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Tonight I chatted with Eric Geers from Saab Sweden. Eric is the Director of Communications for Saab Automobile, working mostly out of Gothenburg.
We covered a number of topics and I’m pleased to say I’m feeling quite good about Saab’s prospects should GM make it through the current storm it’s in. After my first questions about the 9-6x, the current outlook for Saab is exactly where we started:
Trollhattan Saab: What’s the general mood around there with everything that’s going on right now?
Eric Geers: I would be naive to say that everyone is extremely confident that everything will be OK in the future. I think people have a belief in the fact that we have done the right things. The thing is that you cannot influence the economic situation. We don’t know exactly when the end of this is going to be. That’s the scary part.
But we’ve taken actions since around 2003 or 04 when we were part of the selection process for production – they were looking for where to produce a midsize vehicle (the 9-3) – and so we did a lot to shrink our costs. From a cost structure perspective, from a people perspective, the number of people and so on, we are in good shape. We have improved the factory, we have absolutely the best quality we’ve ever seen, from our warranty costs and so on – they have come down spectacularly – so we see a number of things that we can control that are all moving in the right direction. From that perspective, the people are extremely motivated.
The other thing, of course, is that you would like things to move faster with product expansion. We have been saying this, and we have been….under the leadership of Jan-Ake Jonsson we have been starting a new way that we kicked off a couple of years ago. Basically the Aero X was symbolic for “well this is going to be the new Saab”. Since then we have developed new models that you will see rolling out from next year.
Of course you want to do that faster, but at the same time there are doubts that this is the right time to launch a new model – under the current conditions and so on. But we know that that is our weakness. We have two model lines, the 9-3 and 9-5, and one of these is 11 years old and we know that that’s far too old.
So the things we control we feel very good about, also the workforce feels very good about what we have achieved. But the thing you cannot control is the economic outlook and what the effects are going to be.
TS: I’ll get to the 9-3 and 9-5 in a moment, but one of the things I wanted to expand on a little bit is….the cuts the company has made to get in shape over the last few years. We’ve been writing about the fact that cuts have been made, but what were they? What has been done in the last few years to bring the company into line?
EG: Well, a lot of things have been done. For example, in terms of people, we now have around 4,000 people manufacturing around 100,000 cars. From that perspective we’re doing well. We’ve also integrated a lot more with General Motors, significantly, to make sure we don’t duplicate to make sure that things we’re doing here… they’re not also doing in Russelsheim or in Asia. We are now an official GM Global Manufacturing System plant, so that means that we can build a car of a given size in Trollhattan as well as in other plants around the world that have the same manufacturing system. We’ve been taking out a lot of ‘fat’ out of the organisation….
TS: Has that all been in the form of jobs?
EG: No, it’s not all been jobs. If you look at the way we developed the 9-5 or the current 9-3, those were rather expensive to manufacture and to develop. Sometimes we’ve been blamed for being too much like an Opel. I can tell you that the current 9-3, in fact, doesn’t share too much with an Opel Vectra at all. To the point where you wish you would have shared more – not the things that are visible to customers, but going completely on your own – the thing that Saab did in the past – that’s not really the way to go forward. In the end, you need to get good business results and that’s what’s driving us forward…..
….All in all, we are in very good shape. You see with our neighbors, Volvo, they still have to go through all this. Their workforce is far beyond what we have in terms of the number of people and they have to go through what we’ve already been through. Cutting down further, at this point, is not a case for Saab. At this point, our ambition is to grow.
TS: Imagine it’s down the track and all the current GM stuff is sorted out and you’ve got your three models, including a new 9-5 and 9-4x. How many cars do you need to sell before you’re turning a profit?
EG: We would say that if you can do between 150,000 and 200,000 cars then you would have a very nice business. Now, at the same time, if people will ask “where is the break-even point?” then you have to ask “well, tell me what are all the exchange rates, and so on and we’ll tell you where the break even point is.” These exchange rates tend to flow up and down a bit, so it’s not easy to manouvre through this. Hoping that an exhange rate works in you favour is nice but it’s not a strategy you can build your business case around. Hope is not a good strategy.
TS: Planning to fail.
EG: Yes. So what you can do then is, for example, build a car where there is a strong demand. The 9-4x we’ll build in Mexico – which is, by the way, one of the best factories in the world in terms of quality – and that’s what you’ve got to do when you know that around 50% of your audience for this car is in the US market. You want to build it there with a low cost base, in dollars, and then shipping them from the dollar zone to the Euro zone does make a lot of sense.
——
More to come:
- Eric could only tell me a little about the 9-5 and 9-4x
- Plans for the Saab Festival 2009
- A little also on the 9-3x
- and more.
But right now I have to go to bed 
–
21 responses so far ↓
1 ctm
// Nov 20, 2008 at 11:05 pm
Wow, great read and very interesting. Thanks to both of you!
2 Eduard(Edusaab)
// Nov 20, 2008 at 11:27 pm
That’s really cruel. I was reading and waiting few days for this and you cut the interview, aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa, jajajajajaja xDDDD
I will be waiting for more, thanks a lot Swade
about the 9-6x, those “legal”/”lawyer” movements, when happen always means something, are quite suspicious.
regards
3 Wulf (NW Michigan, USA)
// Nov 20, 2008 at 11:53 pm
Great article with information you won’t find anywhere else.
4 detroitsaab93
// Nov 21, 2008 at 12:33 am
Great info, wake up Swade, I need more!!!!!!!
5 Nate 9-3
// Nov 21, 2008 at 1:01 am
That great stuff. Thanks Swade and Mr. Geers.
6 Kroum
// Nov 21, 2008 at 1:54 am
Great stuff, Swade and Eric! Can’t wait for the rest.
And btw. this line may somewhat explain why two models that were almost ready have been delayed:
7 SaabKen
// Nov 21, 2008 at 2:01 am
Great stuff, Swade. That’s the best Saab insight we’ve had in awhile, esp. in these rather gloomy times.
You can’t go to bed. You’re not allowed to. You have to finish telling us the story ! [wink]
Good night
8 JBG
// Nov 21, 2008 at 2:48 am
THANK YOU THANK YOU!
9 albert
// Nov 21, 2008 at 2:56 am
Thanks Swade, great reading. Keep up the good work.
10 RMinNJ
// Nov 21, 2008 at 3:21 am
Thanks…its great to hear what’s going on. I suspect you didn’t ask him questions
like “why did you get rid of the classic saab turbo gage and if one wants it they must
buy the special aero or premium model” ?
Of course asking what they’re doing to be around in the future is good also.
11 ctm
// Nov 21, 2008 at 4:18 am
From LeftLaneNews:
“A group of bipartisan U.S. senators have reached a compromise on an auto loan agreement that will provide aid to General Motors, Ford, and Chrysler. A press conference will be held a 2:30 p.m. EST to discuss the agreement. Shares of General Motors shot up 30 percent on the news. Shares of Ford rose even more sharply, up 40 percent.”
12 Mailr
// Nov 21, 2008 at 4:19 am
I found this (in swedish): http://di.se/Nyheter/?page=/Avdelningar/Artikel.aspx%3FArticleId%3D2008%5C11%5C20%5C312349%26SectionId%3DEttan
The interesting info is that the author said, as a comment to the statement that Saab are just rebadged Opels and the brand is worthless, some 9-5 info:
“Sorry, but that’s nonsense. That was true for maybe ten years ago, but the future Saab models waiting around the corner is far from rebadged Opel models. I myself have seen the new 9-5 and think – in fact – that it might be a car that beats the world with some amazement.
In addition, GM has already paid for the tools to produce both 9-5 in 9-4X. It would be totally pointless in that situation to shut down the brand.
It is from the 2010 Saab can finally start to pay back money to GM.”
13 Dippen
// Nov 21, 2008 at 4:39 am
Cool interview!:)
Thanks Swade & Eric Geers
14 Joe Lobo
// Nov 21, 2008 at 5:39 am
Seems like something good will come out of all these years of austerity !!! Look forward to the rest.
15 ttidaero
// Nov 21, 2008 at 5:54 am
This kind of give me hope. Many comment latly have doomed GM, SAAB and the auto industry as a hole.
Of course there is problems and yes, some part of automotiveindustry might just be put down and foregotten.
But if a manufacturer or a brand is showi g the spirit and they are noticed fore it, the shop is more likely to survive.
What I meas is that a company will not likely be left behind if there is good products, engaged peronel and not the least a name in the business that many people knows about. The only thing missing is that the product is known to be good. It’s not enough that it is good.
But beeing good is the wayto adress that.
If this spirit hits the meadia, the bloggs and peoples mind this is a turning point
……….
By the way, thoose of you who still dont beleve KAZ or Swade or any of the TTiD loving Saabisti…Take drive, hit the pedal feel the power. This is stunning.
I’ve done 10000 km since august. And now the fuel economy is down to realy nice levels. How a bout 4.9 liters per 10 km when cruising at 110 km/h
16 Ron57RC
// Nov 21, 2008 at 6:14 am
It’s good to here that SAAB have been making and implementing constructive plans with a view to the future. It seems to me that they have been doing their best to ensure that they will be a valuable asset to have when the dust settles.
As I continue to view this site I am mightily impressed by the informed comment which I read from it’s main authors and enjoy the comments which others make upon the items / articles which appear.
Swade, I’m looking forward to the continuation of the write up of your conversation with Eric Geers. Sleep well.
17 pekko
// Nov 21, 2008 at 6:41 am
great! Cant wait rest of story
18 turbin
// Nov 21, 2008 at 7:54 am
ttidaero, plenty of Saab spirit around here and great to hear how your TTiD is going. Maybe you should do a write-up and some pics for Swade…
19 fred
// Nov 21, 2008 at 9:25 am
I dunno…this guy sounds like hes been drinking the GMDetroit Kool-aid. They just aint gonna be selling 150 to 200K cars a year without getting NAmerica up to ~100K. That could mean diesels or hybrids or both, but no more V6s. 19/24mpg aint suckin em in the showrooms. BTW VW Jetta TDI is “green” car of the year at LA auto show FWIW.
20 Arnold
// Nov 21, 2008 at 9:33 am
Good work Swade. Most informative.
21 Kroum
// Nov 21, 2008 at 9:50 am
Fred, I don’t see the problem with selling V6 cars alongside diesels, E85 and hybrid vehicles.