A number of news agencies are reporting that GM are ready to cut Saab loose. Bloomberg started the trend and it’s continued today.
Some reports are saying that GM’s alleged plan to jettison brands is part of a cash-saving measure. Others are saying that any plan to sell or shutter Saab would be a token gesture to assure the US government that funds loaned would stay within the US.
The Swedish government have confirmed that they have had talks with Saab and Volvo, but won’t go any further than that:
Financial Times reported on Monday that U.S. carmakers GM, which owns Saab Automobile AB, and Ford, owner of Volvo Car Corporation, had approached the Nordic country’s government about financial aid to the Sweden-based subsidiaries “in anticipation of selling them.”
The heads of both companies had spoken to Swedish Industry Minister Maud Olofsson about securing funds, the FT said, citing people familiar with the discussions.
Sweden denied it had outlined any details concerning loan guarantees. FT said the Swedish government has considered devoting about 2 billion Swedish crowns ($252 million) to Saab and Volvo in direct aid or loan guarantees.
“We are discussing all possibilities. But what they write, that specific amount of money in loan guarantees, that is haphazard information taken out of context and I don’t understand where they’ve gotten it from,” said Frank Nilsson, spokesman for the industry minister.
One report claims that the promise of Swedish government money will be used as a carrot around Saab’s neck to woo potential suitors:
According to reports, GM wants to improve Saab’s market potential and sell the Swedish subsidiary as soon as possible. The ailing carmaker hopes that governmental funding will help the company raise awareness of the brand’s potential.
Further reports are saying that the Swedish government are waiting on the decisions of other governments before they make any sort of decision:
Reached on Monday by the TT news agency, Jöran Hägglund, a state secretary in Sweden’s enterprise ministry, said he was unaware of plans for Volvo and Saab to be sold, but confirmed that the government is holding ongoing discussions with both Ford and GM.
According to Hägglund, no decision will be taken regarding possible state aid for Saab and Volvo before the details of the European Commission’s €200 billion ($253 billion) stimulus package have been finalized.
Part of the package, roughly €5 billion, is expected to go support the European auto industry.
Moreover, Hägglund believes that the futures of Ford and GM depend largely on a decision expected later this week by the US Congress regarding a request for $25 billion to help bailout the US auto industry.
“We have no reason to race ahead of the pack,” said Hägglund.
So…..
Which of the two alternatives is GM up to? Fattening the calf for slaughter or seeking some padding to assuage their own bankers?
I’m hoping it’s the latter but preparing myself for it being the former. Just in case.
–
Lets see …
GM needs to develop and manufacture smaller cars which are more fuel efficient in order to sell more cars.
Do they have the necessary expertise on small and fuel efficient cars in house?
Well, they do have this strange european brand which have been make cars like that for more than 3 decades!
What is it called?
Oh yes, it’s called SAAB
Strange days indeed.
so if Saab does disapear…what will everyone here drive? bleak question I know.
Latest news!!!!
FORD MOTOR COMPANY ANNOUNCES IT WILL RE-EVALUATE STRATEGIC OPTIONS FOR VOLVO CAR CORPORATION
DEARBORN, Mich., Dec. 1, 2008 – Ford Motor Company [NYSE: F] announced today it will re-evaluate strategic options for Volvo Car Corporation, including the possible sale of the Sweden-based premium automaker.
…………………etc etc etc
let’s see what happen with Saab
regards
Saab will be sold according to source in Sweden citing internal sources within GM. We are all now awaiting the final decision (Volvo will be sold) as well as any movement by the Swedish goverment. I am not worried that the goverment will not support our car companies – I am more worried about who wants to buy them in the middle of a financial crisis?!
@MagnusE:
Hi pal, how are you?
Since when Saab 900, 900NG and 9000 are considered small cars?
I know we all love Saab, but let’s be realistic about the company!
Kram
Right now i feel like a emotional roller coaster just like that simpson-icon;)
Yeap its official now,Ford is selling Volvo,i guess we are going the same way?
It could be a good thing to be sold in a downturn. The new owner would pay a substantially lower price and therefore have much less capital invested. That would allow for more R&D and for new product. Of course you need the right buyer to come along, one that sees the potential and is willing to invest in the company.
JV,
What is your source of info ?
There was a story in Swedish AMS about GM and Ford asking the Swedish government about help to protect Volvo and Saab. Later we can read that Volvo is practically in the classifieds.
It’s easy to think this means the Swedish government could not offer anything, opening for a Saab ad in the classifieds soon.
@bastiano
“Since when Saab 900, 900NG and 9000 are considered small cars?”
I meant smaller than american cars.
I drive a Saab 900 3d from 88, always amazes people how much space there is in this car.
Dad used to own a 9000 (I’ve driven it more than 10 000 km), and now have a 9-5.
Both are excellent and spacious cars.
Ken H:
I too feel that whatever fate befalls Volvo, GM will likely follow suit. Except Saab may be the “Cinderella” sister in that no one will want to take her to the ball
Ken, I think there always is that lonely geek without much ladies skills, but a big heart and a rich dad.
Having my 9-3 on lease instead of buying it seems smarter everyday……
GM may try and sell SAAB to free up some cash, but Saab isn’t the cause of GM’s problems or the savior of GM’s products. The Wall Street Journal opinion piece at the link http://online.wsj.com/article/SB122809320261867867.html does a good job of explaining the problem that GM has. I suggest reading it to learn why selling Saab won’t help GM and relying on Saab technology won’t save GM.
I think a sale of Saab at this point could be just as bad as staying onboard and ride the storm with GM.
But if Saab were to be cut loose and end up in the hands of another company then which firm could make use of Saab’s expertise?
Leave the serious jeopardy GM will leave Saab in if they go under and look at a scenario with GM receiving a cash injection at the expense of a sell off.
So here is my short list.
I’ll leave my reasons for now as the post will become too long but here goes:
Porsche
Subaru
Suzuki
Hyundai
Renault
and finally if GM go to the wall
OPEL
There are a few other Asian companies and the odd independent investor but I just wanted to concentrate on established car companies, who could utilise and work well with Saab to develop better products for their own company but see the potential of an established niche premium brand to help bolster their group portfolio.
So looking forward to your thoughts on those 6 companies.
Saab claims that new models will bring profitability and sales of 150,000 to 175,000 units within three years. If true, it should have no worries, no matter who the owner is. If not, is there a Plan B?
There is a Swede on the GM Board of Directors Mr. Percy Barnevik. http://en.wikipedia.org/wiki/Percy_Barnevik
I know he had an old 1970 red SAAB 95 at his summerhouse near Havstenssund on the coast north of Gothenburg well into the late 80íes. He always drove the SAAB to the local stor buying an evening paper and an icecream.
He just might have a heart for Trollhättan. Lets hope so!
Indeed, I don’t know how selling Saab would help GM. If I go by the figures I can find on the net, this should have been the situation in 2007. (This is only for passenger cars, including trucks GM is bigger than Ford.)
FORD
Cars: 6,5 million
Employees: 245,000
Volvo
Cars: 450,000 (7% of Ford)
Employees: 24,000 (10% of Ford)
GM
Cars: 3,5 million
Employees: 270,000
Saab
Cars: 125,000 (3,5% of GM)
Employees: 4,700 (<2 % of GM)
Jörgen Trued,
Two things to say about Barnevik:
1) Born in my hometown.
2) He is probably the greediest one on that board when it comes to salaries, pension, etc.
http://en.wikipedia.org/wiki/Percy_Barnevik
WooDz, interesting list and to a large degree I concur, only I’ll throw in PSA Group and potentially BM or M-B. But it really bothers me that Saab could be stripped of whatever is left of its technological know-how and the brand dumped to the Chinese. Like BMW did with Rover.
Porsche – I’ll say this is the most likely buyer. All the talk of how they own the VW group now overlooks the fact that they could soon lose it. A niche player like Saab would fit well with Porsche’s philosophy. In fact, for both brands, relying on low volume, high margin products is the only way to sustainable profitability. A nice piece of trivia is that both manufacturers were pioneers in turbocharging.
Subaru – There is a certain similarity between Subaru and Saab, as in that a lot of people believe Subaru is the new Saab. They do, however, have different brand perceptions and manufacturing philosophy. Which could be a positive. To a large degree, Saab has always competed against BMW, Audi, Volvo and M-B, i would say ever since the 60s. Subaru on the other hand goes against its own Japanese competitors.
Suzuki – I just fail to see any potential in such a marriage, but I’ll admit that is probably because I am quite unfamiliar with Suzuki in general.
Hyundai – That would be an interesting match. But we could run into boardroom problems due to cultural differences. Much of this is happening within GM right now, and that considering both Americans and Swedes are part of Western culture. Hyundai has been trying to move upmarket indeed, hoping to leave Kia at the bottom end, so if there are three brands in the group, we could see the high-end in Saab, the mid-tier goes to Hyundai, and the bottom goes to Kia. Think of Audi/VW/Skoda. These are three different and pronounced market segments.
Renault – The only problem I see here is Infiniti, which does quite well in North America. For Renault itself, as an entity separate of Nissan and its luxo division, there is a lot of sense in acquiring a worldwide premium brand with established presense in the North American market, as well as good brand recognition internationally.
Opel – Like you stated, there is a big if in that GME would need be spun off GM Corp. for that to even be remotely possible. I would argue, however, that Saab’s brand image has not benefited much from its relationship with Opel. The “rebadged Opel” stigma is quite bothersome seeing it is explicitly applied to Opel/Saab, sometimes mentioned with Honda/Accura, but always overlooked in VW/Audi, Nissan/Infiniti and Toyota/Lexus.
So in colcusion, I see Porsche as the most beneficial relationship to both parties. Oddly, there are a lot of similarities between the two companies and if properly executed it could become an organic, complementary relationship.
For what’s it’s worth, I heard through the German grapevines that if GM was to go chapter 11, Germany would look at buying Opel,which has been sending it’s profits to GM NA to help the sick parent. Some people in Germany are concerned about this. If it were to happen, I doubt a German Opel would have much interest for Saab.
OMG, I can’t believe we are actually at this point. I don’t know if I want Saab sold, I am a die hard Saab loyalists and just can’t believe the death of Saab Automobile is a real possibility. How did it come to this?? UAW, Cooperate Greed? This is outrageous and I hope some European buyer steps forward. We will all see very soon…
No. 9 — you’re right that Opel wouldn’t want Saab. Why would they need them at all?
Percy Barnevik is on the board at GM? I hadn’t a clue! He was CEO of Asea Brown Boveri when I worked there! He is a very single-minded person that didn’t care if the company was one-tenth the size and still made the same profit, that’s what he wanted. Couldn’t have cared less about market share. He may care now, but then he didn’t, that’s for sure.
idk but Bloomberg ALSO said that pontiac AND saturn were going to be dealt with (sold, killed etc.)
and a very well-informed source within Saturn is adamantly denying any sale of a brand OTHER than Hummer of course.
Should I hurry to take the 90k service soon, I wonder?
according to AMS Sweden Volvo is now for sale ! till salu= for sale ,i cannot read anymore
http://www.automotorsport.se/nyhetsbrev/news/16371/%3Cfont-color=red%3E%3Cb%3Eextra-nyhetsbrev%3C/b%3E%3C/font%3E%3Cbr%3Eford-chefen-volvo-pv-ska-säljas/
Porsche? Would be great for Saab’s image but they own a huge chunk of VW who own Audi so there is very little for Saab to offer Porsche. Renault? Is massively in debt so I doubt it. People throw doubt at Opel but Opel could make Saab its performance brand as there is no such thing as a performance Opel unless you count those Insignia’s with Saab technology. I see PSA as a distinct possiblilty as they have no prestige models at all. Hyundai or Suzuki, god no! Subaru, doubtful.
I have this horrible image in my head that some two-bit Chinese firm is gonna buy Saab. They have had a Chinese designer for a good few years now but lets not get into that now as its a sore point with me.
Regretfully I have to state the following. Why is Saab in the state it’s in?
Investment from parent company GM has been lacking for far too long and the quality of the vehicles coming out of Trollhattan on the whole has been mediocre at best. Personally, I can forgive Saab and its ‘quirks’ as I just love what Saab has represented for so long ie. a turbocharged sport sedan that is relatively economical, very safe and a blast to drive. Saab/GM’s problem was they werent built as well as an Audi yet they cost as much added to the fact the marketing sucked big time! Born from Jets? Who cares? The 03-07 9-3SS was a stunningly beautiful car that still looks better than anything Audi, BMW, Merc or Japan can come out with. The facelift was sensational but then someone had to put cheesy rear light clusters on it to make it look, uh, cheap!
There has been a lot of talk about Saab buliding smaller cars but this strategy. IMHO this would be a complete disaster. You dont have to make a car smaller to make it more economical you have to take advantage of engine technology to ring out every last drop of fuel from an engine a la BMW with their 3 series engines. A 335i engine is as economical as Saabs 2.0T engine!
Will I keep my Saab? Damn rights I will coz I love it because its so beautiful to look at and an absolute blast to drive. I just worry about the future and cant help feel a little upset by GMs attitude toward the brand.
Absolutely right on!!!! Zippy
Kroum,
Your analysis is quite interesting. Thanks for that.
Couple minor comments from me:
PORSCHE & SAAB: what two companies in the world other than these two kept their model nomenclature beginning with “9″
(with exception of Cayenne, Cayman and Boxster)
HYUNDAI & SAAB: I thought about that too. Quite interesting, as Hyundai was planning for a new luxo marque but held off on it (the new Genesis sedan and coupe were supposed to be first cars in that marque) due to lack of confidence in market success. If they are interested in Saab as a global gateway to the near-lux and lux segments, that relation could be something akin to the Renault-Nissan partnership with limited joint products and R&D activities, with little (if any) geographic overlap in their respective product distribution (Kia, Hyundai, Saab). And as far as boardroom problems due to cultural differences ? Hasn’t that been something Renault-Nissan had to deal with (and likely overcome) ? Also Hyundai is a HUGE conglomerate (chaebol in Korean) that is diverse and versatile. Imagine what kinds of R&D Saab could tap into (or contribute to) if it had the backings of Hyundai ? You know, the more I think about it the more I admit that a Hyundai ownership would be a pretty darned good idea !!
Another angle that hasn’t been thrown out here is MAZDA. Mazda is currently distancing itself from Ford (or is that the other way around) by buying more of itself back from Ford.
http://www.financialpost.com/story.html?id=969287
And like Subaru, Mazda is often seen as the innovative underdog that competes globally as well as going against some its own domestic makers (Toyota, Honda). Mazda is very well versed in turbocharging and many other engineering innovations. They too contemplated going upmarket in the late 80s/early 90s with an “Amati” marque (Amati is a little-known but prestigious Italian violin-making family, coincidentally an anagram of Miata) but also held off on that just as Ford was stepping up its stakes of Mazda.
Interesting times.
Unfortunately Zippy, while GM could be blamed for many things, Saab was a money losing entitiy with a limited and severely outdated model line beforehand. If Saab Automobile was such a gem, Saab Aerospace / Scania would never get rid of it. But they did – and it was their own child, so to speak.
The sad truth is that Saab would never make it as a stand-alone brand. It needs access to the platforms and technology of a larger, wealthy parent. You could blame GM for not providing capital for the longest time, however, Saab should know how to operate in such environment – they never had access to unlimited cash for R&D. But they always had access to technology, e.g. Scania’s engineering and production expertise in turbocharging, which they successfully adapted to their own use.
So what the brand needs now is to keep costs down and find a nurturing parent. Porsche is, of course, ideal. And them owning a controlling stake in VW does not seem as much of a problem anyways as there is very little engineering and production cooperation between Porsche AG and VAG. Also we do not know for how long Porsche will keep its shares in VAG – they seem to be acting more like a hedge fund in that more so than an acquisition.
ughhh…kick me in the n@ds! Will someone step up to the plate and help SAAB realize its potential…this news is killing me.
“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”
this is very disheartening, i dont know even know what to say, i always used to think selling saab was the stupid media having too much time on their hands, but this might come true.
If GM sells Saab I’m sure it will try and keep whatever Saab personnel it fells might be beneficial to it’s own future, so loosing expertise won’t be an issue.
Whilst selling Saab might not make more than a pimple on it’s balance sheets, GM will do whatever it takes to secure a bailout. If selling Saab somehow makes it look responsible to Congress, that is what it’ll do. You can bank on it.
As to buyers for Saab, I too used to think that Porsche would be ideal, but now they own VAG it’ll just get lost in that mass of brands. If anything VAG has too many brands already.
I still favour Mercedes if they can untangle themselves from their remaining share of Chrysler?
Buying one little European brand would be nothing like buying a whole American car corporation and I think it would work.
In the meantime a consortium of Investor AB, the Swedish government and perhaps some other company could “hold” Saab until it’s future is determined. I think if GM is smart it could retain a small share of Saab. It could then remain a parts supplier, at least for a time.
Time for bed… I just fear what I gonna find here at TS when I wake up in about 7-8 hours…
If anyone decided to buy Saab, would it have to be a car company?