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I’ve just got off the phone with Eric Geers from Saab Sweden once again and we chatted about the options that Saab are currently pursuing.
We’ve read in reports from Swedish newspapers that selling Saab is quite a way down the list of priorities for the senior executive at Saab Sweden. I can tell you from my conversation with Eric this evening that that definitely seems to be the case.
Whilst reports say that there are a number of parties that have already shown some interest in Saab, our conversation focused on Saab’s #1 priority right now: ensuring funding for ongoing Saab projects and trying to persuade the Swedish government to assist in creating market conditions that will stimulate activity.
——
Trollhattan Saab: You’ve been busy?
Eric Geers: Man, let me tell you, it’s been unbelievable….all up to the announcement and then afterwards – all night. And then at 6.45 the next morning we had the TV stuff….then radio and more TV. The day was completely full. Let me tell you, last night, almost the whole night there were people standing in front of the gate.
This is how emotional Sweden gets about this. This is what the car industry does to Sweden.
TS: I imagine if was Holden here, people would be going crazy, too.
EG: Yeah, it was incredible. There’s a lot of people involved here. You have the car industry, you have the government…and everyone’s look now not just the survival of the car industry but there’s government issues; from a labour perspective, etc etc. Here in this country, 15% of our exports are related to the car industry. It’s the biggest contribution there is…
TS: So what are you telling them all?
EG: What are we telling them? Well, what is your view on what’s happened?
TS: I’ve been reading all of the reports and getting as many translations as I can and it seems to be that selling is not something that’s being looked at closely right now (in Sweden). It seems to be that it’s probably being explored but it’s not something that’s being looked at closely. You’re looking at other alternatives first. There hasn’t been too much detail on what those other alternatives are…
EG: No. There’s basically no detail at that level on the plans. Absolutely not. If you use the term “strategic review” then, looking at Volvo, for example, people think that means we’re going to sell it but what people tend to forget is the other side of it, that there’s other options. Now, the question is, is it at the top of your option list or is it at the bottom of your option list? And the other options are basically forgotten. So what we’ve been trying to tell people is that we are looking at other ways of financing future Saab business, which is basically what we’ve been doing for the last few months.
TS: I guess a lot of people assumed a sale because of what’s happened with Hummer
EG: yeah, but there are also a number of other options. I think it was around eight months ago that they announced the strategic review for Hummer
TS: it was a long time ago….
EG: it’s seem that the only thing that’s in the media is then, OK, it’s for sale. And the same has happened to Volvo. Whereas the other options were forgotten. So we tried to explain yesterday what that could be and why they will be, as we see it, on the top of the list…..
….It involves a number of options that we’ve considered, like project-based funding to even equity ownership. We’re looking for the best financial options that will secure a good outcome for a successful Saab business.
TS: With the equity ownership option, does that mean that General Motors would be a joint venture partner with someone else in operating Saab?
EG: You might look, for example, at the Swedish state being a part owner. That could be for a bridge period, for a short time. That’s the sort of thing that we’re looking at. It doesn’t necessarily have to be like that. You could also say that we’re looking for external funding and look at specific projects. Now, what those things are is not something that we talk in public about but we have a few people and partners that we’re talking to.
TS: So the other day when Fritz Henderson gave his call about the presentation they were doing for Congress, he didn’t mention any of these other options for Saab. He said that it was going to be under strategic review and the only specific option that was documented really was the possible sale, which I think is what has got a lot of people talking about a possible sale.
EG: Well, he did mention when he was asked the question by Automotive News that there are several options including the sale of Saab.
TS: I guess we’ve all focused on that option because it’s the only specific one that’s been mentioned…
EG: ….which is understandable. If that’s the only one that’s mentioned then it will tend to come out like that.
…..What we’re doing is that we’re working very hard with the Swedish government. Today there will be more discussions with Saab, General Motors Europe and the government. Of course, the government, because it’s taxpayer’s money, they have to take a stand as to how they’re going to support. There are a lot of issues at stake – like what are they allowed to do within the European Union. They can certainly support the industry with support for research and development, which is what they do now with around half a billion kronor a year.
There are basically two things we’re asking – one is to get the market back, to get demand back and do everything possible…. we have a very old ‘car park’ in Sweden. We (i.e. Saab) have about 400,000 old cars out there and I think Volvo has around 1,000,000. I think after Switzerland and Greece it’s the oldest car park in Europe (i.e. old car population) because the cars hold together pretty well.
So one thing we want is for them to incentivise that. You could get a bigger incentive for buying an environmentally friendly car like a Saab Biopower etc etc. So there’s a number of things they can do to get demand back. That’s the big issue right now, the problem we’re facing: demand has gone. You look at the US market and demand has gone from 16 million to what, 11 million? It’s not a case of the wrong car or whatever, the demand has gone.
So we need them to do whatever they can to get the demand back. That’s not easy, but that’s what we have to do.
The other part of what we’re talking about with the Swedish government is, as I said, securing funding for operations, including the development of next generation product, etc.
TS: Is that where the problems with the EU rules come in?
EG: Indeed. They can’t just say “here’s a bag of money. Good luck with it”. They will look also at what the German government are doing, what the French government are doing – they are focusing a lot on their own countries. It’s a bit of a puzzle that will require a lot of discussion between governments and with the EU and so on…..One element of that is reasarch and development, which is allowed within the legislation and then there’s other things.
For example, state owneship is something that is not forbidden in Sweden. I think the Swedish state has something like around 55 companies that they own – energy companies and other things. Even in Germany, the state has a stake in Volkswagen. So that’s something that’s not forbidden, it’s just politically a case of..well.. is thing something you want to stand for, or not? That’s the thing that they have to sort out….and I should say it’s not the whole auto business, but a part of the auto business as a bridge to better times.
So what we’re looking for is security for finacing for the Saab business and whether that’s state ownership or guaranteed loans or something, that’s up to the government to decide. It’s not only part ownership that’s the option.
TS: So that’s guarantees for loans, should you need them?
EG: No, it’s guarantees to be able to finance future business requirements
TS: So that’s pouring money straight into the business rather than providing guarantees for loans?
EG: Well, as I said, either you own a stake in the company, which means you buy part of the company, which could be for the short term, or you guarantee a loan because in the current market it’s not easy to get finance.
We believe we’ve got a strong and relevant brand with what we’re doing with turbo technology, etc. And except for the current circumstances, the premium market is growing. At this point, we’ve run the business basically with one model. The 9-5, even though it’s eleven years old still sells in amounts of around 15,000 but basically we’re running the business with one model. So that means that we have to replace the 9-5, which we’re going to do next year but also we have to broaden the portfolio, which we’re going to do with the 9-4x and 9-3x etc.
If you look at the 9-5, which now sells around 15,000 and then you look at the 60,000 we sold when we first launched it, you can see where we’re going….we believe that at around 150,000 to 175,000 cars, we’ll have a good business. So if you add the numbers from the 9-3 to the new 9-5 and the 9-4, especially with the 9-4 being made in the dollar zone, then we have a pretty good chance. And we believe firmly that that’s going to be the case.
TS: With your own economic situation, have you heard anything from the Swedish government about if or when they’re going to provide those incentives that you’re looking for?
EG: At this point the Swedish government has not presented anything. Yesterday there was an expert Swedish commentator on Swedish television saying that he believes something might come next week or so, but really we don’t know at this point. We just say “hurry up a little” 
TS: Can they move that quickly given that it’s close to Christmas, etc? I imagine that’d be something that would have to go through the Swedish parliament.
EG: I’m not sure exactly how that will have to work, but I know that things will have to move quickly.
TS: Do you know roughly what sort of time frame you’ve got to present a case to General Motors in Detroit?
EG: No, but as to the external partners and funding and so on, I think within a few months, that’s what we believe. With the Swedish government, we just ask that it comes fast. There’s a lot of pressure now, from people: commentators and experts, the other parties who are not currently in government. But the discussions we’re having with government now are very constructive and very positive.
TS: If the government does decide to take a stake, and it sounds as if that’s a primary option that you’re pursuing right now….
EG: Well no, that specifically is not the primary option. But at least, we want to have some option from the government, some guarantees to secure future financing of the Saab business. How they do it is something the government will have to decide on.
TS: OK. Well if they do that for you, isn’t that going to put a lot of pressure on them to do it for Volvo also?
EG: That might be. Volvo…Saab… everyone has different requirements. It might be that it’s going to be similar. We’ll have to wait and see about that.
–
TS: Thank you. I think that’s enough for me to digest for now and I hope you have a calmer couple of days.
EG: Yes. I think the last call last night ended at 1.35 in the morning and at 5.37 in the morning there was another one. At least there was a few hours in between.
TS: Was that local people or people in the US?
EG: Swedish media. The Swedish media is extremely engaged, extremely engaged in everything that’s going on with the car industry. Lots of experts and lots of opinions.
TS: Including me!! I’ve got opinions flowing everywhere at the moment
EG: (laughs) exactly……..here in Pixbo, where I’m standing, we have the next generation 9-5 in this building..
TS: You’ve got it standing in the building where you are now?
EG: Yeah.
TS: Send me a photo! Just snap one with your phone and send it to me.
EG: (laughs) it’s an awesome car. Extremely cool.
TS: Is that a moving version or just a clay model?
EG: It’s not one one with complete engines, etc. It’s more one for working the interior and so on. There are moving ones out there, too, but they’re not in this building, so…
TS: You mentioned interiors, so I’ll ask you an interior question if that’s alright…
EG: Yeah
TS: The concept interior for the 9-4x and all that lovely dashboard treatment that we saw, is that being carried through to production with either the 9-4x or the 9-5?
EG: What we’re trying to do with current concept cars is not to be too far off the real production cars. So that goes for external and for internal design. Now, whether it’s glass or what else it might be, I can’t comment too much, but it will be….close. It will be different, very different.
——
Once again, I’d like to thank Eric Geers for taking the time to chat at what is without doubt, one of the busiest weeks he’s had in a long time.
–
42 responses so far ↓
1 Robin M
// Dec 4, 2008 at 9:55 pm
very nice reading again, well done Swade.
2 ctm
// Dec 4, 2008 at 10:17 pm
Yeah, thanks again to both of you for taking the time – and for painting a more realistic picture in contrast the this either/or thing that goes on in the media at the moment.
3 J4
// Dec 4, 2008 at 10:21 pm
Eric,
Succes is just a choice. Go for it!
Swade,
Compliments!
4 Per
// Dec 4, 2008 at 10:41 pm
I feel a little better now
5 David Blumberg
// Dec 4, 2008 at 10:54 pm
After reading this I feel much more peaceful about Saab’s future. The media does tend to always report the most dramatic side of things, so getting a more levelled, insider coverage of events is good. I can sleep more peacefully tonight
Saab will live on, survive the crisis and come out of it renewed and stronger than ever. That’s what I’m gonna hope for at least hehe.
But one thing that annoys me (as a swede) is the Swedish government. Why would Maud Olofson not want to extend the “environmentally friendly car incentives” (miljöbils premie)? This is extremely counterproductive. The government is supposedly green, why not encourage people to buy green cars? Sweden has a really old “car park”, new green cars would eleviate that problem? Both Saab and Volvo need the green car sales, why not help them out? Why must governments always be just a little bit behind the float (slow)….?
6 Moosex
// Dec 4, 2008 at 11:05 pm
Thanks Swade! Great job especially getting those last couple of questions about the future models in!
7 ctm
// Dec 4, 2008 at 11:07 pm
David Blumberg,
1) There is always a risk that the sellers just raise their prices a bit all while advertising that the buyer will get a rebate from the government and in the end get “a lower price”. Thus most of the incentive goes to the seller. That is the main problem with this kind of incentives and I’m a little against them. They create an artificial market.
2) A huge amount of the sale for Saab and Volvo in Sweden are company cars. I have seen figures between 50-75%. I can’t say they are true for one or both of the brands, but I know they are very high. I’m not sure this kind of incentives applies to company cars or that it really matters in the buying decisions. I think other factors at the moment could be more important. So the incentives could end up favoring smaller cars from other brands (of course, still good for the environment, but without effect for Saab and Volvo).
8 David Blumberg
// Dec 4, 2008 at 11:15 pm
CTM,
Well I was mostly thinking of, for example, free parking, free entry/exit to Stockholm, lower taxes etc. Something that will affect the customer on a daily basis, not just the one-off purchase bonus. But come to think of it, will that disappear in 2009, or is it just that one-off bonus? Maybe I jumped ahead…
9 Daniel B
// Dec 4, 2008 at 11:22 pm
Thanks alot for this Swade and Eric,
And regarding the NG 9-5 you have to say that this must be the best kept secret in the world at the moment…. Sounds like it´s gonna be really really cool, and we STILL have NO idea on how it´s gonna look
/D
10 Pekko
// Dec 4, 2008 at 11:42 pm
Way to go Swade!! Great stuff! Did you already received cellphone pic of next gen 9-5?:)
11 Lilo
// Dec 4, 2008 at 11:45 pm
Why not look at apple success? 3 models, eco firendly, well done, premium brand, only few but good motors – this would work. I would sell it to apple and next 9-3 named iCar. Saab would became new industry icon.hell, it just needs creativity in mamagement a pation for new ideas. And somebody like Jobs.
12 Ivan(MuzX)
// Dec 5, 2008 at 12:25 am
Thanks Swade, thanks Eric, it was really interesting reading and gave me a little hope.
13 eggsngrits
// Dec 5, 2008 at 12:40 am
Great read, fasinating to see the new stuff right there and you can’t say a word…
14 mr_ebbot
// Dec 5, 2008 at 1:03 am
Great interview,
One of the best I have read so far about the crisis.
I hope Saab can get some mone so the can role out there new cars. It is so close…
I agree with CTM on the enviromnet incentives. I tink it is better to find new ones. For example maybe the should give more incentives for puttin an end to old cars? Also as CTM points out a lot of new cars from Volvo and Saab are corporate cars. I am not sure what way is best to stimulate that market.
15 Martin N
// Dec 5, 2008 at 1:04 am
Trollhattansaab just gets better and better!
This is so much more intelligent than the “Saab for sale! Volvo for sale! Who will buy Saab and Volvo?!” articles on constant repeat in the Swedish media.
Way to go.
16 Bernard
// Dec 5, 2008 at 1:18 am
Swade,
Great work.
Did you ever dream when you started this blog that you would have direct inside access to Saab management?
I am in awe of what you’ve accomplished.
17 van god los
// Dec 5, 2008 at 1:20 am
Swade, or you just make these interviews up to reassure us a bit or you must be one hell of a charming guy to be able to get an interview from geers at this time.
Either way, GREAT JOB !!!
18 saaburban
// Dec 5, 2008 at 1:30 am
Does anyone remember how close Apple was to bankruptcy a few years ago? It was really when the GM equivalent type; Bill Gates bought a stake in the company, that steve jobs got money to develop all the great ideas of today. Saab will raise out of the ashes, stronger than before, if it can secure some financial backing, while still being part of GM. I do think the americans can reinvent their own car industry, in the same way that they won space races, putting a man on the moon, giving saab a share in the new green hightech technologies. The new Saab 9-5 flagship will be a huge hit im sure. Here in Asia, people are getting tired of Lexus and BMW, and if Im right, a high tech saab, that lives up to its Powerful Past, will be a huge Success. Saab will be that alternative brand, that will bounce back like how Puma did a few years ago, after years in the wasteland. Eric Geers, has this calm in his voice, that is more than confident in declaring that, the tru battle for saabs suvival was 2 years ago. Saab has probably the best designers in the world at this moment, and they know that what aero-x did in saving the brand, has to be done on every model, packaging irresistable saabs for a world dying for understated-cool-turbos. If we learned anything from american movies, the underdog, will always pick him self up, and win in the end. Saabs rather unglamorous last 20 years, is actually emphasising what a great publicity stunt it will be, when saabs can compete with the best, and being humble abt its success.
19 Mike C.
// Dec 5, 2008 at 1:34 am
I feel a little better, nice work.
20 SaabKen
// Dec 5, 2008 at 1:43 am
Wow, thanks Swade. You’ve done it again.
And of course our most sincere appreciation to Mr. Geers for his time, despite his very hectic schedules.
I think there is a place for a new book to be published out there called: “MR. SAAB, Part II – the Life and Times of Steven Wade”
21 Nate 9-3
// Dec 5, 2008 at 1:51 am
I appreciate this information. I always feel better after Mr. Geers talks. He’s like morphine in this painful situation.
22 tom
// Dec 5, 2008 at 1:53 am
Thank you for some peace of mind after all this GM crap
but is it possible that one hand does not know what the other hand is doing?
After reading and watching all the coverage concerning the lastest in this most historic time in the automotive industry i find it amazing that the big wigs are so out in left field that they should be removed from the game.
Can or will EGM and NAGM split into 2 companies?
23 zippy
// Dec 5, 2008 at 2:00 am
Great stuff, Swade.
I only assume that the 9-4X and 9-5 are dead in the water?
24 ctm
// Dec 5, 2008 at 2:30 am
David Blumberg,
Well I was mostly thinking of, for example, free parking, free entry/exit to Stockholm, lower taxes etc. Something that will affect the customer on a daily basis, not just the one-off purchase bonus. But come to think of it, will that disappear in 2009, or is it just that one-off bonus? Maybe I jumped ahead…
Good point. There are of course incentives like that, but 1) they are not much compared to the cost of a new car in Sweden, and 2) some only benefit for people living in metropolitan areas. Also, the regulations the government use when classifying a green car is not necessarily the same that cities uses to give out their incentives, so that part is unfortunately a mess itself…
25 saabyurk
// Dec 5, 2008 at 2:39 am
Thank you Steven for your efforts, and thank you Eric for being so open and available.
I haven’t been commenting on this crisis because it got me rather depressed and many others said what I was thinking anyway. But now I feel somewhat better, and more hopeful. I’ll be expecting to be able to buy either a 9-1X or a smaller 9-3X sometime in the not-too-distant future.
Saaburban: Nice comments.
26 Eduard
// Dec 5, 2008 at 2:45 am
Live!! the senate comitte
http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.LiveStream
regards
27 detroitsaab93
// Dec 5, 2008 at 2:53 am
Interesting read and for once I feel decent about the situation……….
28 Peruzzi Oslo
// Dec 5, 2008 at 3:50 am
Great interview. Finally I can calm a bit down;)
29 mo
// Dec 5, 2008 at 3:52 am
by any chance did you ask him about the future of the griffin badge?
btw great interview, only at trollhattansaab.net can we get meaningful info like this.
30 Danni
// Dec 5, 2008 at 4:02 am
The only pleasure I got was to take my MY01 9-5, wash it, took it for a can around the block, parked it and smiled what once was my technological piece of wonder in my world. Reading this piece basically told me that there are two coins: I will wait with bated breath whatever transpires. As long as I can admire and appreciate my old stagger and knowing that better times are ahead, I am kosher with it, whoever buys Saab.
Nevertheless, when a company falters, management is usually canned. Why are these highly strung and paid executives allowed to run amok and try to save their stock options when the ostrich head in buried dead in the sand?
31 Tompa
// Dec 5, 2008 at 5:42 am
Warms my heart to read the words of Mr Geers.
Go Trollhättan GO!
32 Saabboy1
// Dec 5, 2008 at 5:55 am
I don’t know I am watching Rick Wagner tell policy makers that the money needed will be for the US only. I don’t see how he can take any of that money and invest it into Saab R&D, or new vehicles at all other than MADE IN THE USA vehicles. This hole thing is starting to go sideways if you ask me. Ford has said Volvo is for sale. So I can’t see GM playing with fire on this bailout deal, by spending any money on Saab. My best guess is that Saab is going to be sold.
33 Ubermich
// Dec 5, 2008 at 6:01 am
Mr. Brown just told the not-so-big 3 that all of this money is from American tax payers, therefor all of this money needs to go into US parts and R&D
34 Saabboy1
// Dec 5, 2008 at 6:14 am
If I am Eric Jeers and Company at Saab I might consider the possibility that they are going to be ON THERE OWN, and ask the Swedish Government to take them over, if they don’t find a buyer in the next 3 weeks. I don’t think GM is going to get the money, and even if they do I don’t know how they are going to be able to meet those benchmarks come March 31, 2009 with this economy the way it is? If anything GM is going to be left with Chevrolet, Cadillac, and maybe GMC. That’s it.
35 Dippen
// Dec 5, 2008 at 6:16 am
Thanks Swade & Eric Geers for a great interview and giving us the latest info:)
TS is the best:)
36 MarkS
// Dec 5, 2008 at 8:19 am
Tompa, I’d like to second that!
Go Trollhättan GO!
Swade, thank you so much for your efforts. Hope has worn a bit thin but still remains!
37 Markac
// Dec 5, 2008 at 8:42 am
Good interview.
I think it’s time for GM to get out of Saab the way they got into it. Sell of 50 per cent, relinquish control and sell off the remainder once the new owner/consortium has clearly defined it’s future product strategy. These future products may or may not inclue GM parts. GM could remain a minor shareholder if a considerable number of GM parts are still used.
A bailout might only delay the inevitable with GM and if Saab were to remain with them, it will most likely go down too. None of us want that. GM have used up all their chances with Saab and Saab now needs to be rid of them, even if not all at once.
38 1985 Gripen
// Dec 5, 2008 at 3:42 pm
That was some seriously great reporting, Swade. Kudos. Only TS would be able to feature an interview such as that.
I don’t know how you manage to juggle a job, a family, and this blog. But however you do it, you do it right. Thanks.
39 Bob Sinclair
// Dec 5, 2008 at 4:10 pm
Even though I’ve been retired from the Car Wars for quite a few years, I continue
to have a strong feeling for Saab, and a keen interest in the business despite how
the marque has been handled by GM since they started calling the shots.
According to figures just released, total Saab sales in the entire United States last
month came to just 852 vehicles. Eight Hundred and Fifty in the entire nation!
It’s sad in the extreme.
Despite the current dismal outlook, I sincerely hope an adequate resolution can be
found – for the sake of all Saab loyalists everywhere, the work force in Sweden and
abroad, and the Saab dealer network who have invested so much in building their
Saab business.
Bob
Santa Barbara CA, USA
40 bk-aero
// Dec 5, 2008 at 6:40 pm
I’m really curious what the new 9-5 will be like.
But I’m sure, it won’t be similar to the Fisker Karma. THAT is the kind of car, Saab should build. It has the 2 litre DI Turbo from GM (downsizing and so on), it has hybrid drive, it looks (in my opinion) stunning and it manages 2.4 litre per 100 km (or 100 mpg) when driving to work or doing your shopping!!! And – surprise – the production is sold out until mid 2010.
41 Konsta
// Dec 5, 2008 at 7:37 pm
Swade, you are truly a beacon of light. You being able to transmit this info to us is just great. I´ve always thought that there´s a difference between what is said to assure stakeholders etc. and what is really happening. That seems to be the case in here as well.
In one of US newspapers´boards a guy told that he used to work for Ford Flying Division and that his job had been terminated. However flying Ford execs in charter planes is more expensive than them being flown in corporate jets but that seems to be the “reasonable” thing to do to sooth politicians.
Have a wonderful December, hoping for nice presents for Saab and us all
Cheers,
Konsta
42 wilfried
// Dec 5, 2008 at 11:51 pm
Nice for Swade & his trollhattanreaders/commenters this interview actually took place. I hope Swade, you’ll maintain a good relationship with these guys and others within Saab (or GM/Saab).
Let’s hope the situation doesn’t change dramaticly the coming days/weeks/months, with real production models in the pipeline.
With insignia already available, new 9-5 can’t be too long from production.
(I took a look at the possible insignia engines, apparently they continue with their own 2,0 diesels (1956 cm3) and not the 1,9 – (1910 cm3 alfa/fiat-) engine. Turbocharged petrol 2,0 4-cilinders and 2,8 V6 are similar with actual engines available at saab. Mid 2009 the insignia will also be available with a 2,0 biturbo CDTi diesel with 140kW/190ps, similar with the Saab TTiD I guess.
I wish the saab-models differentiate at lot from this opel, but will it actually be just another differentiation in terms of body- & interior design. Saab needs to get rid of that opel-connection in terms of “new 9-5, it is based upon the opel insignia”, I can imagine what the journo’s will write (again) … .