By on January 29, 2010

So you thought the Saab deal is done? A deal is never done until the check clears. Speaking of clearing, Laurence Stassen, a member of the European Parliament, and a member of the Dutch Partij voor de Vrijheid (a right-of-the-center party in the Netherlands) is seeking clarification from Competition Commissioner Neelie Kroes.

Vrouw Stassen wants to know if there is any forbidden state aid involved in the Saab/Spyker deal, the Dutch news site NU.NL reports. The Swedish government guarantees a loan of €400m, which Spyker then is supposed to get from the European Investment Bank. Spyker is, well, banking on that money.

The matter is especially iffy as €320m of the money comes from a special European fund set up to support the development of environmentally friendlier cars – and funds need to be used for that purpose, writes the Dutch Financieele Dagblad. Keeping the lights on in Trollhättan while GM delivers parts doesn’t quite fit the purpose.

Neelie Kroes is supposed to answer another inconvenient question from Ms. Stassen: ”Who will ultimately pay the bill if the takeover fails?”

Stassen’s European Parliament colleague Corien Wortmann , a Christian Democrat, also wants an investigation into the matter, says De Telegraaf.

Wortmann figures such an investigation could take several months. During which nothing will happen, except for lost time and money.

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16 Comments on “Saab: EU Can Spike The Spyker Deal...”


  • avatar

    The European Parliament consists of a bunch of tools with basically no say in anything but appointing the European Commission. Sweden has already approved the state guarantee, it is now up to the EIB board to approve the loan.

    As for how Saab use it, obviously it would need to be according to the rules set forth by the EIB, e.g. developing environmentally friendly technologies. Which is what they’d want to do regardless.

    And anyways, the €400 mil alone would be nowhere near enough to keep Saab up and running for more than a few months. But it will significantly help with the NG 9-3 development, the development of which is critical for Saab’s long term prospects.

  • avatar

    @Kroum: This bunch will soon be entitled to create their own laws. Wait for the competition in silly laws/directives between EU Commission and EU Parliament.

  • avatar

    Kroum: The The EU Parliament may be a bunch of tools (or a place where you dump unwanted politicians in an environmentally responsible way.) However, an EU Commissioner (or Commissar …) wields enormous power. If Neelie’s thumb goes down, there will be no EIB loan. Remember what happened with Opel. Kroes wanted clarification letters from the German government, and all hell broke loose.

    Also, in European politics, the EU Commissions are often intentionally used as the bad guy. Politicians play to their constituents, promise aid to save jobs, knowing that the EU will shoot it down. When it gets shot down, they throw up their hands and say “we tried our best.”

    • 0 avatar

      Bertel, I agree. Does not change the fact that MEPs can request anything they want, yet ultimately the decision lies with the EIB board and the EC. MEPs can make noise all they want and that’s part of their job description, too, I guess.

      A loan guarantee is not a subsidy, however – EIB loans generally come with state guarantees. The EU has approved that money be loaned to automakers for the development of greener technology, so as long as Saab uses the money for such I don’t see a problem.

      Ultimately, this €400 m. is secured with Saab Automobile’s assets, which are around the €1 b. mark. Just the old tooling brought in over $200 mil. This doesn’t really involve “taxpayer money” – it’s a loan that carries interest etc. Besides, it generally seems like a better choice than paying benefits and retraining for 10,000 newly unemployed.

      Let Saab have a shot at their own survival as an independent company – sink or swim. Can’t quite comprehend where this intense desire to see them go under comes from. Personally, I am happy having as wide a choice of automobile brands as I have of peanut butter brands in my local supermarket. And even though I don’t buy Kraft, I don’t care if others do, and like it.

    • 0 avatar

      I wouldn’t really define independence as still being joined at-the-hip with GM and continuing to resell their vehicles for another 7 years or more.

      Also I can’t imagine loaining a huge sum of money on an unpopular, dying business that hasn’t turned a profit in nearly a decade.

      What is Sypker’s real exposure in all of this? If Saab brings Spyker down is GM on the hook for anything? If GM decides to not liscense their vehicles and parts for Saab anymore what happens then?

    • 0 avatar

      “Continuing to resell GM vehicles” is quite the deliberate misinterpretation. :) But we already know you don’t differentiate between a platform and a badge.

      And the business doesn’t seem that “unpopular” considering you are active in every Saab article here, on Jalopnik and Autoblog. When things are unpopular people don’t care about them.

      With regards to profit, if Saab sales outside of Europe were booked to Saab Automobile AB instead of General Motors’ books, it could have been a different picture.

      GM does not “license” vehicles to Saab – the tooling for the NG 9-5 is owned by Saab and there is a provision that GM will produce the 9-4X for Saab, for a price, just like Magna produced the 9-3 vert for them for 7 years and still does produce the Boxster for Porsche.

      Meanwhile, Saab will be free to choose which manufacturers and suppliers it cooperates with on various parts of it’s vehicles. It may choose to develop an engine together with BMW or a platform with PSA Group. Or it may choose to buy its locking systems from Continental AG instead of having to use GM’s crap by default.

      There is a lot more to a car than the platform or the badge on it.

    • 0 avatar
      Nutella

      —Also I can’t imagine loaining a huge sum of money on an unpopular, dying business that hasn’t turned a profit in nearly a decade—
      There is a well known country where the government loaned a huge sum of money to an unpopular, dying business that eventually died. They even managed to keep most of the management intact.
      Ever heard of GM ?

    • 0 avatar

      I’m active in the discussion of the brand because it’s simply a hot automotive topic, not out of any real affection for it. Most of the chat based on Saab is just cheering for the underdog. Just like the did for Saturn. Just like they did for Pontiac. Just like they do for Buick and Mercury. Things that were “popular” online don’t turn out to be so when it comes down to peoples money. Like the last Saturn lineup, the Pontiac G8, and Saab. Which makes all the so-called emotion over it fairly silly. But all the brands I mentioned handily outsell Saab in the US so you could say they are at least more popular.

      If Saab was truly “popular” all the “fans” talking about it’s fate online would be owning late model Saabs in their driveways and the company would be selling enough vehicles to support itself, turn a profit and remain a contributing and integral part of GM instead of being given away. It’s no different with Ford and Volvo either which is why they are offloading it to the Chinese.

      The difference between Saab and GM as a whole is very stark. GM is a gigantic (still) multinational company whose issue isn’t exactly low sales, it’s cost structure, one that was horribly managed and never whittled down to stay profitable with it’s sales base as it gradually shrank. GM still sells an immense amount of cars in the US and abroad. Saab on the other has both cost and sales as a problem. That and their curious and very tarnished brand. Also their business plan has consistently failed for many years.

      There’s a difference between managing a company straight into the ground regardless of sales and a small company whose products simply don’t sell in a number to sustain itself. I wouldn’t put my money in either of them (and railed against the perverted bankruptcy of GM online) but if I had a gun to my head it would go to GM as a realistic long-term investment.

      Also the new 9-5 is a GM car regardless of however you’d like to spin it. The same type of GM car Saab fans have railed against for the past ten years.

      It’s based on a bread-and-butter GM car, it’s full of corporate GM parts and has a corporate GM powertrain. It doesn’t matter what styling flavor it has on the outside or the name on the nose, it’s still a GM car. Like Robert I don’t see anything revolutionary about it that will staunch Saab’s sales slide. As mainstream as it is the brand remains a curiosity in the US and doesn’t fare much better in the outside world. Since GM will be a stakeholder in Spyker Saab I also don’t imagine that they will be selling anything but GM sourced cars and cars with substantial GM component content for a long time.

      So again, what exactly happens to Spyker and GM if things continue to go bad for Saab?

    • 0 avatar
      Nutella

      I’m active in the discussion of the brand because it’s simply a hot automotive topic, not out of any real affection for it. Most of the chat based on Saab is just cheering for the underdog. Just like the did for Saturn. Just like they did for Pontiac. Just like they do for Buick and Mercury. Things that were “popular” online don’t turn out to be so when it comes down to peoples money. Like the last Saturn lineup, the Pontiac G8, and Saab. Which makes all the so-called emotion over it fairly silly. But all the brands I mentioned handily outsell Saab in the US so you could say they are at least more popular.
      If Saab was truly “popular” all the “fans” talking about it’s fate online would be owning late model Saabs in their driveways and the company would be selling enough vehicles to support itself, turn a profit and remain a contributing and integral part of GM instead of being given away. It’s no different with Ford and Volvo either which is why they are offloading it to the Chinese————-

      The issue here is that there is huge difference between the value of the brand and the number of sale of that brand. Brands are about emotions and it is exactly what sells cars that are not seen as commodities like most GM or Toyota products.
      Audi, BMW, Saab is about emotions. They are not rational purchases.
      GM failed miserably in understanding the Saab brand, and consequently failed to deliver vehicles that match what potential Saab owners expected.
      The 9-5 went on for 12 years unchanged; the 9-3 was an Opel looking Saab doomed from the start by too much GM cost cutting and other GM compromises .Let’s not even mention the brand dilution caused by the 9-2 or the 9-7
      Most of these unsatisfied Saab potential buyers went to other brands like Audi or BMW, something Edmunds recently highlighted again.
      —————————————————–

      The difference between Saab and GM as a whole is very stark. GM is a gigantic (still) multinational company whose issue isn’t exactly low sales, it’s cost structure, one that was horribly managed and never whittled down to stay profitable with it’s sales base as it gradually shrank. GM still sells an immense amount of cars in the US and abroad. Saab on the other has both cost and sales as a problem. That and their curious and very tarnished brand. Also their business plan has consistently failed for many years.
      —————————————————————

      Saab will always be a niche player, and it’s OK. As for Saab business plan, it was GM business plan, that is let the 9-5 go on for 13 years unchanged in a very competitive premium segment, cancel the 9-5 replacement 5 years ago but charge Saab for the developpement costs and give the platform away to Fiat, delay the launch of the otherwise ready 9-3 wagon by several years, delay the introduction of 4wd, abort the 9-6SUV but charge Saab for it, attempt to convince premium buyers that the 9-2x or 9-7x were premium Saab products, inability to come up with competitive diesel engines in Europe, let Opel get the newest technology instead of Saab, do I need to go on ?
      ————————————————————

      There’s a difference between managing a company straight into the ground regardless of sales and a small company whose products simply don’t sell in a number to sustain itself. I wouldn’t put my money in either of them (and railed against the perverted bankruptcy of GM online) but if I had a gun to my head it would go to GM as a realistic long-term investment.
      ———————————————–
      The jury is out on that one, as VM said ;-)
      ————————————————–

      Also the new 9-5 is a GM car regardless of however you’d like to spin it. The same type of GM car Saab fans have railed against for the past ten years.
      It’s based on a bread-and-butter GM car, it’s full of corporate GM parts and has a corporate GM powertrain. It doesn’t matter what styling flavor it has on the outside or the name on the nose, it’s still a GM car. Like Robert I don’t see anything revolutionary about it that will staunch Saab’s sales slide. As mainstream as it is the brand remains a curiosity in the US and doesn’t fare much better in the outside world. Since GM will be a stakeholder in Spyker Saab I also don’t imagine that they will be selling anything but GM sourced cars and cars with substantial GM component content for a long time.
      ———————————————————

      I don’t think anyone here pretends the new 9-5 isn’t a GM car, Saab has been part of GM for over 10 years and everyone know that GM has great engineers (including the Saab ones). GM simply doesn’t get marketing and tend to manage by blind cost cutting alone.
      Perception is key nowadays, cars are technically very similar and it doesn’t matter whether the new Saabs have GM platforms or not. What matters is that Saabs look and feel like Saabs and have the attributes one expect in a Saab. Platform sharing is the future of the automotive industry and many European companies are very successful at it. The Mini uses Peugeot engines, Toyota share platforms and engines with Peugeot and Citroen, GM uses Fiat and Isuzu diesel. Nothing wrong with that. And getting a platform or an engine or any other components from any other car manufacturer is not indicative of the (in)ability of designing one: Lotus is one of the best engineering firm yet they buy engines from Toyota because it’s cheaper than than done in house. Again, as long it doesn’t detract from the attributes expected in a Lotus (agile handling and exclusivity), it’s a good move

    • 0 avatar

      Well put, Nutella.

      There is no denying this a risky move for Victor Muller and his investors. If executed properly, it has the potential to be handsomely rewarding. If not – it surely will ruin him and his company.

      Some people adapt to the world, others try to adapt the world to themselves. Progress depends on the latter. Less than ten years ago Michael Dell was ridiculing Apple and suggesting it should declare bankruptcy to relieve its investors. Now Apple nets in four times the income of Dell, thanks to innovative engineering and brilliant marketing (the parts bin of a Mac or an iPhone is the same like the parts bin of a Dell or a Samsung).

  • avatar
    Nutella

    From the EIB website
    Description
    The project concerns the part-financing of Saab Automobile’s expenditures for selected R&D projects in the 2009-2012 period.
    Objectives
    The project concerns RDI activities related to the improvement of fuel efficiency and safety of the Saab Automobile’s future car fleet. The project includes also the capital expenditures associated with the new tooling and upgrading of existing facilities for the production of the above developments. The project, which will be implemented over the period 2009-2012, will be carried out in the promoter’s existing facilities in Trollhättan, Sweden, and at engineering facilities of automotive suppliers and specialised engineering companies

    Status
    Approved

    • 0 avatar

      Neelie can still shoot it down.

    • 0 avatar
      Nutella

      Yes, if VM has another undisclosed business plan that is different in substance. A bit far fetched IMO

    • 0 avatar

      Unlikely to be shot down. There is nothing wrong with it – technically or otherwise, and there is little risk to the EIB itself. From what we know, the business plan Spyker used is the same one that Koenigsegg and Saab management developed earlier last year.

      At the end of the day, such loans are the exact reason why the EIB was created and still exists. It’s a political institution, not a commercial bank.

      Now, the French auto subsidies – that’s a lot more interesting of a story.

  • avatar
    bill h.

    Kroum

    +1+

  • avatar
    Jethy

    Laurence Stassn a member of a right of the middle parliamentary party in Holland? The PVV, Party Voor de Vrijheid right from the MIDDLE?? Let me help you a little bit and shed a little light on this right of the middle party you are talking about. It is so right wing as it goes, the party leader is officially accused of spreading hate against Muslims and they are denying climate change. They are known in Holland for questioning everything, so why not questioning the EU support for the development of environmentally friendly techniques in Sweden? just something to think about. Sweden has taken the environment always very serious. Think for instance about what they achieved in reducing CO2 emissions. That is unprecedented, even within Europe. Saab is not developing these new techniques by themselves, that is done by specialized companies that re offering their services to SAAB. The development money is used to finance that kind of developments and how the money is spend is checked by the accountants of the EU Development bank on a monthly basis. SAAB cannot do anything else with that kind of money and by the way, this funds was released in October last year, way before Spyker was in the picture. It is all a storm in a water glass, blown up by a racist party who does not know anything better to do than trying to benefit from this politically. Jeck, I get a very bad taste in my mouth if I read this kind of stories, sorry.


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