The first lot of bailout hearings have been going on while I’ve been sleeping and sifting through the initial coverage it doesn’t look like there’s much of direct interest for Saab-watchers. This dog and pony show is all about GM North America.
For those who are interested, the Detroit News has the best play-by-play coverage I’ve found so far.
The day didn’t start that well for GM:
General Motors Corp.’s driver of the “show car” version of the Chevrolet plug-in hybrid electric Volt nearly was arrested when he couldn’t roll down a window at the request of a Capitol Hill police officer. A GM spokeswoman helped smooth things over.
In many respects it didn’t improve:
Sen. Richard Shelby, R. Ala., isn’t pulling any punches. He told the three CEOs that there plans were full of “scattered facts” and little else.
“They contain few concrete details about how your companies would return to profitability,” he said. “I suspect that any sensible banker would summarily dismiss your plans.”
He asked for more detailed financial projections, which all three said they would provide.
Mulally took issue with the senator’s suggesting that Ford’s plan would not pass muster. He said what Ford provided Congress is exactly what it provided the banks when it borrowed $23.5 billion in 2006.
Have I mentioned that I really like Alan Mullaly? One thing I know from my job (where I basically spend all my time reviewing the work that others do) is that they know their job better than I do. It’s the same with these CEOs and the senators questioning them. It’s one thing to be accountable to the, but when they start spouting crap at you, it’s alright to let them know. Mullaly’s just done that, and good on him for doing so.
Of course, Wagoner and Nardelli need the money a bit more, so they’ll take one for the team and plan their revenge later.
The Detroit News noted the following about Shelby:
Sen. Richard Shelby, R-Ala., now wants to know if the three CEOs did all their own driving. You can bet he has a driver, but that is not the point. Shelby is once again emerging at the biggest enemy Detroit has in this committee – and with good reason: As we reported last month, his state is home to more foreign auto factories than any other in the United States, and it has attracted those companies there by offering those companies billions in taxpayer dollars.
Shelby aside, there were some seeking to see things with a degree of common sense and understanding:
Sen. Sherrod Brown, D-Ohio, just hit the nail on the head, exposing the double-standard inherent in this process: “We didn’t ask the CEOs of the banks to drive here in Wells Fargo armored cars … We didn’t ask them to appear before us … We didn’t ask them for a plan on how they’re going to spend the money.”
I’m sure the media will start prognosticating on the Big 3′s performances soon enough. It’s hard for me to tell just slashig through commentaries. I guess you really needed to see things for yourself.
What’s evident to me from the Congressional stuff, the Saab coverage from Europe and the chat I had with Eric Geers is that there really are two games in play for Saab right now.
Saab Sweden’s job is to come up with a plan that secures their funding for continued operations over the next 18 months or so, whilst they roll out their new model range. Their end-game is to obtain guarantees so that they can show the corporate parent that they’ve got a genuine chance at getting through.
They need the Swedish government or a consortium of other partners to replace the corporate funding that’s previously come from Detroit or GM Europe. That funding will get these cars finished and ready for market, after which the plan says they’ll be able to actually make money and provide a return to their investors.
I think we’re all pretty fortunate that the new Saab 9-5 and 9-4x are so close to coming to market. If they weren’t then GM’s options with Saab would be much clearer and the decision that much easier to make.
If Saab Sweden can obtain the guarantees that they’re looking for, then the ball is back in Detroit’s court – and that’s the second game that’s in play here.
Detroit have given an undertaking to the US congress that they would put Saab under review as part of their restructure. The options for that review include the much-covered sale of Saab, but they also include selling a stake in Saab to a partner or obtaining bridging finance for Saab via the Swedish government until the new models roll out and Saab can finally start realising some of their potential.
To give Saab a pass is going to require a locked down, watertight set of guarantees, most likely from the Swedish government. GM have have a whole heap of future finance for their North American operations riding on them fulfilling their commitments as documented and presented to Congress.
I think that’s about it in a nutshell. Saab can do all they can on obtaining guarantees, but at the end of the day, GMNA call the shots and Saab’s fate will be up to them.