Carl-Peter Forster on GM
There’s whispers going around that when Bob Lutz pulls the pin on his golden retirement parachute (after the Volt comes online) then his place as GM Car Czar might be taken by GM Europe’s Carl-Peter Forster.
CPF is well and truly in this site’s good graces right now. Not only is he the official titular head of Saab Automobile, he’s also the guy who broke the good news last week that the next generation Saab 9-3 would be made in Saab’s own Trollhattan factory.
Like Bob Lutz, CPF has recently started blogging. He’s the main guy at GM Europe’s official blog - Driving Conversations. Whilst Maximum Bob is always good for a quote, CPF’s value is in his sober judgement and straightforward appraisal of whatever-it-is that he’s writing about.
This week he’s looking at the difficult position that GM find themselves in, and once again it’s good, meaty stuff. If you’re looking for leaked stories about new cars, then you’re looking in the wrong place. There’s no catchy phrasework, either. All you get is just what you need - the situation and what they’re trying to do about it.
….the rise in oil is having a profound and permanent impact on the fundamentals of our business….The big questions are “how high will oil go?” and “how deep will the impact be on the industry?”
….the only honest answer is that the impact on the industry is going to be extremely tough, which is already becoming very apparent. For GM, even when you factor in the exceptional growth we are experiencing in Eastern Europe, Asia and Latin America, it’s clear that the business in the mature North American and certain European markets could be dragged down to lows we haven’t seen since the recessionary days of the early 80’s.
….what is there to do? Simply put, you forge ahead and make the changes necessary to be as strongly positioned as possible when things improve. GM is focusing billions of Euros on advanced propulsion technologies to get our vehicles as fuel-efficient as possible – advanced petrol engines, clean diesels, downsizing/turbo-charging, mild and strong hybrids, battery electric vehicles, bio-fuel powered vehicles and fuel cells are all going to be critical technologies in an energy constrained world.
If there’s one thing I really like about having CPF in charge of Saab (put simply, he’s Jan-Ake Jonsson’s boss) and in charge of GM Europe is that he’s got a good handle on who Saab are and what they have to offer. I don’t think it’s any sort of coincidence that CPF moved in just in time to green light the Aero X and the models that have come forth since.
I’ve still got a lot of concerns for GM and Saab’s place at the table. There’s still a part of me that wishes some other company could sweep in and take over Saab, making them the company they could be. But whilst Carl-Peter Forster is still in a position of influence there, I’ll sleep a little better and continue to hope.
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I’d have to admit that once i saw the chart on GM sales and Saab being lower than Hummer plus the article by CNN Money about Saab possibly being on the chop block, I was a bit worried. But after reading this article plus CPF’s blog post it just doesn’t seem like a smart buisness move for GM to drop SAAB, and is probably not likely.
forgot to add this. ” And it seems like they know it.”
Conor,
The shareholders dont see it that way. These people lost half of what their shares are worth in just one year alone. They want change now. Right now.
Even though this wouldnt be a smart business to sell Saab, the shareholders are the ones that need to be convinced of that.
A good point. Perhaps though the shareholders have to be shown SAAB’s eco-ideas for the future, unlike Hummer or GMC have shown yet, as the 9-7 and 9-4 seem to be idea’s pushed through pre-oil price explosion.
Conor, are you suggesting the 9-4X doesn’t fit in Saab’s “green” movement ?
Mmh, CPF placed Trollhattansaab.net in his link-list. That is not bad.
I think that in the USA at least, since this pertains to my personal point of view. That the initial release versions of the 9-4’s will not be anything to gasp at fuel effiency wise. Maybe its just my region (North Eastern, USA) but the idea of ethenol engines is great; higher performance, alternative fuel, and the whole more from less saab ideal. BUT we just dont have ethenol fueling stations in my area of the world(nearest is 30miles away according to mapquest). I think that a SAAB Hybrid drivetrain is soon to come possibly premiering in the 9-1 just as XWD was in the new 9-3 design.
Swade: I don’t think Saab really have a place at that table with the big boys. Actually I think they bring a little card table and set it up nearby!
Nice one Markac - and from Ikea, bought in flat-packed.
You mean this one turbin?
Actually I own a very nice Ikea table.
Yep, just like that! Saab’s Ikea table can be easily adjusted to be bigger or smaller. GM’s big boys always make it smaller when Saab is ( frequently ) out of the room, just for laughs.
turbin: I can just imagine that. I’m sure Saab is the one sent for extra sugar and milk for the coffee and paper for the photo copier.
Right on, Markac, and take the minutes with their fancy, thick, Saab pencils.
Is Saab really sell-able?
It’s so integrated into the GM global machine, that it seems high improbable that someone else (Renault, Fiat, Tata) would just swoop in and give GM enough cash to make it a plausible offer.
I would think that if it really is a shareholder-above-all mentality, they’d simply extract whatever profitiable bits they could find in Saab, and leave the rest on the cutting room floor.
bliebs77
I think Saab is sell-able.
Look at the Jaguar AND Landrover sale.
Both were WAY more integrated into Ford. but still got sold. Volvo is really integrated into Ford, may get sold. Trust me, if hard times come, GM will sell them. It would cost even MORE money to kill the brand then to sell it. Prepping a brand for sale can cost up to $1.5 billion, but with the (correct me if I’m wrong) ~$35 billion loss in the first quarter alone, another 1.5 would barely scratch the surface skin, and in the end of the day, Saab would be out of their hair.
I’m not going to correct you on the $35B figure, Ronald, as I don’t have the numbers on me. But suffice to say I’m arching one of my eyebrows and looking over the top of my glasses at you. I think it’ll prove to be (very) high and even if it were close to that, it’d likely be an accounting entry only (i.e. asset writedowns), not a cash amount. Having said that, I think your underlying premis is correct - it’s sellable. - SW
Now to answer your question- It really isnt integrated that MUCH into GM. the Saab factory remains just that, a Saab factory, and will start astra production (which can be shifted almost anywhere else, most notably the OPEL factory), Saab still produces and tunes their own engines and much of the work, and GM is supplied w/ turbo’d engine setups exclusively from Saab inhouse. Not to mention biopower and other such engine setups. The only thing is the platforms, but whats the problem with that exactly?
can someone explain how platforms will affect a sale of an auto company for me please? thank you.
If Saab were sold there would be an interim period where GM could continue to supply platforms etc. In the case of the new 9-5, probably the whole car. Just look at the Ford-Tata deal. Ford will be selling components to Tata for quite a long time.
I don’t fully understand this discussion. Whyh would GM sell SAAB righht now when so much is coming. GM will not solve any internal problems with getting rid of SAAB, actually that would create even more issues. With the Hummer down the drain, GMs premium brands are down to Cadillac and SAAB, the showrooms around the world would never make it with only Cadillac in them, we all know the sales numbers.
Looking at SAABs potential in a few years. 100K 9-3, 50K 9-4, 50K 9-1 and 50K 9-5 (mybe even more 9-5) SAAB suddenly becomes a player again. These numbers canot be so wrong since the 9-3 are alreay todays numbers and for 9-1 and 9-4 GM announced the 50K volumes themself so… I believe it can be a good start. The big different is that things really seems to happen now. On top of this, every new model is much more cheaper than before since so much is borrowed from GM.
Kenu: GM wouldn’t have sold Saab a few years ago because it didn’t look viable. It would have been a fire sale. You could say the same thing with Jaguar before the XF came along.
The 9-1 isn’t signed off yet and may never be?
GM had to make Saab look saleable and that has taken an updated 9-3 and a new 9-5.
The 9-4x is less relevant as it it isn’t really a core Saab product and I doubt if it will sell in large numbers outside of the US. In fact, I think the 9-3XC will sell far better if it arrives, even though it probably only has a 3 year lifespan.
I quote Ronald (above) “Prepping a brand for sale can cost up to $1.5 billion”. Perhaps that is just what GM has been doing?
“The 9-4x is less relevant as it it isn’t really a core Saab product and I doubt if it will sell in large numbers outside of the US. In fact, I think the 9-3XC will sell far better if it arrives, even though it probably only has a 3 year lifespan.”
I agree completely Markac.
Swade: You are right. GM DID have an asset mark down back in the end of 2007 making it an almost $39 billion dollar loss, and it was a “one time non-cash charge of future tax benefits.”
Article- http://www.autoobserver.com/2007/11/general-motors-loss-write-down-leads-to-39-billion-loss.html
and as for the first quarter of this year, GM lost another $3.25bil. (I stand corrected.)
Link- http://www.marketwatch.com/news/story/general-motors-posts-325b-1st/story.aspx?guid=%7BD56E9182-56F1-434D-B30B-676A080344C1%7D&dist=msr_9
But if they plan on selling HUMMER, I’m sure third quarter ‘08 sales won’t look pretty. Add Saab into the equation, and we are in for a whirlwind.
Maybe GM is prepping for a sale by *trying* to get more cash on hand to sell HUMMER and maybe another brand.
pure speculatory I know..
According to Wikipedia, GM’s total assets is $148.88B, and revenue is 181.122 Billion, with an net income of -38.732B.
They have the cash on hand, even though its dwindling fast. Its just the question of “do they have the muscle in their finger to push the button.