By on November 26, 2009

Twilight in Asgard... er, Trollhattan

It’s the day after the Saab-bomb exploded in Sweden, and the media are pouring all over it. Of course, all kinds of “car experts” and “auto analysts” are having their say. Saab workers are expectedly sad and disappointed. And everybody’s blaming everybody and anybody. The unions blame the government, the government blames Koenigsegg, Koenigsegg Group are blaming time and bureaucracy, and the public is generally pretty pissed off with GM. And it all seemed to have come as julekvelden på kjerringa. But what on earth happened? Who pulled the plug? Who said enough is enough? And why now, all of a sudden? The EIB loan was allegedly just around the corner. Will anyone else buy Saab? What about the Swedish government? GM? Does anybody even care? Well, the 500 or so who bought a new Saab in October care – what about their warranties?

But seriously, Saab has a strong following, and there are 8000 jobs on the line, that’ll make a pretty heavy impact on the rather tiny Trollhâttan area if Saab goes bust.

One thing’s for sure – this deal was pretty shaky from day one. Koenigsegg Group was very secretive about their plans, they wouldn’t even tell who the group consisted of, and their finances never really looked secured. And that’s what really lies behind Koenigsegg Group’s official statement: the timeline. Uncertainty about the state Saab would be in when the deal was ready. Both Christian von Koenigsegg and partner Bård Eker keep repeating that time had run out. They had set an absolute limit for November 30 to close the deal. As they could not see any closure date, and the way – and rate – Saab kept bleeding, they probably, simply discovered they didn’t, or wouldn’t, have the finances to turn Saab around.
Unofficially – one speculation in Expressen.se, titled The Truth About the Break, says a source within GM told the newspaper the new 9-5, which shares platform with Opel’s new Insignia, has several expensive, technical problems. In Germany, Opel has had a lot of trouble with the model’s quality (if this has substance, that should be a warning to Buick!) Including those faults, Saab has developed their 9-5 in a hurry, cutting corners in the process. All this according to a GM insider. So Koenigsegg didn’t see any future savior in this model (which it has to be). They were afraid the warranty costs could be too substantial, and the model could be a giant fiasco to Saab instead a salvation.

Some though – more and more during the day – thinks this has all been a PR-stunt by Koenigsegg, perhaps combined with a plan from GM to get their hands on the EIB loan. CvK himself, faced with these allegations, claims that would be a bad and expensive marketing . But hey – now the whole world knows who they are, right?

According to Swedish Radio Ekot disagreements between KG and BAIC on whom to provide which finances into the deal was the reason things fell through.

The Government is being blamed too, for dragging their feet, and failing to provide support – be it loans, or cash for clunker programs – to the Swedish auto industry. And as for the question whether they are going to make Government Motors out of Saab, the answer is a clear no. The government isn’t intended to run a motor company. The Swedish prime minister has also raised the question – a legitimate one, he says – as to which assumptions Koenigsegg Group really had going into this deal. They have committed time, resources and peoples’ hopes that there would be a solution, he states.

So, what happened to the initial 27 interested buyers? Are any of them likely to step up and try cutting a great deal on Saab? Saabsunited likes to think Merbanco could still be interested. They were one of the few potential buyers left in the picture when KG was appointed “winners”, and SU’s favorite buyers.
And how about KG’s inhouse partners BAIC? Beijing Automotive Industry Holding Group joined the party fairly late, and seemed to be the ones who would provide most of the money (if they had agreed). They might be the ones to step into, and close the deal in solo? Not very likely. While being a car company with (Chinese scale) traditions, formed in 1958, they’ve never really manufactured their own cars. They’ve specialized in cooperating with foreign brands – Hyundai and Daimler for instance, and Saab would fit their plans. But to make an offer, and on their own run a business that is so heavily in loss, is something the Chinese company has no experience in, analyst Zhang Xin from Goutai Junan Securities told Reuters. Parts of Saab, yes, but not all.
And are GM willing to keep Saab alive long enough for another buyer to come forward? Or even consider keeping the ailing brand, together with Opel? Is there room for both within GM? There might be an answer to that Dec 1.

Maybe Bård Eker summed it up nicely in a tv-interview: “It was like a plane-crash, you know? When 58 things goes wrong simultaneously.”

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21 Comments on “Saab, Unsaved...”


  • avatar

    Had a new 88 SAAB 900T.  It was fast, (used to beat up on 3-series) and the unique selling point was that it was fast efficient and practical.  The back seat had that four inches that you normally have to pay the extra 10k for in the ‘Larger sedan’.    At that time, it was a better deal.  Later, bought a 9-3, which was this goodness but crushed into a smaller body, removing the USP of  comfortable back seat.  Still, comfy at speed and good mileage.  Both cars were hatchbacks, and would swallow much more than expected.  Sadly, the 99 9-3 had some “sporadic won’t start” issues and GM built bits of it with “model plastic” which broke after a few years.
    The last model 9-3 was a good deal stripped but horrible deal loaded.   I went to BMW and at 200k, it’s still going.  I would not think that of the last gen 9-3

  • avatar
    frizzlefry

    Don’t know about the whole company but someone has to buy their seats. Their seats are really, really nice. Sat in a 2008 SAAB 9-3 at an autoshow and I came back to it 4 times to sit in it again. Better seats than my 04 A6.

  • avatar
    mpresley

    According the official US Web site, you can finance a new 9-3 at a “special” 6.9% factory rate.  Not only is the product and company dead, but you have to pay a premium in order to own its rotting carcass.

  • avatar
    educatordan

    The island of misfit cars keeps getting more and more populated, although the first time I would mention Saab to one of the uninitated they would usually say; “The ignition is on the console because what, again?”

  • avatar
    sutski

    SAAB would perhaps have been ok if they had just once released a new (styled) car at anytime during the last 50 years…as it is they have just been sooo bloody  Booooooooorrrrrrrriiiiinnnnngggggg …..They have never made anything apart from a crappy 160hp 9-something or other!
     
    Incidentally, how does one get BAIC out of Beijing Automotive Industry Holding Group I wonder ?!

  • avatar
    Gardiner Westbound

    What killed SAAB is the same thing that killed Detroit. Lousy cars!
     
    Detroit’s efforts to please Wall Street, maximize executive bonuses, and buy off the union bosses looked after everybody that mattered, except customers. It pioneered and perfected the twins evils of value engineering, producing a product that prematurely becomes non-functional, and planned obsolescence generating billions in early parts and vehicle replacements until consumers realized they didn’t have to tolerate shoddy quality and routinely duking it out with the dealer and callous zone reps for warranty work.

  • avatar
    ott

    So let me get this straight. Pontiac and Saturn get thrown under the bus, but someone was actually expending an effort to save Saab? I’m confused.

  • avatar
    porschespeed

    They made some neat cars. More than can be said for many of the hundreds of car companies that have gone to the great Pick-N-Pull in the sky.

    Somebody do the right thing and just pull the damn plug already. There’s no miraculous awakening to come after this 20 year coma.

  • avatar
    dwford

    How many times do we have to watch the same movie? Saab is a dead brand like Pontiac and Saturn, with no real world wide following to rely on. GM watered it down and starved what was once a quirky regional brand, and now the brand is worthless – especially in such a down market. Better to let it die than waste money propping it up. GM should just keep it, run out the new 9-5 and 9-4x to recoup their investment, and let Saab die in a few years.

  • avatar
    Rday

    I once was foolish enough to buy a Saab 9000 used.  It was fun to drive but it had alot of problems. I sold in when I had to replace the heater core and it continued to smell of antifreeze. The wheels were of soft aluminum alloy and were constantly going out of round. I could care less if Saab dies. It was a painful nightmare and a costly experience.  I now buy only japanese vehicles.

  • avatar
    european

    dont understand why for example subaru aint buying SAAB. they could make it their nearluxury line. styling wise they arent far off, so that will work too. and yea, awd coz of the icy snowy sweden roads. could sell.

    but on the other note, i believe some other car mfgs could make their cars “quirky”. it doesnt have to have a SAAB badge on it.

  • avatar
    metamorphosis

    I haven’t heard anything about techical problems with the 9-5, rather that it beat the c*** out of the Insignia on test tracks (and after all, the Insignia was named car of the year in Europe).
    As for all people who wish SAAB’s immiediate death, you obviously don’t know the brand, or the future of it. SAAB hasn’t been treated very well by GM, and of course the 9-2x or the 9-7x are no “real” SAABs. The current 9-5 is way too old, but the 9-3 still looks fresh, at least in Aero versions. I’ve driven the new 9-5 and it’s absolutely magnificent, the handling, comfort and styling beats BMW’s and Audis in the same price range, and even though german brands may be more “luxurious”, I’d happily trade that for SAABs comfort and design.
    SAAB can’t be compared to Saturn, Oldsmobile, Pontiac etc., those brands have for long been rebadged Chevys or Opels, and even if GM forced SAAB to rebadge two models, the coming lineup with the new 9-5 and 9-4x is gonna be great.

  • avatar

    “But to make an offer, and on their own run a business that is so heavily in loss, is something the Chinese company has no experience in…”

    But then there would finally be a reason to make the movie Gung Ho II.

  • avatar
    Tosh

    “julekvelden på kjerringa”?

    That’s Norwegian. Couldn’t you at least dignify the sad news with a proper Swedish expression?

  • avatar
    mungooz

    The translation on this post leaves a bit to be desired.  Why was it initially written in a foreign tongue?

  • avatar
    Ingvar

    Koenigsegg tried to play the big league with other peoples money. And as the saying goes, he who has the gold makes the rules. Even with an EIB loan, the Powers at be didn’t see any money in this operation, Saab will not be profitable in a million years, or short of a cash infusion in the ten billion dollar league, whichever comes first.

  • avatar
    Ingvar

    And in Sweden, it all goes political… The Social Democrats takes this as an oppurtunity to stab the governing liberals in the back. On the other hand, they have always been for government owned industry. The problem is the lack of financial credibility in Saab. If the Wallenbergs and then GM couldn’t make a profit on Saab for forty odd years, why should a government controlled Saab make a profit, if the governments only requisite is to save the jobs?

    The problem in the media debate, is that those involved talking publicly on the subject and making political points, doesn’t actually know what the hell they are talking about. Commentators at TTAC have far more clues and insight in this question than the people making decisions.

    We may see if the liberals, with prime minister Fredrik Reinfeldt and Secretary of Industry Maud Olofsson can keep their heads strong. Elections are only less than a year away, and it seems like the liberals will lose to the social democrats anyway.

  • avatar
    Tosh

    Ingvar: You should explain that what you are calling ‘liberals’ in Sweden are actually the opposite….?

    • 0 avatar
      Paul W

      Ingvar, Tosh: The entire Swedish political spectrum is to the left of American democrats, which makes comparisons between the two countries a bit difficult. For example, the leader of the conservative party and current prime minister Fredrik Reinfeldt gave his support to Obama.
      When it comes to Saab, leader of the social democrats, Mona Sahlin, latest statement was that the government should do “something” about Saab and do it whole heartedly, but she didn’t specify what she had in mind. She also said that she has never been in favor of state ownership of Saab and wasn’t going to suggest it now either, which comes as a bit of a surprise, since she declared last year that it would be a good idea for the government to take over Saab until the financial crisis settles.

  • avatar
    Buckshot

    Yes, that´s about correct.
    Our prime minister is the leader of Moderaterna.
    You don´t get any further right here in Sweden.
    We don´t have any extremist rightwings here.

  • avatar
    psarhjinian

    The entire Swedish political spectrum is to the left of American democrats…
     
    The entire political spectrum of just about every democratic nation excepting, perhaps, Austria and the UK, are left of the American Democratic Party, and even in those cases they’re not that far off.  Sweden is hardly alone in this regard.
     
    That’s why people like me (who actually are socialists) find the whole Obama-is-a-socialist meme to be kind of surreal.


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