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I’m sure that there’ll be some news out of Sweden soon. I’d expect Saab’s Jan-Ake Jonsson will be issuing some sort of statement or doing a newspaper interview or something.
Trued reports in comments that he’s already been on the radio there, saying that “the 9-5 is just about ready to launch as a new flagship!” Apparently his tone was quite positive, as it should be when you’re looking to sell your company.
I’ve also got a couple of questions lodged with Saab’s Eric Geers and Jan-Willem Vester and hope to hear from them some time after their phones stop ringing.
While we’re waiting, maybe it’s time to take a breath and look over where things are at. There was a lot of discussion today.
——
Officially speaking, Saab are “under review”, which I guess lends itself to a number of scenarios. These are just my guesses, but let’s go anyway.
1. Yes, sir, we’re killing off Saab (wink)
One train of thought could be that GM are saying whatever they have to say in order to get the money they need. Secretly, they all really love Saab and can’t wait to see the 9-5 released as soon as possible so that their Swedish secret can be unleashed on the world.
If you believe that one, I’ve got some swampy real estate for you to look at.
2. Do Nothing by necessity
It may be that they do their strategic review of Saab and find out it’s going to cost almost as much to get rid of them in terms of dealer money and automotive talent as what they’d get in terms of purchase price. Seeing Saab’s such as small part of their bottom line, they might just decide there’s money to be made and keep the brand.
3. Shut ‘em down
They own the factory already. They can sell the property they don’t need. The Swedish government will bend over backwards to offer concessions that keep jobs in Trollhattan to manufacture other GM premium compact models. If Saab are as joined to GM as they’ve told us in the past and a buyer is too hard to find then they might just save themselves a sales and marketing budget and close the brand down.
4. Pull Saab out of the US
They’re reputed to be profitable outside the US, so maybe they could scale down and just be a brand outside the US? Possible, I guess, but there’s economy of scale issues there, especially with investments in new models very soon down the pike. They’d want to recoup some of that and pulling out of their biggest market’s not going to get that done.
5. Red tag sale time!!
The final option, and the most likely according to most of the pundits, behavioural analysts, historians and yours truly, is that they’ll look for a buyer for Saab, the way Ford did with Jaguar. They have a new 9-5 waiting in the wings (think XF) to fatten the calf and they’ll look to deal based on Saab’s global nature, giving ready access to international markets.
This will cut a small number of dealers, a comparatively small administration and marketing division and it won’t cost GM too much by way of lost opportunity. In exchange for all that, they get some desparately needed cash and free some floor space to push their beloved Cadillacs.
Why?
One of the compelling reasons to believe they’ll go this way is that they submitted a plan to the US Congress that requires several steps of financing.
GM asked for $4 billion straight up, another $4 billion in January and another $4 billion after that to see them through to 2010. In addition to all that, they want a $6 billion option for a line of credit with the US government, who are their only financial option right now.
With this stepped finance plan proposed, I can’t help but think that GM are going to have to be good to their word and conduct a thorough review of Saab. If that review returns a verdict in favour of keeping Saab, they’re going to have to be pretty convincing as to why.
——
There’s still a lot of questions about the plan that GM put forward.
Why did it address Saab but say nothing whatsoever about the rest of GM’s international business? What about Holden here in Australia? What about GM Europe? What of their operations in China?
I understand that the American market is the big problem right now, but if GM go down they’ll take the whole lot with them.
——
That’s it as I see it. It’s all just guesswork at this stage until we hear something more from the source.
Here’s a final thought: Is there someone, a buyer, already waiting in the wings? If you have a look at recent history, GM have been downsizing Saab in the US for some time. When I spoke with Eric Geers last week there was a definite air of expectancy that Saab would continue on and that the 9-5 etc would come as scheduled. This didn’t seem to me like confected optimism, either.
To top that all off, whilst I’ve been typing this, Trued has chimed in with another Jan-Ake Jonsson snippet from a radio interview via comments:
On the question “will saab be sold to another Car Company?” he was that microsecond hesitant and said “there are many interested companies in the Automotive sector both in europe and elsewhere” .
Here’s hoping….
–
32 responses so far ↓
1 Saaburban
// Dec 3, 2008 at 7:48 pm
GM needs to make Saab an example of its plan to downsize! Its really that simple.
Here is how they do it, while getting some cash for it! Lets put the 5 point show on the road.
1. Sell Assets; Sell all offices and factories in Sweden by promising to keep producing in them. Buyer would be Swedish taxpayers.
2. Get a loan / bailout to keep GM sweden alive; Bank would be Swedish Taxpayers
3. Sell Saab to a co-owned company (51%GM, 49% S.GoV), Investor would be Swedish Tax Payers
4. Longterm investment, Sell remaining shares 51% in Saab, when market picks up, make a profit.
5. Make money; Sell development packages, platforms nuts, bolts to the new co-owned company must use.
Remember how Ericsson and Sony sold their mobile phone divisions, and set up SonyEricsson moving
all production to Flextronics.
I wouldnt be surprised to see GM and Saab set up a new company called SAAB CARS.
2 onhighbeam
// Dec 3, 2008 at 7:48 pm
it’s a sad thing that GM will eliminate saab cars for good… and what’s next? eliminate other gm cars like saturn?well i hope not…
-onhighbeam
3 Mats
// Dec 3, 2008 at 7:51 pm
Well in the question “Who buys Saab” there’s two questions, Who buys the brand and Who buys the Thn plant. It’s not necisarily the same company….
4 Mats
// Dec 3, 2008 at 7:55 pm
Saaburban, thanks for adding another % or so to the 35% I already pay in income tax here in Sweden……
The Swedish prime minister has already made clear that the gvnt will not be owners of any kind to either Saab or Volvo… There will of course be incentives to potential buyers to keep the jobs here but ownership… idontthinkso.
5 ctm
// Dec 3, 2008 at 8:07 pm
Why did it address Saab but say nothing whatsoever about the rest of GM’s international business? What about Holden here in Australia? What about GM Europe? What of their operations in China?
True. So they really only talked about the brands on sale in the US? I found it odd, but as I said yesterday – maybe it makes sense in that they really need GM Europe and GM Europe is not the problem. Take Saab away from the US market is a cheap price to pay.
6 Saaburban
// Dec 3, 2008 at 8:11 pm
Why is it so silent about volvo these days.
If u were thinking about buying a brand, would you really go for
saab when you can get volvo or even better both, with hummer
thrown in for free.
If the exisiting auto players have enough of their own problems,
we all have to look at the Abu Dhabi Sovereign Wealthfund, with
trillioins in black gold. If they are trying to move the assembly of
Airbus to the dessert, what stopping them from assembly some
cars over there. The Arab world is one of fastest growing regions.
Scania just decided to put a truck factory in Bagdad. Im not kidding.
Just wonder what the Swedish government would do, or can do?
Its a new world order!
7 PT
// Dec 3, 2008 at 8:11 pm
Mats, try 46% income tax that I pay in Australia.
The tough part about doing ANYTHING right now is:
1) There is basically no credit to be had
2) Everyone is playing defensive, no-one is creative. Its a game of minimising damage and so it gets nasty fast.
3) Everyone wants to offload risk and they are all looking for suckers to buy it. No-one wants to be a sucker.
8 Eduard
// Dec 3, 2008 at 8:19 pm
This is the famous “commitent” with the brand and “the brand is on the move”, of what hands??
bla bla bla….
from autonews.com. Soon we are going to know the true future for Saab.
GM wants quick decision on Saab’s future
General Motors is considering selling its Swedish premium brand Saab.
“We will look at all the possible options, including possible sale, starting immediately,” Fritz Henderson, GM’s vice chairman and chief operating officer, said.
Henderson said a speedy decision to the future of the Swedish brand was desirable, but would give no timeline for how long it will take.
“We will work to bring a resolution to this. Sooner is better,” Henderson said in a conference call.
The Saab review is part of GM’s restructuring plan, which the automaker will submit to the U.S. Congress this week.
The plan says GM will focus on its “core brands” of Chevrolet, Buick, GMC and Cadillac.
In addition to the Saab review, GM said it was looking at alternatives to its Saturn brand and will reduce further its manufacturing costs.
GM has already carried out a review of its Hummer SUV brand.
In Europe, Henderson said the company was talking to employee representatives at its German unit Opel about cost savings.
He added that he was pleased with the reaction to Opel’s new products such as the new Insignia upper-premium sedan, but said: “The conditions in Europe are miserably difficult at the moment.”
The automaker is asking for loans of up to $12 billion to enable it to keep running through December 31, 2009.
GM said it will need to draw the first $4 billion in December 2008.
In addition to the bridge loans, the company is requesting a $6 billion line of credit to provide liquidity should a severe market downturn persist.
GM said it would repay the loans as soon as 2011.
9 Mats
// Dec 3, 2008 at 8:22 pm
PT, well the 35% is just the basic tax, then because I earn over a certain level per year I have to pay 55% on the part that’s over that level, and then again there’s the 25% VAT on almost anything I want to buy except books and food… owell….it all sucks….well mostly except for when the shit hits the fan, then it blows….
10 Markac
// Dec 3, 2008 at 8:23 pm
If the new 9-5 indeed turns out to be Saab’s Jaguar XF as I’ve often suggested, it still has to be supplied from Opel either until whoever buys Saab sets up to produce it themselves, or produces a replacement. So it may end up with a relatively short life.
If a new buyer doesn’t want to take that deal and has other plans, it’s probably too good a car to waste and could very well end up as a Vauxhall/Opel Senator model above the Insignia?
I read some time ago that the 9-4x might never be sold as a Saab and could possibly end up as a Buick. I think that highly likely now. (I wish I could borrow that guy’s crystal ball!)
Perhaps thats no great loss? I think Saabs XWD future lies more with crossover versions of the 9-3 and the 9-5 rather than SUVs or CUVs. I believe Saab missed a golden opportunity with the 9-3x Crossover Coupe. Unfortunately under GM’s steerage it missed too many opportunities. Hopefully it has a better future in someone elses hands?
11 Ronan
// Dec 3, 2008 at 8:26 pm
I have been following this blog quite closely over the past couple of days, but it seems to me that GM will try and jettison Saab. Unfortunately, there seems to be very little prospect of finding a buyer as sales for all companies are going through the floor and the last thing they would need would be to expand their range to include a loss-making marquee. How long would they keep it on the market before deciding just to close it? I really hope that doesn’t happen, but it looks the most likely scenario to me.
12 Joe Lobo
// Dec 3, 2008 at 8:28 pm
One thing is for sure, the GM monster that we used to know will be gone. There will be no more gigantic ownership and a devour to swallow more as the “size matters” mentality/goals are all but dead. Accordingly, all the pockets of GM owned businesses around the world will no longer be under their ownership. In particular the Holdens, Saabs, Isuzus etc etc will become business in their own rights with some form of GM capital but not the majority. This will too include some entities that will be formed in the US as the old big heavy truck alike monster cars will no longer be produced by the old monster. There will be still agreements in place to share parts, some development, technology etc etc especially to help the US based businesses to create more compact and competitive cars that the market wants. We got to remember that that is how Subaru was operating at some point which GM owned 25 % or so and Fuji had majority. In my view that’s how the future will pan out.
13 PT
// Dec 3, 2008 at 8:33 pm
Ok, well at that point you win Mats. Still, you get to live in Sweden which is a pretty nice place.
14 Grumpy
// Dec 3, 2008 at 8:53 pm
On the upside now Saab has a chance to rebuild a decent global distribution network so the cars can be properly marketed and sold instead of being dragged through the disinterested quagmire of local GM offices.
15 WooDz
// Dec 3, 2008 at 9:37 pm
How about Saab “go it alone”?
a quick summary.
* Get €2bn loan from EU/Swdish governments with a 2012 payback
* Keep ties with OPEL for 9-5 SS, SC an X
* review 9-4x
* Look for cheaper XWD achitecture supplier for 9-1 with potential abillity to “extend” the platform for NG9-3.
* Loan out engineering Dept to developing Asian markets for Turbo-charging and Safety
* Work with outside agents for co-developed future propullsion systems.
Cut TV advertising and use alternative mediums.
16 lensaffair
// Dec 3, 2008 at 10:05 pm
I’m not that sure, if these are all bad news after all. GM hasn’t had that good influence to our favorite brand, so why looking so pessimistic in the nearer future of Saab?
IMHO: Saab got a great design language, one that the people would love (if they would see it more often). Saab entered very early the green sector with bio hybrid and ethanol technologies. Saab is a “new” brand, with fresh thoughts about the automobile for tommorow.
Apart from the fact of worldwide economic crisis: Who wouldn’t want to buy such a brand?
17 progolf
// Dec 3, 2008 at 11:03 pm
If SAAB is sold, much of the dealer network in USA would go, at least all the GM owned/franchised dealers. The same would be the case for Germany, although sales there are very low. Nobody can buy SAAB unless they have access to a dealer network in USA and SAABs would have to be built in GM factories for many years to come. Unless they already have a likely buyer, this mentioning of SAAB is just to show Congress that they are looking at every aspect of their business (and to force the Swedish governments hand).
18 WooDz
// Dec 3, 2008 at 11:22 pm
I think the media and the bandwagon of pundits have done a pretty good job at weakening Saab’s name. You only have to look at the plethora of Blogs sites and the strong anti-Saab comments that follow to see Saab’s true reflection on the average Joe. Words like Struggling, Troubled, Loss-making all contribute to a didstastful picture of a company with no headway. It’s no wonder that some of the so called ‘top industry’ experts have a likened way of thinking. Put that infomation in the hands of board members and Saab on the outset just doesn’t convey a good business case.
However; the news that GM will make a ‘review’ of the brand including the possibility of a sale may just give a few companys a jolt to explore a viable business case. As I mentioned my short list in a previous post.
Porsche doesn’t seem to be struggling under the current economic decline, is freeing up a 20% intrest on VAG and could do with a lower segment brand in their portfolio with similar innovative design and engineering processes. (I’m sure the co-developed Boxter Diesel program is far from dead.)
Renault/Nissan were very much in the limelight back in 2004, with rumours flying about a possible aqusition of Saab. GM even went to the extent of a press conference in Rüsselsheim to stamp out the allegations. Renault also quite competent in the Turbo-charging area could see Saab as a worthy niche segment to complete a coherent brand strategy. Nissan “Entry-level” Renault “Mainstream” Saab “Premuim” to pit against VW/Audi and push “upper premium” Infinity toward BMW, Mercedes and lexus.
Subaru I’m sure would like to have a stab at the premium market but their products are just not going to be strong enough. To get Saab onboard at a resonable price could pay good dividends for them
Hyundai. Owners of entry level Kia, Hyundai could do with a Premium brand. With downsizing very much in trend Saab can help this group acheive some great products at very affordable prices.
China based company Brilliance; now starting to have a good stab at the global market lack safety in their vehicles. The B6 for example could only achieve 3 of a maximum 5 Stars in the European NCAP tests. In today’s world that is just unacceptable and the company could certainly do with some input from Saab.
So there are 5 possible’s where a good synergy tie-up could make a lot of sense. I still think that any sale of the Saab brand will be detrimental and could quite well lead to the end. Apart from my previous post of Saab “going alone” and making a few market adjustments I still firmly believe that GM should find a solution for the brand that doesn’t incl. shelving or killing and finally give the company what it needs to succeed.
Sorry for the spelling mistakes…..
19 Grumpy
// Dec 3, 2008 at 11:29 pm
Woodz, I would add SAIC, GM’s partner in China, they have failed with Roewe, at least to an extent and may see the benefit of Saab in the Line-up. Secondly they could start producing the 9-5 in China with as much effort as Opel in Rüsselsheim thanks to the platform strategies.
20 Iain
// Dec 3, 2008 at 11:31 pm
If it was about are promising more efficient cars with fewer, but better differentiated, nameplates then logically Saab would stay with either Pontiac or Buick, plus GMC, going.
(Base = Chevrolet, mid-lux = Pontiac/Buick, high-lux = Cadillac, sport-lux (BMW/Audi market) = Saab)
But it’s not about protecting GM or leaving the General in the best shape possible. It’s about protecting US jobs. This move is, by necessity, political. Any foreign nameplate known in the US (Saab – they are “German” after all) needs to be offered up for sacrifice to protect US industry. The argument runs: Why should the US Government bail-out foreigners?
As soon as the electorate realise that their Suburbans are built in Mexico and their Camaros in Canada (for those that realise Canada isn’t a US state …) expect calls to re-assign production *at greater cost* to US plants.
Foreign nameplates not known in the US (Holden, Opel, Vauxhall) need not be mentioned at all. If the tax-payer doesn’t know about them then they won’t complain. Remember: the Astra is a Saturn.
Can Saab survive alone? I doubt it.
Would BMW, Mercedes or Volkswagen-Audi be interested? Probably not.
Toyota (Lexus), Nissan (Infiniti), Honda (Acura)? Doubt it.
Peugeot/Citroen or Renault? No.
FIAT? Maybe.
Most likely, for my money, would be India. One group’s already bought LR and Jaguar and there are several cash-rich individuals and industrial groups over there who can afford to sit-out the recession with a brand-name under their belt and come back to market in three years time. Saab could even be brought into the LR/Jaguar fold as a mid-high brand with Jaguar as the high-high brand (9-3, 9-5, XF, XJ. Lose the X-Type).
I do hope it isn’t the Chinese. They never seem to do any development, just adapt designs for local conditions and nothing more.
On the other hand, I could be completely wrong.
21 van god los
// Dec 3, 2008 at 11:36 pm
With all due respect woodz, Porsche has audi. I don’t think they want internal competition from saab. Subaru is owned by toyota and they have lexus. Hyundai is starting up it’s own premium brand (genesis), so no need for saab.
Renault/Nissan : they have Infiniti (Nissan) but don’t have a European premium brand. There could be a synergie between infiniti and saab.
Brilliance : if I’m not mistaken GM wants to keep the saab know how and R&D. GM would just sell the current line up (maybe also the next 9-5 ?) and the brand name. That would be a second rover/roewe debacle (Has anyone already seen a roewe in the streets of their home town ? I rest my case).
No Saab needs an established car manufacturor taking over ownership. Saab has 2 things going for them : it is a (1) global (2) premium brand. As I posted in an other thread, Fiat and PSA are the best options because they have no global nor an acknowledged premium brand but do have the know how to build saabs.
22 Iain
// Dec 3, 2008 at 11:59 pm
With respect to van god los, I really don’t want PSA buying Saab.
I previously owned a 305 and it was an awful car, as was the 206SW that I had foisted on me recently for a business trip. And the 406. And the 307. And from someone who’s tried one, the 207 as well. Mediocrity sells, which is how Peugeot could bail out Citroen 30 years ago.
Alongside the 99, I own an XM which is beautiful. Until you have to fix it. The build qualiy and design compromises have to be seen to be believed. (Everything you ever heard about the hydro-pneumatic ride quality, however, is true. I don’t understand why everyone else sticks to steel springs. An h-p Saab? That would be interesting!)
IF, and ONLY IF, they promise not to make Saabs outisde of Sweden, and to use Saab platforms for Peugeots rather than the other way around, it would be bearable, but otherwise it’s a big NO.
23 Adam
// Dec 4, 2008 at 12:53 am
I don’t think this focus on the core brands comment is anything new. That’s how Saab got to where it is right now. Underinvestment.
But reading through the plans, if I were a Senator looking at this bailout-triage situation, I’d say Ford isn’t too far gone but GM and Chrysler are too far gone and look to only be money pits at this point. I don’t know that all of GM wouldn’t collapse anyway, even with Federal money.
24 TC
// Dec 4, 2008 at 1:45 am
I have never believed that we should worry too much about saab’s performance in the US. It is a european brand with strong loyalty, admittedly from a small demograhic niche. So why not pull it out?
25 Karen
// Dec 4, 2008 at 3:16 am
Renault, BMW, and Tata are all mentioned as buyers. Volvo/Saab = 15% of Sweden’s exports. And Opel is mxed up in this. On to most current post…
26 Nick
// Dec 4, 2008 at 4:08 am
One option may be to create a sort of Swedish car conglomerate between Volvo and Saab that would be majority owned by the Swedish government, with perhaps a foreign entity taking a minority interest but providing the necessary liquidity for this to work. That might kill two birds with one stone when it comes to Ford and GM needing to downsize. This may be a case where if we want to continue enjoying Swedish design, safety and engineering excellence, something of a merger of equals would be in order here.
For my part, I would never buy a Saab owned by a company from countries such as China and India that have absolutely no automobile manufacturing heritage/know-how even if they’re still manufactured in Europe.
27 zippy
// Dec 4, 2008 at 5:30 am
Mentioning Saab in the same sentence as China makes me wanna heave, enough already!
I actually think that Fiat and Saab are a great fit. After all, Fiat supply diesel engines to Saab already and the Fiat Group is actually building some great cars these days.
28 Wulf (NW Michigan, USA)
// Dec 4, 2008 at 7:54 am
More from Automotive News:
GM talking to investors about Saab sale
Automotive News
December 3, 2008 – 11:54 am ET
General Motors is talking to potential investors who could take partial ownership in Saab. Jan-Ake Jonsson, managing director of the Swedish brand, said GM and Saab are talking to several investors about putting money into the Swedish company. He did not say who Saab is talking to, but sources at Saab owner GM say other automakers and large engineering houses are among the interested parties.
“We are looking for investors to get some external funding into some activities, such as accelerating product development,” Jonsson told Automotive News Europe today. GM announced a strategic review of Saab on December 2. GM’s chief operating officer, Fritz Henderson, said the review includes a possible sale of the loss-making brand.
Saab is also talking to the Swedish government about the government taking a stake in the automaker, which employs nearly 5,000 people in the country. Jonsson said a decision on Saab’s future including possible new financing or new stakeholders will be made in the next two or three months. He declined to reveal how much money Saab is seeking.
“A total sale is far down the priority list. We have integrated ourselves into GM as an organization and on the product side,” Jonsson said. A complete shutdown of Saab also “is totally off the map,” Jonsson said. “Next year we will start to roll out new products and that is a great opportunity to get some revenue.” He said Saab has exciting plans, including the launch of the new 9-5 next year and new models after that.
Said Jonsson: “That together with the strength of the brand will position Saab in a very competitive position in the market place.” In August, the Swedish financial daily Dagens Industri reported that Saab’s loss for 2007 was 2.2 billion kronor ($360 million) compared to a loss of 2.9 billion kronor ($474 million) in 2006. The newspaper cited the group’s annual report filed in Sweden.
29 turbin
// Dec 4, 2008 at 8:20 am
Sir Branson, your time is now. Bring on the cash.
Depends on how Mr Virgin is doing, anybody know? Not about to wipe himself out in some crazy round-the-world thingy?
Not sure why anybody hasn’t even wildly speculated about ‘Virgin Saab’ before (in my recollection anyway). One time 9-5 Biopower driver, maybe not now (?), but as for the near future?
30 turbin
// Dec 4, 2008 at 8:37 am
While I’m in wild but plausible speculation mode. How about Mr Dave Richards (described as the ‘Branson of motorsport’) and Branson get together for a Prodrive/Virgin Saab stakeholding. Using the Aston Martin platform they can engineer a green supercar solution with the Aero-X without having to tame the AM power-house image. Surely the gorgeousness of recent Saab concepts dove-tails nicely with AM. This gives the Middle-East connection as well. We all know Aston and the customers have the freakin money!
Think about it…. long and hard…..
31 PT
// Dec 4, 2008 at 11:03 am
CAR Magazine recently mentioned Aston & Saab in the same sentence when commenting on the Paris motorshow. They pointed out how both marques have very distinctive design language and how this is an asset as they work with limited ranges . It was quite a complimentary statement AND there was a picture of some car deisgner dude sitting on a Saab bike accompanying the story.
32 Paul Humpage
// Dec 4, 2008 at 2:30 pm
Regardless of what happens i hope they dump the Griffin badge (as they will have to shortly) and use the Aeroplane logo at the top of this post.