By on January 10, 2010

On the fast boat to China. Picture courtesy autoworld.files.wordpress.com

Bloomberg read it in Sweden’s Dagens Industri that General Motors will send the tools for Saab’s new 9-5 model to China. Mind you, these are not the old 9-5 tools sold to BAIC. These are the tools for the new Epsilon 2 based 9-5, or what Dagens Industri calls “the crown jewels of Saab.”

Stating the obvious, Dagens Industri states: “Without the 9-5, Saab’s attractiveness for new bidders fades quickly.”

According to Dagens Industri, some of the tools for the new 9-5 are in Opel’s plant in Rüsselsheim, Germany. From here, they will be shipped to the GM/SAIC joint venture in Shanghai, where they could be used to make the Buick La-Crosse, which has the same long-wheel based Epsilon 2 platform as the Saab 9-5. “First delivery from Rüsselheim will leave on Friday, January 15,” says a source for Dagens Industri.

More 9-5 tools have already been moved from Rüsselsheim to Trollhättan, in preparation for the spring series production of the 9-5. A Dagens Industri source said. “The next likely step is to dismantle the tools in Trollhättan and also move them to China.”

There is a similar story in Autocar that says that “GM has secretly booked transportation to shift the remaining 9-5 production equipment and tooling from Opel’s Russelsheim factory to GM’s Buick factory in China.” Autocar’s sources supposedly are “at GM Europe in Germany.” But it sounds as if they are at Dagens Industri. Even the ship date is the same: “The shipping will begin next Friday, 15 January, according to Autocar’s sources.”

Of course, the trucking-off of the Swedish crown jewels to China came as a big shock to the guys over at Saabsunited. They are still busy organizing Saab support convoys for January 17th. If the story above is true, the convoys will support a stripped shop. Saabsunited intimates that the story has been leaked by GM operatives, in order to hasten the final expiration of Saab. Saabsunited’s sources in Rüsselsheim say that “if GM decides to close Saab rather than sell it, then that tooling will be shipped immediately to China.”

All hopes of the Saab Defense League now cling to that little “if” and that “bookings can be canceled.” Folks, the teardown of a production line, even if it’s just for a “Null-Serie” (or preproduction series) takes a while and wants to be well planned. If the containers will leave in 5 days, then they are already packed by now, and tickets for the reassembly crew have been booked also. If the tools are crated up for overseas shipping, then someone has decided quite some while ago: “God natt, Saab!”

And what would Saab be worth without the new 9-5?

Stryker’s CEO Victor Muller wrote in an email to Saabsunited. “The NG 9-5 is of course in the business plan, and without it, the plan would not work.”

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28 Comments on “Saab’s Crown Jewels To Be Carted Off To China...”


  • avatar
    Pig_Iron

    Good bye SAAB, I will miss you.

  • avatar
    lw

    Let’s review..
    - The US government can continue to operate because the Chinese choose not to dump it’s debt
     
    - GM was gone.. failed..  done..  The US government (using money lent from the Chinese) did a cash infusion to keep it alive.
     
    - Since then, one piece of GM after another has been sold/shipped to China at very reasonable prices.
     
    - The single big thing the US domestic market get’s from the deal is an electric car that isn’t viable without more government subsidies/debt (see 1st bullet for who controls the debt)
     
    Sure seems like the Chinese bought themselves an orderly liquidation of GM with them as the sole bidder.

    • 0 avatar
      mpresley

      - The US government can continue to operate because the Chinese choose not to dump it’s debt…
       
      The government will continue as long as citizens do not revolt.  If the Chinese stop buying treasuries, then the Fed will suck it all up.  Either way, the dollar is doomed.
       
      The single big thing the US domestic market get’s from the deal is an electric car that isn’t viable without more government subsidies/debt (see 1st bullet for who controls the debt)

      The fact that this requires any subsidy at all mean that it is not viable in any sense, but I understand what you mean.  GM as an organization should have been put out of its misery a year ago.  This grotesque situation started under Bush.  Obama just turned it up a notch.
       

  • avatar
    Nutella

    Scorched earth policy by GM. Paid for by the US taxpayers.

  • avatar
    Robert.Walter

    Interesting development and in line with what must be done. 

    Some will claim this as evidence of GM’s negotiating in bad faith, although I don’t see it as rising to this level.  Once GM decided to separate from SAAB, the packing up and moving of production tooling out of Opel would most likely have to happen – unless there had been a scheme to be a transitional contract manufacturer of major sub-systems up to and including final assy, for the new owner of SAAB (similar to what had been proposed under the Penske-Saturn arrangement).

    So the whole pack it up for shipping part of the activity could proceed apace while the ship-to location could essentially be made at the last minute.  The buying of tickets and booking of hotel rooms could be made on a contingent basis, or be changed to a different location at relatively little cost at essentially the last moment.

    Just what is the Russelsheim tooling composed of?  Given that a) suppliers provide better than 60% of the cost of a vehicle’s BOM, and b) OEM facilities are basically body-stampers/welders/painters; powertrain casting/finish machining/assy; and final assemblers.  What of it goes to China?  The stamping tools?  The engine and transmissions mach and assy lines?  Fixtures and conveyors (or some portion of them)? With all due respect to the folks inpacted by this in Germany and Sweden, their part of the story is like the center ring of the a 3-ring circus, and all attention has been focussed there, yet another interesting part of the show, in the outer rings, has either not begun yet, or has been proceeding somewhat out of the limelight.

    Surprisingly, there has been nary a peep (or leak) from the supplier community about what is to be done with all the tooling for the NG95 sitting in the supplier plants.  Under standard OEM T&C, GM as the owner of these tools (assuming PSW has been reached and GM made a lump-sum tooling payment) would be within its rights (believe it or not, GM’s T&C has language “GM has the right to end the business with the Supplier for any reason or for no reason at all…”) to pull their tools out of supplier facilities and move them to another supplier in better proximity to S-GM (as well as the right, if they found a buyer of SAAB, to Assign the supplier’s supply contract to the new buyer) although, in a first-step, after the dust settles, and assuming GM continues to produce this car somewhere, GM would have to go through a new round of negotiations with the supply base visavis supplier location and GM delivery location, and decide if it is cheaper to ship the parts from the current supplier locations, or to move the tools closer to the new GM production location.

    The SAAB saga is far from over, it will just change in form, and I won’t be surprised, as it enters its next phase, to hear of stories creeping out of the supply base regarding the above, as well as news of launch delays or quality problems due to resourcing, relocation, requalification, etc.

    BTW, does anybody have interest, or find value, in these comments? They take time to write, but I don’t see too much in the way of counter response, so sometimes, I wonder if it is worth the effort.

    • 0 avatar
      lw

      Wonder how many of those suppliers were Chinese.  Maybe this move reduces the shipping costs to produce the cars.

    • 0 avatar
      Rob Kleinbaum

      Robert, this is a very useful post, to say the least! Thanks!
      It seems clear the Saab story is not completely over yet. There is also a larger story of the role of China and GM’s jv with SAIC, both in China and globally, that is emerging; this is the more important story.

    • 0 avatar
      John Horner

      Please keep at it. There are hundreds of readers for every one person who chooses to add a comment.

    • 0 avatar
      Rod Panhard

      Great post. Please keep at it.

    • 0 avatar
      levi

      For me, as an outsider looking in, I am simply trying to get my mind around the dynamics of the global auto manufacturing business.  When I read a fascinating article like yours, I feel like a deer caught in the headlights of a GM/SAIC/BAIC/Stryker/Saab careening towards me.

      Keep up the great articles/posts.

    • 0 avatar
      babucat

      Will a major automotive manufacturer (VW/BMW/MB/Toyota) pick up the rights to the name and grill much like BMW did with RR?
      Toyota for instance has tried to launch a youthful brand with Scion which wasn’t nearly as successful as they had hoped. It seems like the could buy the rights to the Saab brand for pennies on the dollar and build Saab into a trendy upscale brand between Toyota and Lexus that is more focused on sport than luxury…. Other than Toyota’s share in Subaru their lineup is pretty damned boring.

      GM could have built a proper 900 on the WRX platform if they had invested enough to make it look, and feel like a Saab (IE a hatchback, less turbo lag, more luxurious features than were offered on the 92x which was a pretty pathetic piece of badge engineering.
      If you had Toyota reliability with performance and handling characteristics that could put it in the same ballpark as BMW/Audi with a neat/quirky image they might just have something.
      I mean how much did the spend on Scion? The average age of a Toyota/Lexus customer is 50 or 55 plus isn’t it?
      Maybe its a naive idea on my part but I felt like sharing it.

    • 0 avatar

      Robert, that’s an excellent assessment of the situation.  While I can’t say that I’ve read every comment (since we started a comment section a couple years ago) on this site, I know that our readership enjoys commentary such as this.

  • avatar
    Bill Wade

    Robert.Walter
    January 10th, 2010 at 9:45 am

    BTW, does anybody have interest, or find value, in these comments? They take time to write, but I don’t see too much in the way of counter response, so sometimes, I wonder if it is worth the effort.
    ———————————————————————————————————
     
    Robert, I think many do. Sometimes it’s not necessary to respond to what one may find the truth.

  • avatar

    Robert: Highly appreciated, and reflecting a deep understanding of the industry.  When comments are so well written and comprehensive as yours, then there often is very little else to say. Please keep them coming!

  • avatar
    mtypex

    Sorry, I have posting less since I started at GM, but chiming in to support your thoughtful commentary.  GM’s JVs in China will be the death of the company.

  • avatar
    no_slushbox

    “Saab’s Crown Jewels To Be Carted Off To China”  That’s a bit more attention grabbing, but less straightforward, than: GM to utilize the Epsilon 2 tooling shared between the Saab 9-5 and the Buick LaCrosse to build Buicks in GM’s existing joint-venture in China.

    It is a bit of a wakeup call to anyone that thought that Saab was going to be anything but liquidated.  But if the tooling was located at an Opel factory then Saab was never going to make the 9-5 anyway, it was going to be contract manufactured for Saab by Opel.

    • 0 avatar
      DaveDFW

      SAAB has already begun assembling the NG9-5 in Trollhatten, in very small numbers.
       
      There is more than one set of tooling–the tooling referred to in this article is a set that had not yet been delivered to Sweden.

  • avatar
    NickR

    That’s a great looking sedan.  SAAB might have regained some momentum if they’d offered it at a reasonable price.  I can’t imagine people are going to be too enthused about buying one made in China.  I would freakin’ touch it.

  • avatar
    carguy

    The sad part of all of this is that an Epsilon 2 derived vehicle represented the Saab “family jewels”. While the Epsilon 2 platform is a competent starting point for building a mid range FWD family vehicle, it is not really a contender when you’re trying to compete with the 5 series or the E class. Just like the old 9-5 was based on a mid 90s Opel Vectra platform, this new 9-5 was really more of the same neglect that GM has been dishing out to Saab ever since they took over. Maybe the headline “BAIC buys itself access to Epsilon 2 platform” would be more accurate since Saab hasn’t had a any family jewels for quite a while.

  • avatar
    snabster

    At the right price, an Eplison-2 car could probably compete with a 5 series or E class. It might not be as good a car, but shaving 20K off the price would bring out buyers.
    And BAIC did not get the Eplison-2.   If this story is true, it is being put into Shangahi-GM.  BAIC got the older 9-5, which, as I’ve said before, will be a very hard sell to Chinese consumers.

    • 0 avatar
      bill h.

      Well now there are news reports coming out of Sweden denying the news.
      http://svt.se/2.22620/1.1841089/gm_inga_verktyg_till_kina_nu
      [Pardon the translation]
      GM: No new Saab tools to China

      General Motors denies that production of the new Saab 9-5 model should be sent to
      China for the production of Buick cars.

      “I have spoken to those responsible for Saab project and information is not true, “said Stefan Weinmann, spokesman for GM Europe, on Sunday to TT’s correspondent in Detroit.

      Weinmann claims that GM still evaluating the various bids at Saab Automobile and
      that the door is not closed for a sales. “I can not give any timetable for when we can talk about results, “said GM Europe spokesman.

      [so who knows....]
       

    • 0 avatar

      “The information is inaccurate. I have spoken to the people responsible for the Saab project and the information is not true. There must be some misunderstanding. Perhaps you confused this with the tools of the old 9-5 that have been sold to BAIC,” said Stefan Weinmann, a spokesman for GM Europe, who is now in Detroit for the International Motor Show. He says that GM is still evaluating the various bids that have come in and that the door is not closed on the sale of the company. “We are not finished with the analysis of the bids and I can not give any timetable for when we can talk about results.”
      What else should he say?
       

      Comment of the folks at saabsunited.com:

      “Well, Mr Weinmann, I can assure you that the information from my sources – yes, that’s plural – was pretty specific.

      Your diversion in talking about the old 9-5 technology going to BAIC was a neat trick, but if you read the story properly you’d realise that we’re not talking about tooling moving from Sweden (yet).

      The original story was about the remaining 9-5 tooling that’s sitting in Russelsheim, Germany. It’s this tooling and equipment that’s apparently earmarked for movement to China on the 15th, in the event that Saab are closed instead of sold. Though don’t be surprised now if that date’s been moved back to corroborate Mr Weinmann’s story.”

      Bloomberg is running an even meeker denial: “We believe this is a misunderstanding,” said GM Europe spokesman Stefan Weinmann. “We are not aware of any such plans.”

      Always be careful when a flak says he’s unaware. He can then claim he wasn’t told.

    • 0 avatar
      Robert.Walter

      I’m w/Bertel here.  I dimly recall the lack of alignment between GMHQ and GME regarding the Opel sale (or was it the SAAB saga?) was demonstrated elsewhere here on TTAC when the quotes between the HQ types and the GME spokesperson failed to align.  (It was either this, or this was a blundered attempt to retrench … before the internet made the world one, both things, i.e. misalignment and retrenching, happened easily and were more difficult to scrutinize.

      Now as to the possible reason for PR misalignment:  It is a fundamental behaviour in the M&A world to try and manage information flow by limiting it to a small group of people directly involved in the process (“need to know.”)  It is likewise a basic behavior for those parties directly involved (“in the know,”) to deny the existance of any action or deal; indeed, behaviours (always), incentives (sometimes) and punishments (often) are codified in an NDA which the individual must sign before receiving close-held confidential information.  PR VP’s are in the need to know circle, PR spokespersons are not.  

      A spokesperson who is behind the curve, due to not being a need-to-knower, who doesn’t have the skill to “talk but say a whole lot of nothin’” or quickly adopt a stance of “I’m unaware of that”, risks not communicating the correct story, putting statements out there that allow insight into or misunderstanding of the story, or becoming the story himself, and ultimately getting canned for just complicating things.

      When deals are being done, “Loose Lips Sink Ships!”, and those in the know keep silent, and if approached they lie, by denying the very existance of the deal until the ink is dry on the contract!

  • avatar
    tedj101

    Robert,
    This is exactly the sort of information that makes TTAC valuable (and worth reading).  I can read “press release drivel” anywhere!
    TED


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