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Several news agencies are reporting a double-pronged story: that GM has buyers lined up for HUMMER, and that Saab are here to stay and a future Saab may be built in North America.
That’s where it gets fuzzy.
Reuters reports it as follows:
Wagoner said GM was committed to its Saab brand and planned to make an upcoming Saab model in North America, in an attempt to improve the brand’s profitability.
“Saab has been a critical part of our European portfolio and has the potential to be quite a good moneymaker for us, Wagoner said.
Whereas AFP are saying this:
General Motors will begin building Saab vehicles in the United States rather than put its Swedish subsidiary up for sale, GM chairman and chief executive Rick Wagoner said Friday…..
….we’ve got a number of new (Saab) products coming up beginning in the third quarter next year and it will have a new product portfolio for the first time in a long time.”
Wagoner said one of the new Saab models would be built in the US starting next year.
“Part of the idea would be to balance out their cost footprint. That should help out Saab quite a bit,” Wagoner said.
So it’s Saab building a car in North America vs Saab building a car in the United States. Unfortunately, neither news service provide the exact quote where Wagoner mentions it, so we’re left to figure it out for ourselves.
My first thought was that he was referring to the Saab 9-4x, which we’re quite sure is earmarked for a GM plant in Mexico. It’s close enough to what we commonly refer to as North America to give him a pass (you know, ‘mericans and geography) and it maintains a feeling of quality that a Made in Mexico tag might not convey.
But what if it were something else?
The new Saab 9-5 is going to be built on the Epsilon II architecture. The only plant that I’ve heard will be building on this architecture at this point is the Russelsheim plant, but GM do build vehicles on Epsilon in the United States, the new Malibu being the main player, being built in Kansas City and Lake Orion, Michigan.
The next generation of Saab 9-3 is going to be built on a new generation Delta architecture. There are four plans in Europe that could do it, but it’s widely believed that Saab’s own plant in Trollhattan will be the location. The currrent Chevy HHR is built on the current Delta platform in Mexico. I’m not sure if the 9-4x and Caddy derivative being built in Mexico is a replacement for Delta vehicles, or as additional production, but if it’s additional and they upgrade to the new version of Delta…….given that the 9-3 will most likely be Saab’s volume model well into the future, it’d make sense to get the production costs and currency fluctuations to a minimum.
There’s the possibility of a Saab 9-1 in the future. It hasn’t received a green light yet, but GM Europe’s head honcho stated just a few days ago that a 9-1 being built on GM’s Gamma architecture is “imaginable”. The best reference I’ve got for this is Wikipedia, which states that any future Gamma vehicles are earmarked for production in places other than the US.
I’m willing to bet it’s the 9-4x and that Rick Wagoner was just being a bit cute.
——
Other than that, it’s good hear that Saabs may not be selling beside Hummers in the near future. Good times!
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22 responses so far ↓
1 saabyurk
// Jul 26, 2008 at 9:41 pm
Motor Trend said Wagoner was “tight-lipped” when asked which model would be built in America. Makes one wonder.
However, what CNN MoneyCNN Money said about USA volume can’t be good news for U.S. dealers:
“Wagoner said while GM is sticking to plans to keep at least seven brands in the U.S., the company won’t push hard to improve sales of its premium Saab at home. The weak dollar makes Saab, with its lineup of mostly Swedish-built vehicles, costly to import and sell in the U.S., he said.
“Saab continues to be an important part of our global product portfolio,” Wagoner said. “But we cannot push volume in the U.S.” Saab will get several new models to help bolster sales, Wagoner said.”
2 ctm
// Jul 26, 2008 at 10:11 pm
I have seen this in some Swedish media today, but the wording and the way it is reported made me think it was just old and/or matter-of-fact stuff going around once again because nothing more exciting is happening in the automotive world.
Has GM officially confirmed the 9-4X to be built in Mexico? If they haven’t, then GM can use vague word in every interviews to up the speculations.
In the Swedish translations of the “interview”, they write both “start production on one of the new models next year in the US” and “move production across the Atlantic.” It sounds pretty vague, and is probably just lousy interpretation of the words used. Also, lot’s of people think North America = the US…
The good thing is that they once again openly show that they are absolutely determined on giving Saab a whole new model lineup and that the brand is not for sale.
The most interesting part was the translated quote from Wagoner that “Saab is an essential part of out European product portfolio, the sales figures are quite good and tend to be a good cash cow for us.” It differs form the English version. Somehow, I can’t imagine Saab being a GM cash cow at the moment…
3 cj
// Jul 26, 2008 at 10:21 pm
Manufacturing in the US would enable them to push sales.
This is my bet / whild speculations:
9-4 in Mexico
9-5 in Russelsheim
9-3 will not go into production in Trollhattan but in the US
9-1 will be produced in Trollhattan allong with the next generation of corsa etc.
Assuming that the 9-5 will sell 45K units and the 9-1 some 30K units worldwhide this would amount to almost half of the worldwhide sales which gives you a good hedge (assuming that they will also increase the sales in NA a little bit.
All we know is that the new 9-3 is not due until in 2011 or so, and by then it is probably time to replace the corsa as well so they should be able to get the 9-1 done by then.
The natural thing would be to do the 9-3 in europe but the 9-5 in USA. Both large cars would be produced at their main markets, with the only concern being how the hedge would be given that the large cars sell for more…
Am not sure if the peso is linked to the USD or if that currency is floating free which would also have an effect? Even producing only hte 9-4 in NA will not be great hedge for the other modells as the sales of that in Europe likely will not be huge.
Good to see that they are having an ok time finding a purchaser for Hummer which i did not thing would be that easy…
cj
4 Ubermich
// Jul 26, 2008 at 11:18 pm
We’ve already seen that the 9-4X is confirmed for Mexico.
Swade, Mexico is North America. As are the small countries to the south of Mexico commonly referred to as “Central America”. South America doesn’t begin until south of the Panama.
See: NAFTA (North American Free Trade Agreement or, How We Can Make Illegal Smuggling and Immigration Easier for Everyone)
5 Markac
// Jul 27, 2008 at 12:09 am
Building Saabs in North America for the US market whilst the US dollar remains weak is feasible, but it would be unwise to move another whole model’s production there besides the 9-4x. When the US dollar rises again, and I’m sure it will, it could make exports prohibitive. Also I’m not sure how many Americans would like a Saab 9-3 or a 9-5 that came off the production line alongside a Buick? North American Saabs? Sounds about as Swedish as Blueberry pie or is that enchiladas?
6 WooDz
// Jul 27, 2008 at 1:01 am
Personally I think Wagoner is talking about the 9-4x, as most here are also presuming.
I’m sure some of you have read my comment on Swade’s 9-1 the opinion post, where I believe GM will start to make better use of their plants. It’s going to take a few years for production cycles to fall in place but when it does GM will be able to build many brands at one plant.
As Swade mentions the Malibu and Aura are built at the same plant on an extended Epsilon platform. In 2012 they will move into EpII. Shifting specific US Saab 9-5 production to Kansas City and Lake Orion will cut shipping and import costs and eliminate currency fluctuations. Rüsselsheim would then use the extra capacity to produce the Malibu for Europe, again cutting costs. Providing the annual production out-weighs shipping cost, GM will be able to do this on a global scale and eventually have plants producing multiple brands and compatible models for their market specific areas.
In lay-mans terms this means Trollhättan can build any Delta derived model. Rüsselsheim will be capable of producing any Epsilon vehicle. The same will go for North American and where under productive plants could be re-tooled to produce Gamma based vehicles for example. The idea of having global platforms isn’t just to create better synergies but to achieve maximum efficiency from each production plant. This could secure the Trollhättan plant further, with the potential of being expanded to take Gamma based models for Scandinavian territories. If there is one this we cannot argue about, is that GM are masters at calculating costs and that’s what it would boil down to. Globalisation on this scale makes for very good business sense. More profits means better cars, so I really hope this is GM’s intention of becoming a super efficient, lean company.
7 Bernard
// Jul 27, 2008 at 1:13 am
Evidently Europeans are not buying enough US-made GM products. If Cadillacs were getting shipped to Europe in higher volumes, GM wouldn’t have to consider building Saabs in North America as a currency hedge…
The basic idea is that the volume of trade should be just about equal in either direction, that way currency issues get evened-out.
8 zippy
// Jul 27, 2008 at 1:33 am
Europeans arent buying US-made GM products because they are four wheeled garbage.
9 rogan2915
// Jul 27, 2008 at 4:29 am
I think it would be fairly stupid for 9-5 production to move stateside… for one, it isn’t the most popular Saab over here, and two, it’s the most expensive, so they should have more room for building the cost of shipping into the price.
-Rogan
10 ck1x
// Jul 27, 2008 at 5:49 am
I think this could potentially be a great idea if it’s what think it means. Toyota and other big manufacturers are announcing that they plan on establishing more production here in the US. and for the most part it is probably just to take up the volume space that the trucks and SUV’s are no longer occupying in these factories. If Trollhattan and Rüsselsheim built Saab model for Europe and the rest of the world, Saab USA could manufacture their volume selling cars here also and add a little something extra that will appeal to the American audience a little more so. Don’ get me wrong here I love my Saab’s to be from over the pond myself, but GM is thinking about the other buyers that they aren’t reaching and to this point have been untapped with the Saab brand. From a business sense with all the brands that GM currently has stake in. There shouldn’t be a reason why their sale aren’t a lot higher. Simply for everyone that doesn’t want a Caddy or Buick they should be buying a Saab and vice versa. They have to make sure they put out great products like the new Malibu and CTS and they will have no problems with sales. Just be consistent GM!
11 smoke_jaguar4
// Jul 27, 2008 at 7:10 am
Diversification is a very good thing. By dedicating more plant space, it would cause GM to dedicate more resources to Saab. Improving Saab’s profit margin will also give it the room needed to produce newer, more innovative vehicles. Finally, given the recent build issues with the Turbo-X, perhaps it’s time for Saab to seriously consider non-Swedish manufacturing options. Nothing motivates like a little competition; time to put the heat on the workers in Trollhattan and Russelheim.
12 Tompa
// Jul 27, 2008 at 8:20 am
Mark.. A correction.. Blueberrypie is as Swedish as it is American. There is alot of berries in our forrests. But the most common are Blueberries and Lingonberries. You aught to try Lingonberry jam together with Swedish meatballs and mash… Yummy!
As goes for the American pie..
Or?
May I suggest Pecan pie as being THE american pie?
I´m getting hungry… haha
Cheers/Tom
13 Markac
// Jul 27, 2008 at 9:00 am
Tom: I would have said Apple pie, but I think that was originally English? Actually I have tried Swedish meatballs and Lingonberry jam, they serve them at Ikea!
Your’re probably right about the Pecan pie. Pecans taste pretty similar to Walnuts to me.
Cheers,
Mark.
14 1985 Gripen
// Jul 27, 2008 at 10:12 am
I agree with what Ubermich wrote. Mexico is considered North America, not Central America.
15 Dave E
// Jul 27, 2008 at 10:34 am
Mexico is definately North America, and don’t forget that plans are in the works to idle a major assembly plant in Oshawa Canada that is currently producting pickup trucks. The auto workers union is looking for other GM product to fill this manufacturing void also.
16 Talonderiel
// Jul 27, 2008 at 11:26 am
I totally agree with Woodz… It’s the inevitability of the global market that production of products and goods will be shifted to where the production costs can be minimized and profit margins can be maximized. As long as engineering, designing, testing and conceptual brainstorming is still done by the Trolls, with a little of the General’s soldiers for assistance, while production is done elsewhere; I think it will be just as amazing… If not slightly cheaper.
17 Tompa
// Jul 27, 2008 at 8:41 pm
Mark.. Yeah, sometimes I forget just how huge Ikea realy is.
Let there be Saabs made world wide. But please let the keymodel be made in Sweden. I wonder what Porsche 911 enthusiasts would say to a classic like that being made in Turkey or something like that. (No, I love Turkey.. You know what I mean)
18 Markac
// Jul 27, 2008 at 10:42 pm
Tom: I agree, keep the 9-3 in Sweden and make the others elsewhere, but only if they have to….
Well, maybe not here in Australia. A Saab made by Holden. Not really!
19 Lundin
// Jul 28, 2008 at 6:42 am
Hi all,
Re: The production situation in Trollhättan
I work as a Research-Engineer at Saab automobile. I graduated from Chalmers and did a master thesis and together with a friend developed a program concerning virtual operator training in order to minimize or should I say totally avoid issues like the recent production issues with Turbo-x.
This was 1.5 year ago.
I would like to discuss two topics.
1. What has been done in Trollhattan to produce (actual production) better cars.
2. Why I don’t think there is a good idea to separate technical and production facilities.
1. To make the story short, Trollhattan with current research within virtual builds and training (and other simulations) are among the best in GME and maybe even in the entire automotive industry. Trust me, there are new innovative tools lying on my desk and computer that minimize operator errors.
These tools have been tested and successfully verified in the factory to make production errors “non existent” (an on going project that was tested for 5 months). Please, try to find such development in Mexico or in any other production factory…it simply doesn’t exist and that is what makes Trollhättan and Swedish automotive industry unique.
The tools exist!! But they have not been implemented into the GM(E) factories…yet…..as normal when it comes to “Saab” thinking one might say.
GM bleeds and I am unsure if this area ever will be a top priority. But in my mind, if you are such a small player producing 80-100k vehicles per year then you better make (from an assembly point of view) those cars as good as it gets. Of course there will always be specific issues linked to materials from suppliers etc.
These, computational aid tools, correctly implemented would yield dramatic difference in the “direct run loss” and lower it by a wide margin! I don’t see how an assembly operator could mount a “vector” sing on a turbo-x car with the aid of this help.No, we are not talking argumented/mixed reality here.
The study was just finished and now I really hope GM(E) do realize the win-win situation of installing such programs fot the upcoming platforms. I honestly believe Trollhättan can be seen as a “front runner” in the future in the way we think on how to assembly cars.
Well, I just wanted you to know what sort of research that has been carried out in Trollhattan.
2.
People talks about manufacturing. Manufacturing is a much wider concept than just production, it includes R&D and all areas that are needed to produce a car.
I don’t not believe and never will, that current PLM/PDM or whatever computer system and simulations that is being used can be so good that you can make the all R&D in Sweden and then produce the very same car in Mexico or vice versa without a LOT of problems. I promise, the initial cost and final verification would be so high that it makes no sense.
In theory, yes, in reality no! What seems to be the bang of the bucks is probably bucks of the bang!
Just look at current situation, a lot of Opel work is being done in Trollhättan for other production facilities in Europe. Do you honestly believe that when the Swedish Engineers arrives to the factory that the scenario they once planned or simulated can be found?
Also, there is a lot of feedback within the ramp-up that needs a two-way communication that far exceeds ordinary msn chat between production-development staff.
Again, I don’t believe in a production area and one development area, at lest not if you want to educate and produce the best Automotive Engineers!!
To be able to fully understand how to build good quality cars, you need both technical development AND production facilities linked. Period. I just wanted so say this if someone at GM thinks Sweden can be a “technical development centra” without production… well think again.
Trollhättan is not an ordinary plant; there are so many new innovative ways of producing cars…but in the end of the day…GM: show some interest to make it happen and how to proceed from research to full-scale.
Thanks and keep up the good work here at TS
20 John in Bismarck
// Jul 28, 2008 at 11:21 pm
I think I understand now one of the main reasons (other than cost) why GM discontinued the Saab European delivery program this year. Where are people supposed to go to take “factory” delivery of their new Saab? Germany? Mexico? Canada? I was hoping that my wife and I could take delivery of a new 9-5 in Sweden one of these years (when it’s time to trade our 2005 9-5 Aero), but picking one up at a factory in Kansas City just doesn’t have the same appeal…
21 saabyurk
// Jul 29, 2008 at 1:01 am
Lundin: Thank you for an insider’s point of view. I think I agree with you, almost entirely. Unfortunately, I don’t think the bean counters understand the necessity of a symbiotic relationship between production and development staff.
22 Nico
// Jul 29, 2008 at 7:46 am
Hi Swade and everybody else,
It’s good to see you still posting.
Regarding where the 9-4X is going to be build, if it is indeed in North Amerika, if that may be Mexico. How about this: it is not going to be build. All we hear in the news, is that GM is cutting production, and cutting production. Wouldn’t it be really cost effective, not to build in the first place. Don’t get me wrong, I’d love to see the 9-4X on the road. But from a financial point of view, a 9-3X would make more sense. Anyway, just my 2 cents.
Later