Sorry there hasn’t been much going up here in recent days but there’s a combination of reasons for it. Number 1 is the simple fact that life outside the blog (yes, I have one) has been unusually busy for the last few days. My wife and I actually went out to see a stage production a few nights ago. Last night there was a farewell for a mate who’s heading off to Sudan of all places, as well as a quick meetup with the national Chairman of the Aussie Saab Club.
Then this morning I had to jump out to airport and pick up Lance Cole. Yeah, that Lance Cole. He’s swinging through Tassie whilst touring around down under. Unfortunately I didn’t have my wits about me this morning and instead of grabbing the only Turbo X press car in Australia from our local dealer, I did Lance the discourtesy of driving him back to our place in the Alfa. He’s the forgiving kind though 
That’s the busy-ness.
But the main reason there hasn’t been much content here is the simple fact that it just doesn’t feel right writing about seemingly insignificant stuff when there’s a possibility that Saab’s future hangs in the balance.
GM are holding a big media call tomorrow to go through what will undoubtedly be a disastrous set of third quarter financial results. An internal GM email that didn’t stay internal for too long has revealed that they’ll also be outlining some big changes to be made.
Saab Sweden and SaabUSA have both recently given assurances that they’ll be around for the long haul, and I guess we have to take them at their word. But the situation is so dire for GM right now that the senior execs have got to be thinking about doing whatever they possibly can to avoid bankruptcy proceedings.
The latest:
* It’s estimated that GM are burning through (i.e. losing) between 1 and 2 billion dollars in cash per month. It’s also estimated that GM have a bottom line requirement of between 11 and 14 billion dollars to operate for a month. Once that cash burn depletes their reserves to the threshold of that baseline requirement, that’s when things become seriously serious (i.e. that’s when the lawyers get paid)
* In addition to not being able to borrow money themselves, GM’s customers can’t borrow money too easily, either. The best products in the world are about as useful as a poo-flap in a spacesuit if you can’t sell them to someone.
* US powerful pollie, Nancy Pelosi, is already talking about an extra 25 billion in government ‘loans’ – calling it a show of faith – to the Detroit automakers. That’s 25b on top of the 25b they’ve already allocated. Word is that GM are already hammering the new government for the help that Bush declined to offer last week. I don’t understand the system well enough to know who’s got to give the nod here, but the consensus amongst the pundits is that $10b in GM-Chryco merger assistance is a small price to pay to save a majority of the jobs that are at stake.
* Another consensus opinion is that if GM go into Chapter 11 bankruptcy, the flow-on effects through the supply chain would probably launch Ford into a similar situation fairly quickly. The thought of both the seemingly viable Detroit automakers in C11, as well as one unviable standalone in Chysler, is not palatable to say the least.
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Then there’s Saab.
And that’s what we’re all waiting to hear about. If there are plans to alter Saab’s ownership or presence in any way, it’s something that we’ll most likely hear about tomorrow. It’ll probably just be a footnote.
That GM media call is at 11am, Detroit time, which is around 3am here in Australia. I won’t be getting up for it, but might set the alarm for 5am so that I can catch the fallout in real time.
Maybe Djup Strupe will be in touch beforehand. I doubt it and some ways I hope not. I don’t want any Djup Strupe’s putting their future in jeaopardy just to get the news online 30 minutes earlier.
Like I said at the top, though, it seems like this has the potential to be a pivotal moment. Maybe it’ll all turn out to be nothing as far as Saab is concerned; I hope that’s the case.
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Let’s hope the best for Saab. Let’s be honest, GM was good and bad for Saab. Who is doing good these days… no one. I called to schedule an oil change today, usually one week wait. Not now, said the service writer, any day, any time you want…
I hope tomorrow is pivotal for Saab and points to a new life and a new direction for it.
I think GM’s woes are far too great to worry about Saab too much at the moment. GM will undoutably have to re-structure and re-size which will take some time. When it finally get’s around to looking at Saab, Saab’s market could have dwindled so much it that it may be beyond the point of no return. Hopefully GM will do the honourable thing and bail out sooner rather than later and at least get some return on it’s investment. Retiring Saab or selling it when it’s almost gone should not be options.
As long as I get to see the 2009.5ish Saab 9-5 at Geneva!
I have a feeling the media is way over-hyping the “important changes” mentioned in that GM memo (sent to all employees, btw.). This is standard business lingo, besides surely the General will be going through some important changes whether that was said in an e-mail or not.
Selling Saab right this moment would make absolutely no sense, for they’d have to pay someone to take the brand off their shoulder straps. A Saab with the expanded product range, sold in a couple of years from now when investors are not running for cover would fetch a far better price.
In all fairness, most of the negativity towards Saab seems to be because of GM ownership. I am not so convinced Saab had such vastly superior products 25 years ago, but they did get the props for trying. The little Swedish independent planemaker-cum-automaker was likable and quirky.
Kroum,
I guess it’s a little of the case where drastic circumstances call for drastic action. GM’s definitely in drastic circumstances right now. Sales were down 45% last month. They’re slashing every cost they can but revenue keeps falling at a faster rate. Customers are finding it hard to get money and investor confidence is continuing to fall.
I agree that it wouldn’t make much sense to offload Saab at the moment. It’ll make such a small dent, possibly keeping the wolves from the door for only a few weeks at best.
But it’d be imprudent to not at least mention that there is the potential for this to effect Saab beyond the model delays we’ve already heard about. And by the way, the news may only be official confirmation of these delays. If that’s the worst of it, that’d be fantastic.
I think it’s unlikely that we will hear directly about any possible Sale of Saab tomorrow. Maybe just a few hints? I still think my scenario of using the new 9-5 as a bargainning chip to sell Saab is possible. Whilst everyone else seems to think that Saab would be sold to a single buyer, I’d like to suggest that a consortium might be a viable solution? GM could still retain a significant share of the brand and possibly be the main OEM supplier to a new Saab AB, but would not be directly financially responsible for the company. I’m sure this would please the beancounters at the moment. And it would get some return for selling 75-80% of Saab.
I think it would broker a deal to supply the 9-5 from Opel for five years or so to the consortium, and also supply components for the existing 9-3 and possible replacements. I think it’s less likely that the 9-4x will get similar treatment and could simply be re-badged as a Saturn/Opel/Vauxhall or Holden depending on the market. The replacement 9-3 and possible 9-1 models would probably suffer some delay, but if GM was to remain a major component supplier this could be minimized.
There is an ugly jobs report coming out tomorrow, so that will most likely be more bad news in the near term as well.
GM’s news will most likely outline further cost cutting etc.
Perhaps the only good news is the drop in energy prices. Gas is $1.93 a gallon for regular here in the Cleveland area – I filled up my car with premium for just over $30.00 for the first time ever since I have owned it. This cut in energy prices is a stimulus package in itself.
Hey everyone!
Our man Swade can drive- even if it was an Al -falfa…
There I was wandering around Hobart airport car park dragging my bags behind me and searching for a Saab and he points to a red Alfa 33 – “Wot no Saab Swade” I opine, and he sheepishly points to his various -colours -of -red Alfa:It goes well and handles nicely.
Oh and by the way- Tasmania is beautiful – so are the girls and if you like wooden boats- the harbour is worth the trip. Saabs are everywhere too. The scenery at the Harbour Lights cafe is also rather good…
I’m not sure what to think of these “Customers are finding it hard to get money” allegations. What is the basis for this? I recently (Sept 28th) got a 100% loan for a ’08 9-3 in about 5 mins online at a 1.1% lower rate than the Saab dealer was willing to give me.
Steven,
With all due respect, and as Greg Abbott once said to me with regards to cupholder gripes, you’re a group of one. The fact that your personal experience is one way doesn’t make the opinion here any less relevant (like the fact that I only drive 10 minutes to work and don’t need a cupholder doesn’t mean that they’re not needed by others). My experience was my own.
That’s great that you’ve got good credit and can access this, but it’s a fact that a lot of people aren’t getting finance as easily as they used to.
This lawyer’s observations made sense to me. I tend to not favor a merger or bailout plan for GM. There are many Korean, German (VW/Audi), Japanese and even Chinese firms waiting for open American manufacturing market share. They are waiting for highly trained American auto workers and infrastructure to help extend their portfolio utilizing the favorable $¥€ exchange in the US. Foreign automakers products have already achieved 2011 Chevy Volt/Cruze-like fuel economy figures today (aka. VW Jetta TDI) at an $18K price range. The “Big 3″ are so far behind the 8-ball it’s not even worth any of our tax dollars. Just read this article if you have a few minutes and then write your US Representative:
http://www.thetruthaboutcars.com/editorial-why-the-gmcerberuschrysler-bailout-is-bad-for-taxpayers-and-doomed-to-fail-without-the-benefits-of-a-chapter-11-filing-for-both-chrysler-and-gm/
If only they could divorce GM Europe from GM North America. Oh wait, then there will only be GM Europe left 12 months from now…
“I think it’s unlikely that we will hear directly about any possible Sale of Saab tomorrow. Maybe just a few hints? I still think my scenario of using the new 9-5 as a bargainning chip to sell Saab is possible. Whilst everyone else seems to think that Saab would be sold to a single buyer, I’d like to suggest that a consortium might be a viable solution? GM could still retain a significant share of the brand and possibly be the main OEM supplier to a new Saab AB, but would not be directly financially responsible for the company. I’m sure this would please the beancounters at the moment. And it would get some return for selling 75-80% of Saab.
I think it would broker a deal to supply the 9-5 from Opel for five years or so to the consortium, and also supply components for the existing 9-3 and possible replacements. I think it’s less likely that the 9-4x will get similar treatment and could simply be re-badged as a Saturn/Opel/Vauxhall or Holden depending on the market. The replacement 9-3 and possible 9-1 models would probably suffer some delay, but if GM was to remain a major component supplier this could be minimized.”
That does make sense to me. I’m not against such a Jaguar-scenario.
I never liked the idea of a 9-4x anyway (not for saab at least, for cadillac it’s a perfect car)
I know that I will get alot of complaints after writing this.. But it might be time for the two Swedish brands to swollow their pride and do what former Volvo boss P-G Gyllenhammar suggested many many years ago..
Both our Swedish brands are bleeding at the moment. One company has got lots of visions and loyal follower but to few models to get around. The other larger company also have a genuine background and many loyal followers but at present loads of models that realy isn´t part of the companys view of how a car should be. Both swedish companys have been subjected to their respective owners stubborness and pigheadedness trying to make the two into something they are not.
Saab is in the hands of a company that dictates Saabs every move and has stronger brands that get the go first in everything. Caddy, Opel etc.
Volvo is in the hands of a company that try to sell Euro Fords with a Volvo shell at Audi prices.
Could a Saab-Volvo joint venture be successful? NO I´m not saying they should make Volaabs or Salvos. What I´m saying is.. Have Volvo produce cars with their core values and Saab cars with their core valus. Share some components, have some cooperations with other companys to reduce costs, and make cars with high end tech, interior quality and their respective looks on what a car should be.
I believe both would benefit from oneanother.
But.. Would Ford let go of Volvo?
Am I totaly out of my wits?
Right now, I am afraid either a Volvo-Saab or GM-Chrysler merger would be the equivalent of the Studebaker-Packard merger. And what happened to that company?
Well, kids, the earnings report was set to be released about an hour ago. Still hasn’t shown up on the Web site.
P.S. Hey, Tdjs! I’ve recently relocated to Cleveland. Glad to see some other Ohio folk in Saabs.
Seems like it is either bailout or bankruptcy we are looking at, since GM is loosing more money than expected:
http://money.cnn.com/2008/11/07/news/companies/gm/index.htm
Also, talk to aquire Chrysler has been suspended:
http://money.cnn.com/news/newsfeeds/articles/apwire/44486b3bccc270e2033d0a7b72ef8201.htm
I wonder what they discussed at the Trollhattan factory…..
Swade: I can see your cupholder point, but I’m still not seeing “Customers are finding it hard to get money” apart from the rhetoric coming from the folks suffering on the supply side. I could not tell you if I have good credit, but I’m pretty sure I don’t have bad credit. I have no idea what my scores are. The funny thing is, people all around me are buying new cars. Maybe the current state of the industry is the level that the market should have been all along? I wonder if people had not pulled so much cash out of their monthly payment by getting interest only mortgages, or cashing in on the new found equity as the availability of those loans drove up home values (that used to be a method of last resort). After which they used that extra money to buy more than they really should have (cars, trucks, blackberrys, clothes, HDTVs, you name it…)? Did that encourage GM and others to keep building more high-profit vehicles (and regrettably pissing away the proceeds) just because people had more and more borrowed money to spend? Maybe some of these are fairly obvious now. Maybe it should have been obvious earlier.