (which was picked up elsewhere in the online media) caused Mr Gualberto Ranieri, Chrysler VP of Communication, to spend some part of his Memorial Day Weekend writing a response of sorts, outlining Chrysler Group LLC’s perspective on the situation. Hit the jump for Ranieri’s statement, and my brief answer to the headline’s question.
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It took a bit of research to fully parse the California New Car Dealer Association’s complaint against Chrysler and its partially company-owned store in Los Angeles, and our finding is that the CNCDA is actually gunning for Chrysler with gusto. But, argued some of the B&B, surely Chrysler doesn’t want to be kicked out of California? Surely Chrysler’s California dealers don’t want to see their manufacturer banned from selling vehicles in the state? Well, it turns out we were missing a little context that seems to indicate why Chrysler’s California dealers are willing to go to war over a single dealership: Chrysler is overhauling its California retail presence with the help of Wall Street hedge funds. Having used the bailout to wipe out 789 dealerships across the country, Chrysler appears to be working around franchise law to exert more control over its retail network in the Golden State. No wonder then that California’s dealers are standing together to attack Motor Village, the most egregious example of Chrysler’s new retail model. And there’s no knowing where the conflict could end…

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With €30m from PangDa and €30m from Gemini Investments, Saab restarted production today at its Trollhättan factory. According to SaabsUnited, the line will run at 80% speed today and Monday, before moving to 100% (over 200 cars per day) by the middle of next week. Speaking at a press conference, CEO Victor Muller reflected:

It’s been an interesting lesson. A company like Saab, that lives in a glass house, should never be caught in a situation where there is not enough cash to withstand the storm as the one we have seen now. What happened seemed like a very insignificant situation became a very significant situation, and next thing you know, you are losing six weeks of production… it was very, very tough and we’ve had some very adverse circumstances that we’ve had to live with, but we got out of it. I think that if you got through 2009-2010 as Saab has been, anything else is relatively easy. We will definitely ensure that this will not happen again. This means that we will be on a quest to ensure that we have sufficient funds at all times to overcome adveersities like this because we can’t afford to have another production stoppage with all the relating downsides, such as disappointed customers, upset suppliers and media attention… that is definitely not in our interests.

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Chrysler’s bailout “thank you” event today was long on praise for the redemptive power of its government bailout and short on talk of remaining challenges, but at least one important fact was acknowledged: this highly-touted “payback” was only for 85% of the money loaned to Chrysler during the bailout period. Although, to be perfectly accurate, it wasn’t exactly Chrysler who acknowledged the outstanding obligation [the firm avoids any such nuance in its release], as CEO Sergio Marchionne simply stated that

We received confirmation this morning at 10.13 am from Citigroup that Chrysler Group repaid, with interest, by wire transfer to the United States Treasury and by bank transfer to the Canadian government, every penny that had been loaned less than two years ago. [Emphasis added]

That last bit was the important part… as in, the part that was most often repeated in Chrysler’s presentation and in subsequent media reports. But it’s not the whole story…

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We still have not heard from Saab and there have been six weeks without production. It eventually reaches a point when you have to make a decision

Johan Andersson of the Swedish unit of supplier giant Lear in the WSJ, on why his employers just laid off all 160 workers of its Trollhättan-based Saab workforce. Apparently Mr Andersson and Lear aren’t any more encouraged by Saab’s PangDa deal than TTAC. And considering that the Chinese dealer group is telling Gasgoo that “production has already restarted” at Saab, the fleeing suppliers who haven’t even heard from Saab yet create some credibility problems for the PangDa-Saab alliance (even if PangDa was referencing GM production of the 9-4X at Ramos Arizpe). Which makes the dire rumors that the deal has not, nor will be, blessed by the Chinese government a little more worrying. Sounds like the rotund lady is warming up her vocal cords…

Does that headline seem ripped from the pages of TTAC’s 2008-2009 headlines, or what? But really, who’s shocked? Chrysler spent early 2009 trying to convince the government that it was worth a (second) taxpayer-funded second chance, and now that it’s looking for a private-sector bailout in order to escape the terms of its publicly-funded bailout, Chrysler’s still got some ‘splaining to do. The DetN reports:

Chrysler Group LLC does not intend to speed up plans for new cars despite media reports that investors see a high degree of risk in an automaker that has been so dependent on truck sales…

“Nothing has changed from the five-year plan,” [Chrysler Group VP of Design and Dodge boss Ralph Gilles] said.

New small and midsize cars for Chrysler, engineered by Fiat, “are coming strong and heavy,” Gilles told reporters following a speech. “There is no need to speed up.”

Now, nobody would suggest that Chrysler should mess with its product timing simply to please some bankers. If it’s even remotely possible to hurry new products to launch without cutting serious corners, Chrysler should/would be doing it anyway (ask Sergio). Still, Gilles’ “nothing has changed” sound bite isn’t exactly true.

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As Steve Rattner described in his book “Overhaul,” the Presidential Auto Task Force very nearly decided not to rescue Chrysler, with the decision coming down to a single vote. Now, it seems, that with Chrysler blaming the “shyster” interest rates on its government loans for its lack of profitability, Chrysler’s viability now depends on rounding up a “lender of second to last resort.” And, according to the latest reports, that rescue-of-a-rescue effort is still very much hanging in the balance as well. If CEO Sergio Marchionne thought the government’s loan terms were “shyster”-ish, he was clearly in need of some context from Wall Street… and he doesn’t seem to be liking it.
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There’s an old saying that goes something like: “money talks and bullshit walks.” We don’t necessarily subscribe to it completely here at TTAC, where words pay the bills, but you have to admit that no amount of talk could make the same impact as news that GM’s CEO Dan Akerson has dropped nearly $1m of his own money on GM’s underperforming stock. I bring this up because, for the first time ever, you can now buy CARZ, which in addition to being an awful Sir Mix-A-Lot song is the first-ever auto industry index fund. Specifically:

CARZ is designed to track a basket of reputable car makers in the United States and rest of the globe. The fund’s 30 holdings present as a who’s who of the car industry, with Daimler, Ford, General Motors, Honda and Toyota comprising the top five positions. Together, these and the rest of CARZ’s top 10 holdings represent close to 60% of its assets

But, while it’s one thing for a CEO to bet on his own company (or anyone to bet on any company they believe in), investing in the industry at large is a very different gamble. Which raises an interesting question: having destroyed billions of dollars of value in recent decades, and proved itself to be vulnerable to all kinds of unpredictable events in the shorter term (think: recalls, credit crunches and and tsunamis), is the auto industry as a whole really worth gambling on? I’m not sure I’m entirely convinced…

Some taxpayer-funded turnarounds just have a little more turnaround than others, according to the GAO’s recent report on the auto bailout [PDF here], which tracks the progress of the Detroit patients and considers their futures. Sure, GM received quite a bit more government money than Chrysler, but the improvements in GM’s financial performance compared to Chrysler’s are clear. But the GAO still has a number of concerns about the “more than $34 billion” of taxpayer value that’s still floating around, unrecouped, in the rescued automakers. Feel free to peruse the GAO’s full 59-page report, or you can hit the jump for the highlights.

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Australian investors in the photo enforcement firm Redflex Traffic Systems voted down a buyout offer from toll road giant Macquarie Bank and the asset management firm Carlyle Group at a general meeting in Melbourne today. The recently sweetened deal would have paid A$2.75 per share, or $305 million total, to take over the speed camera and red light camera business.

“Your directors unanimously recommend that shareholders vote in favor of the improved scheme proposal, in the absence of a superior proposal,” Redflex Chairman Max Findlay told assembled shareholders. “I can confirm that no superior proposal has been received.”

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Saab’s got a new short-term lease on life, as Automotive News Europe [sub] reports that the Swedish brand has secured a €30m, six-month convertible loan from Gemini Investment Fund. Saab is also requesting a €29.1 drawdown of its EIB loan, and when that is approved next week, Saab will reach the €59.1m in liquidity it needs to restart production. According to another piece by Automotive News [sub], Saab is still in talks with the Chinese automakers Great Wall Motor Co., China Youngman Automobile Group Co. and Jiangsu Yueda Group Co. in hopes of securing an additional investment in the struggling Swedish automaker, as well as a joint venture for Chinese production of the next-generation 9-3, and a possible Chinese market distribution deal.

Meanwhile, Saabsunited reports that several companies have been told to stop development on that next-gen 9-3 while the company gets back on its feet, meaning it could be delayed into the 2013 timeframe. And while Saab sacrifices long-term development for short-term survival, the recent production shutdown is taking its toll: Swedish sales of the 9-3 are up, but the new 9-5 is falling off (128 sold last month) as stocks dry up. The drama continues…

Chrysler’s Q1 conference call is just beginning, and though you can’t listen in unless you’re registered media, you can download the slide set here [PDF] and the press release here. Besides, I’ll be updating this post with the latest as it happens, so why bother? Marchionne is just noting that Chrysler’s $116m Q1 profit is the first since 2009, although he seems more excited about “modified operating profit” of $477m, and free cash flow of other $2.526b.

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The Swedish National Debt Office has approved Saab’s deal to sell property to its Russian backer, Vladimir Antonov, but the Swedish firm is still waiting on approval of the deal from the European Investment Bank. Saab’s production operations have been shut down for two weeks, since the automaker began having trouble paying its suppliers. The EIB says its must simply review the deal, which would include the sale of Saab’s property to an Antonov-owned bank as well as the release of the remainder of Saab’s EIB loan, although GM gets to review the deal as well before it goes through according to thelocal.se. And since GM has long opposed Antonov taking a large share of Saab, which owns rights to some of its latest technology, Saab is reportedly also talking to several Chinese firms about partnerships that could save the struggling automaker.

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