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The Swedish government announced that it was going to provide a bailout package for its automotive industry a week or so ago.
It was only today, however, that they finally submitted legislation through the Riksdag and had it passed by 156-114 votes. 79 members either abstained or were absent.
Not everyone’s happy with it, though. Certain members of the opposition Social Democrats say the package doesn’t go far enough:
The Social Democrats’ economic political spokesperson Tomas Eneroth slammed the government’s reaction to the problems plaguing the Swedish auto industry during a special debate in the Riksdag on Thursday….
…..He characterized the government’s measures as being too little too late.
“Sweden’s capacity as an industrial nation hangs in the balance,” he said….
….“What exactly is in there,” he wondered, suggesting it should include measures such as an extension of the green car tax credit and a tax rebate for environmentally friendly disposal of old cars.
The Social Democrats want the Riksdag’s constitutional committee (KU) to review the government’s proposed car industry aid package. The measure is so poorly supported that it could be considered misleading, claims the party.
The main pillar of the package is the 28 billion kronor worth of credit guarantees for 20 billion kronor in loans from the European Investment Bank (EIB).
The presentation of the measures gives the impression that the loans will be ready as soon as the government submits its guarantee, but that’s not the case, said the Social Democrats in their filing with KU.
I have a feeling that if the Social Democrats were in power at the moment then we’d be looking at Saab and/or Volvo being state owned in a reasonably short time frame.
——
Saab Germany have indeed started to capitalise on the Saab 9-3’s top placement in the DEKRA reliability study.
They’ve issued a press release about the award and I hope it’ll be a standard headline in their advertising material for the next few months.
A snippet, poorly translated by Google:
Rüsselsheim. The Saab 9-3 is the most reliable mid-size car – this is the result of the DEKRA Report on vehicle shortcomings for 2009. The experts analyzed data from more than 15 million cars, divided into seven categories of vehicles. The report shows information from used cars, which is modelled on reliability, low repair vulnerability and thus high quality.
In the mid-size class drove the Saab 9-3, both at the mileage up to 50,000km and 50,000 to 100,000km of the tip – 93 or 84 percent of Saab vehicles were audited and showed no shortcomings.
That really is a poor translation, but I think the numbers translate OK.
——
It seems the Bush administration really is going to push for “an ordely bankruptcy” in exchange for funding assurances.
The White House said Thursday it was “very close” to reaching a deal to prevent the collapse of automakers, but said it is still considering aid for an “orderly bankruptcy.”
“We’re nearing a conclusion. We’re very close,” White House spokeswoman Dana Perino said this morning, saying the president was narrowing his options on how to prevent a new blow to the weakened U.S. economy. “The president is not going to allow a disorderly collapse of the companies. That is not an option.”
“There’s an orderly way to do bankruptcies that provides for more of a soft landing. I think that’s what we would be talking about,” Perino said.
So the question you’ve got to ask yourself is: Where would Saab figure in a bankruptcy proceeding conducted by a court in the US?
We need a buyer.
–
8 responses so far ↓
1 Markac
// Dec 19, 2008 at 9:07 am
I’m sure there’s a buyer out there. They’re just waiting for the right time to buy and I’ve got a feeling that’s pretty soon.
I wish the new owner would offer me a job. I’ve had enough of mine this year. Too much competition and too many cutbacks to my hours. I’ts not always fun working freelance!
I sure hope the new year is better for everyone including Saab. Hell, I even hope GM survives in some shape or form. Saab’s going to need a parts supplier for quite a while!
Have a great Christmas Swade. Thanks for all your efforts and thanks for keeping me occupied (reading TS) when I’m not working much!
2 vagabond
// Dec 19, 2008 at 9:37 am
The Chinese should step forward and buy now.
3 Markac
// Dec 19, 2008 at 9:59 am
Don’t say that word! You’ll get Zippy all upset again! Anyway I think the Ch****e are more interested in big GM than little Saab?
4 PT
// Dec 19, 2008 at 10:31 am
The Chinese government has something like 12 Trillion US in cash reserves that the US govt is quite nervous about. Perhaps this would be a nice way for some of that to be re-conciled into the US treasury? Looks like the government will be acting as administrator anyway.
Also overhead that the British govt is being asked for guarantees and cash to support Jag/LandRover? How does this happen under TATA’s ownership?
Wierd times.
5 Karen
// Dec 19, 2008 at 2:47 pm
Well, I don’t think the Chinese have that many USD. The general estimate is $12 TRILLION USD in global cash sitting on the sidelines. China holds about two trillion USD in surplus. do not know if that includes Chinese holdings of US debt paper of about 500 million.
I heard about the Brits and Jag/LR – that’s about the 15,000 jobs in Britain, and Tata is caught in the same global credit squeeze right now. Probably did not help that their Taj Hotel in Mumbai was terrorized, but Tata is a very healthy industrial company. Just need some help with their new acquisition’s jobs in Britain. I am not sure how Jaguar cultists feel, but the Queen loves her Land Rover, and I am sure there is a military link with LR.
Sorry to be abrupt – was just checking the weather forecast as I finally escaped last week’s ice storm and came back to New York for the week. oops – have to drive back early Friday to beat the snow.
Was gratifed that SOMEONE in Saab marketing is awake – there was an ad for the Saab red tag sale on the New York Winter Storm Watch screen.
As to the orderly bankruptcy – that is Chapter 11. Means the Feds will likely offer a bridge loan topay the parts suppliers to avoid the liquidation Chapter 7. That is what happened to Lehman Brothers – sudeen Chapter 7 on 9/15, and we all know that turned out very badly for the world.
So, where would Chapter 11 leave Saab? Low on the list of assets to sell. The real rpiority will be to wipe out bondholders, rework legacy costs, and probably adjust the UAW wages that killed the Senate deal. And hope that demand picks up for ALL vehicles as credit squeeze un-squeezes before too many more people lose their jobs.
When Tata bought Jaguar/LR, they made sure the sale included all intellectual property and the R&D.
It is totally reasonable for GM to sell Saab brand and intellectual property, Trollhatten, while still being contract manufacturer through Opel. One cannot predict whether Opel will also be designated as an asset that GM has to sell.
The whole point is to buy time until credit and demand returns to reduce current inventories.
Las Vegas got three inches of snow (what?). The more snow this winter, the better Saabs will sell.
Heard on National Public Radio today how a dense network of state laws protect the dealer franchises. The manufacturers CANNOT sell direct to the consumer in the U.S. THAT also may be part of any Chapter 11 re-structuring. The dealers have to buy inventory, and then sell it. Imagine what would happen to the supply chains if the dealers became manufacturer showrooms and service depots. One GM dealer in Ohio ordered the high mileage car in July, and it took three months for GM to fill his order, and now they are just sitting there.
Wish I had my 1987 900 for the drive tomorrow. The 9-3 is not as good on black ice.
Thanks for this blog!!!!!
6 Black Saabath
// Dec 19, 2008 at 9:02 pm
Ideas for 2010 and beyond. Less (models) is more!
The current downturn is laying the ground for the biggest cultural change since
WW2 and is reconfiguring the basis for how brand building – engineering – sales
- marketing will come together. The new concept of Marketing the “the-hell-out
-of-them” will not only reduce nr of brands, but maybe the nr of models that brands
needs to offer its consumers.
Saab has been been trying for years (quite unsuccessful) in aiming for a model in
every market segment. Maybe Saab was never ment to be a big brand like the others.
Does it needs to be like Toyota or BMW, when it really is a small brand.
Saab should build more cars, but less models ( no more 9-1, 9-2, 9-3 & 9-7 )
to strengthen its image as nishe maker. Its model program needs to be 2 iconic
models tops, that is super saabish, produced by the low-carbon-footprint factory
up the river from the trollhättan hydro-dam, not in some factory in Mexico or
Germany.
Look back at the original ur-saab, and how it captured the post WW2 world of
the 50s, by its super iconic yet understated functional and streamlined engineering.
Many of the design criterias In the post – financial – melt -down years past 2010s,
will be a return to the ur-saab-age in many ways; Smaller cars, more powerful and
efficeint engines, more functionality, more identity.
Saab has always been the brand that would identify with the changing of times.
The turbos of the 70s were world-wide-icons in a petrol-crisis-hit world.
The downturn of today, will help Saab recover its true identity, and not create products
for big markets, but cars for small individuals.
If Saab would be sold, liberated by its owner, is should own its own flag-ship-showrooms,
that empasises on the a new sales concept. Consumers should be able to say that there
are many brands but here is “only one Saab”. I dont car if saabs are sold, in a shed, a small
shop house or in a restaurant, as long as it would be unique.
The best way to improve Saabs independant, alternative image, its relationship with consusmers
and motor journalists, would be to break most ties with GM. The negative association with GM at
this point is a heavier burden, that the savings it makes by using same factories, engineers and parts.
Gm might have kept it alive till now, but for the future lets be clear on how cars are gonna be sold.
It would be an enormous appreciation of consumer goodwill if saab and gm went separate ways.
It would almost be like rewinding the tape to the mid 80s when a 900 turbos made the front covers,
forgetting the rather nice but bland models of the 90s and focusing on being an icon for 2010 and beyond.
7 Mailr
// Dec 19, 2008 at 11:06 pm
Note that US bankruptcy laws are not the same as Swedish. If Saab Automobile AB becomes bankrupt and somebody files for bankruptcy, GM loses controls immediatetly (unless they lie). It would not be up to GM to find a buyer, but to a court-designated bankrupty administrator whose task is to minimize the total losses, which also include future salaries covered by state guarantuees and looking at transactions that moved assets out of the company ahead of the bankruptcy. There is also an composition system that also means that suppliers may use their claims on the company to buyout the company or in practice veto one (if the sale doesn’t cover all the loses). And I think there a quite a lot of local suppliers that would look quite hard at what the end result would be, my guess is that this process is much less likely to result in a manufacturer that buys Saab and move the production out of Sweden.
This scenario MAY happen, and this MAY be better for Saab. But I dont KNOW. I just wanted to point out that a Chapter 11 for GM may not mean the same for Saab.
8 Tompa
// Dec 19, 2008 at 11:39 pm
This is so like the opposition.. Wether it´s left or right. What the others do isn´t ever good enough.
I voted for the sitting government because they wanted a change and more money to the working class. Now that the former SD government (Together with the greens and the commie parties) is in opposition they all of a sudden think that the government ain´t doing enough of the things they themselves was agaist doing.
So reading something like this is just … Well I can only laugh.
/Tom