Saab and GM Wrangle Over Billion Dollar Bye-Bye
Now that’s its all over bar the shouting (Saab has filed for the Swedish equivalent of bankruptcy), the shouting begins. Saab’s new owners (themselves) say they need $1B to stay in the game, and they want GM to pay it. (Reparations?) Automotive News [sub] reports that GM is willing to surrender a big chunk of your taxes to cut bait and [Swedish] fish. But not a billion. “GM Europe’s head of communications Chris Preuss said GM was prepared to provide some funding for Saab but the brand needed outside money as well.” And who in their right mind would provide the lion’s share of this IV drip? “We have asked the Swedish government for loan guarantees for $600 million to give Saab a balance sheet as an independent unit which will allow it to continue.” The Swedish government has said no. So Saab is hitting up the European Investment Bank for a €500m loan. So . . . now what?
GM’s support would also extend to the development costs and tooling for the new 9-5, 9-4X and 9-3X, which will launch in the next 18 months.
GM will also continue to provide technical support to Saab in the future and provide parts through licensing agreements, Preuss said, but there were limits to the support GM would provide.
Preuss said: “[GM President] Fritz Henderson made it very clear that GM will be out of Saab one way or another by the end of this year.”
What’s the bet Saab will be out of business by then?
More by Robert Farago
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You are probably right Ingvar, I'm at risk of turning into a sentimental old fool. Saab didn't need to end up this way. GM has destroyed so much. Maybe Volvo has a chance at survival if Saab is put down, much as ending the sad Chrysler saga could be necessary for Ford's survival.
Per Reuters, Saab, from date of filing for bankruptcy, apparently has around 3 months to find additional funding. So we should know the final ending by May, including whether or not Saab will continue, expand or curtail sales in the USA. FYI, as of this writing the Saab.com and Saab.usa com sites appear alive and kicking. Saab Global is showcasing the Saab 9-3X, the car the Mailbu Maxx might have become, but never did.
There are very few 'affordable' European brands in North America that have a truly wonderful European design. Volvo had it. Saab had it. VW kinda had it. That's been about it for the North American market. The trouble right now is that virtually no one can make a profit. The overproduction and overcapacity in the global automotive market has become so horrendous that only a series of liquidations will ever cure it. In fact, I would go so far as to say that most automotive companies have become de facto welfare recipients from their respective governments. Whether it's by bailout (we know those folks) or outright protectionism (China and South Korea), the end result is the same. The easy way to cure this would be to liquidate Chrysler, let GM and Ford restructure through bankruptcy, and kick out Hyundai since their influence in the South Korean government has effectively cut off access to American competitors. I personally wouldn't be surprised if the Genesis is being sold at a loss, even at MSRP, in order to gain marketshare. Unfortunately, the worst Hyundai in this market is still a far more competitive model than the best Saab. So for right now, the worstest shall die quickest.
Many of you here at TTAC have probably (not) missed my insightful comments regarding this issue. It's a sad day to see this brand go away. GM played a big part in seeing this go bad. I would pinpoint that overall the mistake (disregarding WHO'S at fault) lies in branding. Noone ever decided "this is what Saab is" and built those cars. In US and Germany they was bought by nonconformists. In UK because they were scandinavian (cool). In Sweden they were bought because they were perfectly matched in size, power and price for what the enormous* middle class wanted. And Sweden still held a large part of Saabs sales, and it's HQ. So how do you build a car for all those different persons? On a very tight budget from GM giving you over 12 years for a model cycle (in 2009!) How do you build a brand for those very different persons? It would have taken a very strong combination of owner and leader** to point out a clear future. There wasn't one. The Wallenbergs could have been the one, but they had so many other companies to run - and perhaps lacking the total will and commitment - so they choosed not to. There often are very few ways to do a thing right - and many to do it wrong. sad sad sad ............ * Sweden has a rather small upper and lower class, the middle class is HUGE. ** Why do you think Germany and Japan is so good at automobiles? And I mean this with deepest respect to those coutries and their people (and those who died when they joined hands and did bad things 70 years ago).