This story’s hitting the Swedish press all over the place today. I’ve had two emails about it already.

Here’s the full story as printed at The Local:

Representatives for thousands of engineers at Saab Automobile and Volvo Cars have proposed that the only way to save Sweden’s auto industry is to merge both companies into one single car manufacturer.

Saab and Volvo still have “complete development organizations” which can conceive, manufacture, and sell cars on the global market, write Magnus Sundemo and Håkan Danielsson in an article in the Svenska Dagbladet (SvD) newspaper.

Sundemo and Danielsson both hold leadership positions within chapters of the Swedish Association of Graduate Engineers (Sveriges Ingenjörer) at Volvo and Saab, respectively.

They claim that together, the companies have sufficient “scale for basically all components which go into determining a competitive manufacturing price”.

At the same time Sundemo and Danielsson reject the scale advantages promised by Saab’s and Volvo’s large foreign owners. According to the two, the potential gains were grossly exaggerated.

Sundemo and Danielsson instead suggest a common development organization for the entire Swedish vehicle industry – an organization which can protect against the loss of industrial competence, they hope.

They add that there are already a model programmes on the drawing board which Volvo and Saab could begin to manufacture relatively quickly.

“The search for a future owner must be directed toward a solution by which industrial know-how and capital generated in the Nordic region and where both brands are retained in a new, common company,” write Sundemo and Danielsson, adding they envisage several owners for such a company.

Thanks Trued and ctm!!!

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My first quick attempt at a logo sketch:

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My 2 cents:

Like Sweden, Australia had two major players in the car market when I was growing up. Until the Corolla made an impression, it was only holden and Ford that mattered. In terms of emotion, it still is only Holden and Ford that matter to your average Aussie.

I can’t imagnie Holden and Ford merging, for obvious reasons. Similarly, though, the possibility of a Volvo and Saab merger has never seemed like a realistic possibility to me. But then again, if your survival’s at stake…..

I’ve long lampooned Volvo at this site and I know from hearing some old war stories from the Swedes that there is a friendly and very natural rivalry there. But underneath, who amongst we Saabnuts doesn’t envy Volvo’s full range. Who wouldn’t love a Saab equivalent of a C30 – one with a useable load space, for example?

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The thing that impresses me the most about this article is hearing a Saab (and Volvo) staffer speaking his mind.

Saab have been let down by their corporate parent.

It is wrong that Saab’s existence is threatened whilst several soul-less brands will carry on producing the automotive equivalent of white goods. I’m sure some smarmy mainstream GM fanboy will say “that’s the price you pay for being small” but screw that.

Trued translated a few sentences from the original article in Swedish that weren’t included in the edited translation at The Local:

The last years have been frustrating, We have seen how advanced technical solutions have been stopped and shipped away and has not come to use to meet the demands from consumers and government…..

….The SAAB 9-3 can with simple means get a drastic reducement of fuel thirst…..Knowledge from aircraft industry gives us possibilites to use carbonfibre composites in combination with high strengt swedish steel. enabeling safe and light cars.

Based on these quotes and the goodwill that seems to have been in the room, I hope the powers that be are exploring every possibility here.

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The following is a press release from SaabUSA and it officially contains some good news.

Woohoo!!

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DETROIT – The editors at NADAguides.com, a leading vehicle pricing and information website based in Costa Mesa, California, have named the Saab 9-3 Aero SportCombi a “Top 5 Wagon”. An important contributor to the award was the availability of Saab’s “Cross-Wheel Drive” (XWD) system, new for the 2009 model year as standard equipment in the 9-3 Aero SportSedan and SportCombi and available on 2.0T models.

“When they say engineered from jets, they mean it,” said Don Christy, president and CEO of NADAguides.com. “The 2009 Saab 9-3 Aero SportCombi is a great looking wagon with a laundry list of standard equipment. In this category, this is something special.”

Developed in Sweden with Haldex of Stockholm, Saab’s “Cross-Wheel Drive” is a pre-emptive, active-on-demand system that is activated only when required, limiting the impact on fuel economy while giving the car a surefooted, dynamic feel that enthusiasts embrace. Saab’s Cross-Wheel Drive system is designed to optimize vehicle handling and stability in all driving conditions.

“True to its Scandinavian origins, Saab has built a large part of its reputation on excellent road manners under demanding driving conditions like rain, sleet and snow,” said Steve Shannon, executive director product and brand at Saab Automobile USA. “Our new Cross-Wheel Drive technology, which delivers unprecedented levels of driver involvement and dynamic chassis control, further illustrates Saab’s commitment to offering active safety in sporty, efficient and driver-focused vehicles.”

Saab Cross-Wheel Drive is a fully automatic, on-demand system capable of sending up to 100 percent of engine torque to the front or rear wheels whenever necessary. While offering drivers sure-footed handling in low-grip conditions, its sophisticated operation also adds a further sporty dimension to the driving experience in all road conditions.

This state-of-the-art, all-wheel drive system includes two innovative features: pre-emptive engagement of the rear wheels to optimize traction at take-off; and an electronically controlled rear limited-slip differential (eLSD) that allows variable torque transfer between the rear wheels. While the eLSD is standard on Aero models; it is not available on the 9-3 2.0T.

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For those of you who, like me, haven’t herd of NADAguides.com, they provide a web based vehicle comparison service and have done so online since 2000. They also sell little blue and yellow books (good colors) with this info.

The NADA in NADAguides stands for “National Automobile Dealers Association” and is, indeed, a big deal.

So…..pop corks and celebrate a scarce win!

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It’s Monday in the northern hemisphere and that means the news wires are ticking away once again.

Here’s the latest, sent in from various people – thanks!!

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Reuters are reporting that the Swedish government is now set to offer finance guarantees to both Saab and Volvo:

STOCKHOLM (Reuters) – The Swedish government is expected to offer loans and loan guarantees worth several billion Swedish crowns to struggling U.S.-owned car makers Volvo Cars and Saab Automobile, daily Dagens Industri reported on Monday, citing an unidentified source…..

…..”It is not a question of subsidies or of the government going in as an owner, but of loans and loan guarantees on good terms,” the source said in the report.

The report also talks of a Swedish super-research center that would bring some old friends and foes together:

The report also said the government is in talks with the two car firms and truck makers Volvo and Scania about establishing a jointly owned company to promote environmentally friendly research and development.

I get a little hairy when I read about this funding for research. That’s all well and good for 5 or 6 years from now, but I get the feeling that Saab’s concerns are more immediate than that.

The good news – it looks like they’ll get the guarantees, and that means a greater potential for viability, whether under GM or someone else.

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Automotive News Europe (subs) provide some analysis of both Saab and Volvo’s prospects of finding a buyer, if that’s what it all comes down to.

As Ford Motor and General Motors consider selling their Swedish brands, Volvo’s long-term future seems brighter than Saab’s.

Here’s why:

– Volvo has a newer, more diverse model lineup and is three times larger than Saab

– Volvo has more R&D capabilities to produce its own cars

– Saab has rarely been profitable since GM bought it while Volvo has made a lot of money for Ford

– Volvo’s parent company is in a better position than Saab’s.

But to counter that, I’d like offer the following:

–> Saab have an incredible capacity to ppunch above their weight. Their R&D ability is right up there with the best of them. It’s just the R&D resources that have always been scarce. Saab can pay someone back in spades.

–> The word from someone whose worked for both companies is that Saab is a much more fluid organisation. Decisions at Volvo take a long, long time.

–> Saab has done all the work to become lean, effecient, and more focused on quality. Volvo’s journey down that road only began this year.

–> Saab will represent a much smaller up-front investment, with a leaner organisation all ready to go.

That’s just how I see it.

They conclude differently, of course:

The position of Saab is more precarious than that of Volvo. It also has less time to find a savior because its parent GM is in a worse financial position than Ford.

Holmqvist thinks the solution for Saab lies with what happens to fellow GM subsidiary Opel, which has asked for help from the German government.

Said Holmqvist: “I don’t think Saab is sellable as it is, because there is only really production in Sweden, and they are in serious trouble.”

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In US news, there are more calls for Rick Wagoner to leave his post at GM, and this year’s Nobel Prize for Economics winner thinks this whole bailout thing is just prolonging the inevitable.

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A very quick snippet to put before you an editorial in the Detroit Free Press that agrees with me — Saab isn’t going to leave the GM nest anytime soon.

Mr. Mark Phelan of the Detroit Free Press

No, not Chrysler: This time we’re talking about Saab and Volvo. It’s possible the register will ring up “no sale” when General Motors Corp. and Ford Motor Co. are done evaluating their Swedish brands, and that might be best for all concerned.

If nobody buys, it won’t be because Saab and Volvo are irretrievable brands, but because there’s no money out there and every automaker on Earth has its hands full as the global economy totters.

He puts his confidence in the lack of financing available for a deal like this, but I’m more apt to agree with his secondary points:

Ford has certainly been well served by Volvo. The brand has made money over the years, though not consistently enough.

Saab has never made a dime for GM, but it has contributed to the automaker. It’s been a test bed for alternative-fuel technology with ethanol-burning cars that account for a huge chunk of its sales in Sweden.

Both brands — if run properly — also attract customers who wouldn’t enter a Ford, Lincoln, Chevrolet or Cadillac dealership. They have loyal owners around the world and appeal to a well-educated, affluent demographic. While GM and Ford will entertain whatever offers come over the transom, they continue to work on some intriguing upcoming models for Volvo and Saab.

“If run properly”. Sounds as if he’s been reading TS!!

I agree with Mr. Phelan. Now let’s see the 9-5!

The following was received by Saab staff in markets outside of Sweden in the last few days. It was not originally in English, but has been translated online and then tidied up (for readability only) by me.

Thanks again to Djup Strupe for the info.

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Saab partners,

As you know, Saab has been in the media a great deal in the last few days. With this letter I offer you a personal opinion on the matters at hand, as it is important business facing our partners and customers. (The last few words lost me a little there – SW)

In accordance with the plan presented to the US Congress by General Motors, on Tuesday December 2, 2008, we are having to analyze various options regarding the financing of future Saab business.

Our goal is to set a strategic direction that we will continue to pursue and we are considering various options, including talks with the Swedish government with regard to ensuring funding for the development of our next generation of cars. So far, these talks have been very positive and constructive. Some services in the media have reported that GM will sell the brand. While this is one possibility of many, it is not the main focus. There are some interesting alternatives which we are currently considering in parallel (to this option).

We have continuously worked to build the brand over the last few years, to target and strengthen firmly the roots we have in our innovative Scandinavian heritage. Saab now has a unique premium brand and a strong global position (in terms of market positioning, I think – SW) – especially in relation to vehicle safety and environmental challenges in the field.

On the basis of this image, Saab has a very attractive customer base. The next 12 to 18 months will the biggest product expansion in the history of Saab …. (phrase I can’t understand – SW) ….we plan to introduce the new 9-5 for the beginning of 2010 and the 9-4X in early 2011.

Since you are at the “front” and in contact every day with our customers, you play a crucial role towards our success during this critical period. The speculation about the future of Saab will take some time to resolve. Please stay positive and not let yourself be distracted by rumors. We will keep you regularly informed about news.

I am convinced that we have a good solution to the current challenges and I ask you to join my trust in the Saab brand. I am firmly convinced that we will make it through these difficult times and emerge strengthened.

Yours sincerely

Jan Åke Jonsson
Saab Automobile AB

An interesting sidebar to the GM/Ford/Chrysler bailout talks: The junior Senator from my state, Bob Corker, is a member of the banking committee that is questioning and negotiating with the CEOs of the Big Three and the President of the United Auto Workers union. Mr. Corker is, as we may say around here, “bringin’ the wood“.

Before I quote Mr. Corker, let me say that he is somewhat unique among the Senators sitting at the table in that he is a self-made millionare, having run his own construction and real-estate development companies in his hometown of Chattanooga, Tennessee prior to becoming mayor of that city of about 200,000 (450,000 metro area). That is, he’s got some real experience as a corporate CEO. It must also be said that he has a reputation of being something of a bull in a china shop when it comes to politics.

His stance is pretty obvious from this single quote aimed at Bob Nardelli, CEO of Chrysler, from the Tennessean, my hometown fish wrapper:

“The fact is basically what your plan is about is that you want to hang around long enough so that you can date somebody and hopefully get married soon before you run out of money,”

Ouch! Of course, given that Chrysler is owned by private equity, Senator Corker is correct. The aim of private equity is always to buy low, keep the assets a brief period, then sell at a profit.

On GM, Mr. Corker has some other choice comments:

GM, he said, should offer its bondholders 30 cents on the dollar, which he said is above what the company’s debt is now selling for. The UAW should allow the company to reduce its scheduled $21 billion January payment to a fund that provides retiree health coverage, he said. And the union should eliminate a program under which the company pays supplemental unemployment benefits to fill the gap between state benefits and the worker’s usual salary.

Corker said he would not support any legislation without these provisions.

There are two items in that quote that should shock all of us. First, that the UAW is still insisting upon a $21 Billion payment from GM in January!! They’ve agreed to reduce the 2010 payment, but not the 2009. Doesn’t that seem to be a little counter to the message that has been transmitted by them to date? Second, that GM bonds have sunk well below 30 cents on the dollar. Not that it’s suprising given the circumstances, but that it’s shocking that a company like GM which is rife with assets could be seen as that worthless. It’s really an eye-opener.

The Big Three CEO’s will try to make Mr. Corker out to be an enemy with hidden motives given that our state has the Nissan USA HQ, two Nissan plants, a VW plant under construction and numerous tier one suppliers to the Toyota plant in Kentucky, the Nissan plant in Mississippi and the Mercedes-Benz plant in Alabama. That is, they would consider him in favor of transplant success. However, I believe that he would consider the loss of the GM Spring Hill, Tennessee plant and the loss of the Visteon (ex-Ford) auto glass plant in Nashville as failures, and the Tennessee suppliers to the Ford plant in Louisville, Kentucky (full-sized cars) and the GM plant in Doraville, Georgia would certainly suffer, too.