By on December 20, 2009

General Motors or the Chinese... depending on which you all like least (courtesy:pub.tv2.no)

Bård Eker has given an open-hearted interview to Norwegian newspaper Aftenposten, referred here at e24.no telling his version on the failed Saab-deal. Eker was one of the investors in the Koenigsegg Group’s bid for Saab, through his company, Eker Group – 49% owner of Koenigsegg Automotive. Here is his hindsight on the deal:

“General Motors made it very hard to buy Saab”, he says. “Saab wasn’t structured as a subordinate, it was completely swallowed into the massive GM body. And while you can remove a lung from a body, you can’t remove all the veins. And GM had not done the required separating job prior to starting negotiations with interested buyers. That was a contributing cause why things took longer time for us too”.

It also seemed Koenigsegg struggled to get GM to agree on a price for parts and components to Saab cars:

“Our mistake was to be open and frank about our business plan. In the beginning, no-one believed in it, but as time went and the plan made sense, the guys started to get greedy. GM wanted more money for their parts, and the Chinese wanted more for their money. That was the drop; greediness became so dominant we coudn’t take it any more.” Eker says to Aftenposten.

“My worries go to the 8,000 employees in western Sweden who faces unemployment. For their sake, I hope something good comes out of this,” he continues. The interview ends on a note of regret:

“The only winners here are the Chinese. I believe they got what they always wanted, and we were the regulators that prevented them from exploiting Saab, but they would have gotten their way anyway, without hurting Saab. Now it doesn’t matter anymore, for there is no Saab left to acquire.”

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21 Comments on “Bård Eker: Greed Killed The Saab Deal...”


  • avatar
    Via Nocturna

    Don’t take me for a GM apologist, but all the finger pointing at GM is more than a little disingenuous. Yes, GM deserves all the criticism they received for mishandling Saab during its time under their auspices, but Saab was on the ropes well before the General took command.

    • 0 avatar
      my car runs on methane

      if this was 1990 i’d say it was SAAB’s fault for screwing up, but after owning them for 20 years the blame should point to GM
       
       
      saab could have easily been made into a nice alternative to bmw or audi

    • 0 avatar
      redrum

      saab could have easily been made into a nice alternative to bmw or audi

      Replace “easily” with “for a few more billion dollars” and you might be right.  GM has already lost a bundle trying to turn Saab into a competitor.  If anything, they took too long to cut it loose.
       
      The “GM’s greed killed the deal” argument doesn’t hold any water.  If GM could sell Saab for a profit instead of just closing it up, they would.  The fact that they’re not pretty much says it all.
       
       
       

  • avatar
    oboylepr

    Sorry, GM deserves all the criticism it’s getting and more. You are 100% correct when you say that Saab was on the ropes but hope was high that GM might make something good out of it. Not only did that not happen but if anything GM destroyed the storied brand. This should come as no surprise to anyone as GM’s cluelessness has destroyed all their brands. I read somewhere that Cadillac was once considered equal to or better than Rolls-Royce in terms of the quality and exclusivity of their vehicles. What happened to that? It seems that everything that GM touches or even comes close to gets screwed up. An example of GM’s complete and utter cluelessness concerning what it had in Saab was when they rebadged a completely mediocre SUV as a Saab and then tried to sell it with a straight face. I am not a Saab fan per se but Saab had a reputation for being a bit quirky (in a good way) and a lot of people liked that. It would have taken a bit of skill to exploit and build on that quirkyness and make Saab a success. Skill that GM did not have, does not have and shows no sign of acquiring anytime soon. The demise of Oldsmobile, Saturn, Pontiac, Hummer and Saab is only the beginning, all the remaining brands will follow them down the toilet in time. Cluelessness still rules in RenCen.

    • 0 avatar
      Len_A

      I’m not an apologist for GM, but what you posted is a load of nonsense. Saab’s problems, as a stand-alone company both before GM bought them, and the potential spin-off, is a lack of volume needed to justify the R & D spending it takes to design, and bring to production, new cars. The problem with spinning off Saab is that they are now integrated into GM Europe, for better or worse, and is the same problem, just in a smaller package, as spinning off Opel. The platforms used by Saab are now world-wide General Motors platforms.
       
      In order for GM to have made something good out of Saab, first the high costs of being a niche player had to go, and integrating Saab into GM was the only way to do that. For all the carping about how GM rebadged a midsize SUV as a Saab for North American consumption, the critics fail to realize at the time that decision, luxury car sales had been declining in favor of tarted up SUV’s. GM made a decision to try and keep Saab customers. That decisions execution was seriously questionable, but with Audi, BMW, Mercedes, Lexus, and other makes building an SUV, GM need to at least make an attempt to retain the customer base.
       
      And it wasn’t “a bit of skill to exploit and build on that quirkiness and make Saab a success” – it was money. In mass production, which is what GM is having to deal with, “quirkiness” cost money. Bottom line, that quirkiness has to justify a price premium, and the lower the sales volume, the higher the price premium has to be.

  • avatar
    lw

    Greed eh?
    Assuming the cost to extract Saab from the mothership was more expensive than the pittance they would have been paid, GM finally made a business decision that was good for GM.  They made the decision about 10 years too late, but hey..

  • avatar
    no_slushbox

    Ah, to hear a guy whose company makes its money selling cars for up to over $1,000,000 crying about greed.

    The greed that killed Saab was Saab-Scania’s greed in selling the Saab auto making subsidiary to GM, instead of doing the in-house work to add AWD, improve quality and increase efficiency which would have been required to keep Saab competitive.

    The same greed caused Volvo to sell the Volvo auto making subsidiary to Ford.

    It really seems like the Swedish industrialists are some greedy, car company selling-out people.

  • avatar

    No, Via Nocturna is correct.  The only mistake GM made with Saab was to fully purchase it in the first place.   Saab has always made very mediocre cars at very expensive car prices and continued to do so, that was it’s brand identity.  There was little GM could do with it or about it.  No different than Ford, Volvo is unprofitable, even after Ford did everything they could to make the operation more efficient.  The state of the Swedish auto industry does not lie 100% on GM and Ford.  Both Saab and Volvo are the way they are because of how they’ve always been.  The world simply doesn’t have a market that can support an automaker like Saab.  Volvo might still have a chance.

    • 0 avatar
      PartsUnknown

      SAAB was at it’s zenith in the 80′s.  A low-volume, mostly regional brand, but one with a fiercely loyal following.  And, most importantly, contrary to your assertion, the cars were not at all mediocre.  You clearly don’t know the brand.  That said, the market started to change as Audi/BMW/MB continually trotted out new products, and the likes of Lexus, Acura and Subaru started to assert themselves.

      So, GM steps in and buys SAAB, which is on the ropes because of their too-long product cycles and a rapidly changing marketplace.  In my view, GM failed to build on the essential, marketable qualities of SAABs (remarkable space efficiency, fuel economy coupled with performance, durable, tank-like construction).   It’s not about quirkiness – screw that.  If you think a key between the seats is what made a SAAB a SAAB, you REALLY know nothing about the brand.  GM failed in its brand management by failing to build cars that carried on the SAAB brand qualities, qualities that, ironically, would have made SAABs vastly more popular outside of New England and allowed the brand to thrive.

      The 9-2X and 9-7X were horrendous band-aids that did nothing but turn off buyers and further sully the brand.  They were stopgaps, and bad ones.

      Yes SAAB were in bad straits when GM bought them, but GM made a bad situation worse by mismanaging the brand, allowing good products to die on the vine (see 9-5) and introducing hideous new ones (see 9-7X/9-2X above).  Targeting BMW/MB was a mistake – SAAB had enough unique qualities to exploit without venturing into that territory.

  • avatar
    Gardiner Westbound

    GM tried to run Saab the same way it ran Pontiac. We know how well that worked out!

  • avatar
    no_slushbox

    Ah, to hear a guy whose company makes its money selling cars for up to over $1,000,000 crying about greed.

    The greed that killed Saab was Saab-Scania’s greed in selling the Saab auto making subsidiary to GM, instead of doing the in-house work to add AWD, improve quality and increase efficiency which would have been required to keep Saab competitive.

    The same greed caused Volvo to sell the Volvo auto making subsidiary to Ford.

    It really seems like the Swedish industrialists are some greedy, car company selling-out people.

  • avatar
    John Horner

    Interesting, Bård Eker puts all of the blame for the deal’s failure on everyone else involved. He and his group were the very models of open, honest and forthright businessmen acting out of concern for Saab’s employees. Everyone else at the table was a greedy SOB.
    Years ago I interviewed a marketing candidate for the company I was then working for. His most recent employer had just gone belly up, so I asked him what went wrong. Interestingly enough, all of the finger pointing he did was directed at other people and other groups. Not once did he mention anything which in hindsight he wished that he and his part of the company had done differently. When I turned in my interview evaluation sheet I recommended that we not hire him on the basis that apparently he had learned nothing from being part of a business train wreck. My no vote was overridden by people higher up the food chain and he was hired anyway. Less than a year later those same higher-ups pushed him out of the company.
    So, I have little interest in Bård Eker’s take on what went wrong because he takes no personal responsibility for his role in the failure. Then there is the fact that Eker’s partners include infamous sub-prime loan guy Mark Bishop and a host of Russian banking and business connections. Not a greedy guy in that bunch I’m sure!
     

  • avatar
    Autojunkie

    It’s sad in so many ways…

  • avatar
    oboylepr

    Well I am glad to see that I don’t corner the market on posting nonsense. Saab may NOW be fully integrated in the GM system but when GM was in the planning stage (if there was one) to buy Saab, they did not really know what they were buying. If they wanted another generic boring brand, why did they even buy Saab. The uniqueness that was Saab vanished the same minute GM inked the deal. Why? What’s the point to the whole exercise? GM were acting like The Borg in Star-Trek. Now it’s another millstone around their neck and it looks good on them. The truth is that GM were going hog wild growing by assimilation, trying to outdo their crosstown rival. Now they both had their own quirky Sweedish brand to brag about. They went nuts spending money they did not have instead of organically growing both their business and their market share. Every decision that GM made concerning Saab and I mean every decision from buying it right up to the present day including it’s sale was screwed up by GM. Also, spare me the nonsense about not being a GM apologist and then trying to justify rebadging an SUV that was a lousy vehicle as a Chev and pretend it was something more exotic. It take more than a ‘Push to Start’ button on the center consul to make a turd like the Trailblazer into a genuine ‘Euro’ SUV or whatever it was supposed to be. Likestick on a pig!  The folks in Audi and BMW must have laughed their heads off .

  • avatar

    the two words that best describe GM’s failure regarding the sale of Saturn, Saab, and likely Hummer are as follows… John and Smith. remember the same fella who lied about Cadillac beating Lincoln and then drove NA sales into the dirt while running VSSM. guess who was integral in the Opel mess?

  • avatar
    Adub

    GM would make more money (okay, some) if they sold Saab instead of winding it down. However, GM has a track record of screwing up most things it does, and this is no exception. As a forced shareholder in the abomination that is GM, I demand better!

  • avatar
    Jack12

    Tictacdo – This is for all the shareholders that have lost money due to GM’s destruction of Saab. This has mismanagement written all over it as in 2006 Saab was enjoying record sales. GM threw out the innovative and truly energy-saving Saab guts and replaced them with cheaper Opals (also going under, as I understand).  Anyone know what actually happened over there? Smells like politics to me.  Was the Swedish gov stepping on GM’s toes? What a waste – what a shame.
     

  • avatar
    innatech

    The sale of SAAB to GM was a terrible match from the get-go. They abandoned the 900, which (love it or hate it) was the cornerstone of their success in the late 80′s/early 90′s. The cars lost their distinctiveness and took on that generic GM feel–precisely opposite to the taste of the brand’s following. The vestigial SAAB design elements felt more like a mockery than anything else.

    Buyers don’t need to worry about extricating recently developed technology and tooling from GM.  Let it go. Just get the brand itself, and ownership of the original IP from before the buyout, as cheap as possible. Then leave the market for few years and return with a new version of the 900,  strongly resembling the old one. Park it in front of the Gripen’s nose gear, and hang the old seal behind it.  It will sell.

    • 0 avatar
      Len_A

      While some of what you say has some truth to it, namely that Saab’s marriage to GM was problematic from the get-go, the rest of this post illustrates why car enthusiasts, as well as some of the people I’ve seen posting on non auto websites, like WSJ.com, don’t have the first clue as to what they’re talking about.

      First of all, any potential buyer of Saab absolutely 100% has to worry about “extricating recently developed technology and tooling from GM“. It’s called “warranty parts” first of all, and second of all “legal liability” for any legal actions from current owners. GM’s not to accept 100% of the total liability, and any new potential owners isn’t going to contractually share that liability without some control over the tooling and technology to make those parts. Secondly, “Then leave the market for few years and return with a new version of the 900…” – are you kidding me? Oh, the dealers are going to love that. First decimate whatever value their franchises have, piss off the customers with remaining valid warranties, including confuse the hell out of them as to where they can go to get “factory service”, then try and come back into the market. “It will sell“? Not even if God came down from heaven and told people to buy it.

  • avatar
    Jack12

    I recently learned that Saab engineers jets for the Swedish Air Force- are they still doing that? Does anyone know?
     

    • 0 avatar
      Len_A

      Saab’s automobile division, Saab Automobile AB, was separated from the rest of Saab when GM bought the second half of Saab Automobile in the mid 1990′s. Saab Group still exists, completely separate from the auto production, and still is heavily involved in aerospace and military production. Here’s the Wikipedia link : http://en.wikipedia.org/wiki/Saab#Systems_and_products and the company web site: http://www.saabgroup.com/en/index.htm


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