Posting’s going to be difficult for most of today, but I thought I’d better sneak in a quick resolution to the story of Tim S’s Viggen writeoff.

We heard about the unfortunate accident and recently, I wrote about Tim’s insurance woes. I’m pleased to sat he had a brighter day late last week.

The insurance company had made him a low-ball offer for his car, an offer that was based on them citing a cheap Viggen for sale – one with a blown engine!! Tim was able to source several other Viggens to use as a comparison and it was well worth it. Instead of the paltry $7,000 or so they’d offered him previously, the final payout figure will somewhere just south of $11K.

If Tim gets another Viggen he should be alright for replacement parts for several years, too, as he was able to buy his crashed vehicle back for just $400!!

Here’s a final salute to a beautiful black Viggen that did everything it should – it looked brilliant, drove magnificently, and kept its owner safe when it needed to.

I hope you land another one soon, Tim. That’ll make for a perfect final chapter to this story.

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There’s some chilling commentary from Fiat’s CEO, Sergio Marchionne, over at Reuters today.

Last week, when I did the Saab Sale Options article here at TS, there were 12 distinct companies that I mentioned, plus one wild-ass possibility and a number of un-named Russian and Chinese entities. All of these entities exist today and to varying extents, all of them should have the ability to continue existing in a rational, stable market.

This year, however, we see a market that’s becoming more rationalised than rational, and a market that’s about as far from stable as you can get. Marchionne notes that this will have consequences:

“The only way for companies to survive is if they make more than 5.5 million cars per year,” Sergio Marchionne told the European edition of Automotive News, an industry publication.

“As far as mass-producers are concerned, we’re going to end up with one American house, one German of size; one French-Japanese, maybe with an extension in the U.S.; one in Japan; one in China and one other potential European player.”

Reuters note that the only companies producing volumes of more than 5.5 million cars at the moment are Toyota, General Motors, Volkswagen, Ford Motor and Renault-Nissan.

That means Marchionne’s own Fiat is considered vulnerable, and with it the Fiat, Alfa Romeo, Lancia, Maserati and Ferrari brands. Can you imagine a world without Ferrari or Alfa Romeo?

Assuming that Toyota would pick up Subaru and that someone would pick up Hyundai, Volvo and Jeep, the following brands would have to be considered vulnerable in the medium term: Peugeot and Citroen (maybe one of those would be retained for the sake of differentiation), Maserati (currently owned by Fiat, but would you buy Fiat and keep both Maserati and Ferrari), Proton and Lotus (maybe the Lotus name will survive as an engineering arm), Chrysler, Dodge, Mitsubishi, Alfa Romeo, Lancia, Skoda, Seat, Mercury, Mazda……and Saab?

Can you imagine how much more dull our motoring lives will be without this variety to look at and think over? Actually, if you’re in the US, don’t bother answering that. There’s a lot of these that don’t sell in your market already.

I think the second hand and classic car markets are going to become all the more important for enthusiasts who want to preserve a bit of variety in their driving lives.

If you think about it, this is a path we’ve been heading down for a long time now. Whilst consumers want the biggest vehicle they can afford to run, legislators want safety and efficiency. This means that in today’s world, the process of designing a car that won’t get penalised by future legislation is basically a science project.

Companies will move more and more towards a singular optimum design for aerodynamics and pedestrian safety. Companies will move more and more towards similar architectures, not only because of the savings the mega-companies will realise as a result, but also becuase as more is known about the best handling and driveability, more companies will move towards that. As the road to perfection becomes clearer, more companies will gravitate towards it. All that there will be to differentiate them is the wrapping.

What can you do to keep the possibility of variety?

1. Keep an old car running. It’ll be harder and harder to do as the years progress, but I’d like to keep at least one car in my garage that doesn’t have any electronic aides in it. Or at least no electronic safety devices. Man and machine. Mechanical engineering. Balance. Control.

2. Demand that someone make cars that ignore environmental and safety factors. Cars that engage, thrill and reward, as well as punish when something goes wrong. This is not likely to happen except for a small number of botique manufacturers that make track-day specials (Caterham, Arial, etc) but I hope they survive.

3. Hope and pray that these new mega-companies, if they do eventuate as Marchionne predicts, preserve as many name plates and as much variety as possible.

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As I write this, it’s Sunday here in Australia. I think this is a poignant enough reminder to get in my car some time today and let it rip for a while. I might even get the 900 Aero out for a few blockies, despite my thinning clutch.

I suggest you do the same.

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Since the gauntlet has finally been thrown down, I’ve let myself think about the possibilities for Saab if GM does, indeed, sell or spin off our favorite automaker. I still think it’s a big if. As I and others have said, GM seems to want Saab and Saab is pretty well integrated with other GM organizations with both product and organizational ties. It will pretty tough to separate them.

After all, the 9-3 shares parts with Opels and Vauxhalls, while the 9-4x will have a number of GM brethren. The new 9-5? Who knows, but at one point, it seemed so tied in with Opel that the Russelheim union reps claimed it for their own! Ditto the North American distribution and service model — all GM. (I know that some of you will say that there are plenty of independent dealers left. However, they order everything from GM. Period.)

With that being the case, I think that it really only makes sense for a prospective buyer to assume only partial ownership of Saab for the short run. After all, to pull anything off successfully, the new ownership absolutely must have GM’s cooperation for a long time to come. If I were an investor looking at Saab, I certainly would want GM’s help. What better way to make that happen than to keep some of GM’s skin in game?

Secondly, any new owner of Saab will need some of the government assistance from Sweden and maybe a helping of the government assistance from the United States through the GM connection to get things up and going. Therefore, the prospective buyer will have a stake in keeping a great portion of Saab’s operations in Sweden.

Finally, we all know that Saab, at 125,000 units per year, will have a very difficult time competing with larger volume OEMs with their greater buying power and greater marketing footprint unless they are joined with another automaker.

All of this adds up to something that really only comes into focus when you realize the Ford is in the same straits, albeit less dire.

Any entity that buys Volvo should surely also buy a controlling stake in Saab and merge the two into one.

Let that one sink in for a while.

Saavo? Volaab?

This is not just idle banter. Think about it — Volvo moves about 400,000 units each year. The combined company would move more than a half a million and wouldn’t have excessive product overlap. The synergies would be significant — Saab would gain some of the operations support that it would otherwise get from GM since Volvo is more autonomous and has presumably retained those resources. Volvo would gain access to a pipeline of new products that they will need in the near future. The overlap that exists could be jettisoned. The ultimate buyer would reap the Swedish government support for both companies and yet could choose the choicest portions of both organizations to save. To top that all off, the buying company wouldn’t even have to buy all of Saab, just enough to give GM a little shot in the arm in the present.

The synergies don’t stop there. Travel costs would be slashed for many, and with only one owner to answer to, both companies would be working together to develop suppliers and to use manufacturing space. Ditto labor agreements, transportation costs, etc.

And, then, there’s the really big deal. The one that clinches it for me. Every Volvo dealer will automatically become a Saab dealer. And vice versa. Naturally, the total would have to be whittled down to about one-third less than the current number of dealers, but there are huge benefits to the Swedish car buyer in terms of dealer access and dealer support. The two automakers have always skewed to the same demographic here in the US, so I believe that their level of service would be similar to Saab or perhaps better.

It would work on a purely business level. It would really work. I’m not sure that I want things to go that direction, but it’s got possibilities.

That makes this thing all the more prophetic, doesn’t it?

It’s sleepy time for us Aussies.

I’ve covered as much of the speculation as I can, and as you can see from that link, the pundits are expecting that GM’s plans will include a sale of Saab.

I’ve tried to call Saab Sweden a few times today but they’re all “in a meeting”. Oh, how I’d love to be a fly on the wall there. Unfortunately, I’ve had to rely on email rather than getting whatever information might be forthcoming over the phone. That means we’ll all have to wait for a reply.

I don’t know if the automaker’s submissions to the US Congress will be made public today or not. It may be that the public portions of those submissions are held over until the committees start their meetings on Thursday (Senate) and Friday (House).

If details are made public, then it’ll probably happen while I’m asleep. In that event, Eggs may be busy working and therefore it’ll be up to you to keep each other updated using the comments section.

Have a good day. I’m off to get some Z’s.

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NOTE: If you’re going to leave a link to a story in comments, make sure you only leave one link per comment. More than one link will see your comment go into the moderation queue and it won’t appear until I give it the all-clear.

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NOTE 2: If you’re sick of all this bailout stuff and just want some Saabology to read, I can highly recommend the Taras Czornyj Q&A.

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After an initial contact via email, I was invited to submit a copy of my editiorial To hell in a handbasket: why the Swedish government should not assume ownership of Saab to the english language newspaper in Sweden, The Local.

The original piece was around 1500 words, which was much too long for them. I thought about trying to cut the original piece in half and then figured it was easier to just rewrite it from scratch.

The article was published at The Local today. Here’s a copy for your perusal.

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Protect Saab from public sector ‘mediocrity’

If Saab is to preserve its tradition of excellence it needs to remain in the private sector, argues Steven Wade following a recent flurry of calls to nationalize the Swedish car maker.

This week, the CEOs of General Motors, Ford and Chrysler will present before the US congress their detailed reasonse as to why their respective companies should receive loans in the billions of dollars.

There has been much speculation as to what concessions these companies might have to offer the government in return for a financial lifeline and some of that speculation concerns an automotive brand that is very dear to my heart, and no doubt to the hearts of many Swedes as well: Saab.

There has been a lot of talk recently of the Swedish government taking ownership of Saab, or Volvo, or even both. It is my belief that such a decision would be the first sad, calculated step along the road to deliberate mediocrity.

Saab is a small player on the world stage, but has a history that all Swedes should be proud of. At their height, Saabs were a shining light as to what a car could be. Much of the talk nowadays in the motoring industry is about fuel economy and building smaller cars with the room and power of larger cars. Saab has been doing this since the 1970s.

And I believe it has the plans in place to do it again.

To succeed in the automotive industry today a company has to have cutting edge R&D, progressive design, brilliant build quality and razor sharp marketing. Whilst the latter can be outsourced, the first three require insight, intelligence and planning that a government authority simply doesn’t understand, and nor should they.

The role of government is to provide essential elements that a society needs to function and grow; infrastructure, basic medical care, law and order, education, defence and a regulatory framework to responsibly govern the conduct of the private sector.

The private sector has a role to play in all of these areas as well, but their role is at the pointy end; the space where excellence and innovation are encouraged and rewarded. The space where people are also allowed to fail in their pursuit of excellence, innovation and reward.

Who would decide the strategic direction of a government-owned Saab?

How many people would have to be involved in determining and then approving the right level of steering feedback in a government-owned Saab?

How many of the best designers and engineers would stay at a state-owned Saab?
How many would accept more lucrative offers from private carmakers and other technology companies elsewhere in Europe?

The history books, and many cities of the world, are littered with tributes to the mediocrity of state-ownership. If we want to talk specifically in terms of motor vehicles, I defy you to name one state-sponsored motoring project that has truly pursued excellence.

There have been many that pursue the basic necessity of travel from A to B, most often with teeth-rattling suspension and driving characteristics that are about as engaging as a can of grey paint.

The Saab that I know and love should never be allowed to sink to such a level, but there’s a high likelihood it would under long-term state ownership.

If they survive this current mess, General Motors should invest in Saab with the same enthusiasm with which they’ve got workers in Trollhättan building Cadillacs. Saab’s design ethos is the way of the future – smaller, lighter and smarter. GM should recognize this and develop it.

Should it not survive intact, then I sincerely hope that GM sells Saab to someone who is able to make Saab what it truly can be: a company building innovative, stylish, safe, engaging and practical automobiles.

The Swedish government can’t do that. An automotive company has to have long term plans and those plans have to be determined by people who know the industry. More importantly, those plans and the investments needed to fulfill them cannot be subject to the changing will of a political party that may or may not be around in three or four years.

Unless it’s a very short term arrangement to transfer ownership to a proper owner in the private sector, the Swedish government should not take ownership of Saab, but they should provide support by helping to create conditions where the company can grow.

That’s one of the true roles of government, after all.

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Steven Wade is a rabid Saab enthusiast and has been the publisher of the Saab enthusiast site, www.trollhattansaab.net since February 2005. He lives in Australia with two Saabs, his wife PJ and dog, Charli.