By on June 26, 2011

Victor Muller will no longer have a problem reaching a quorum or a unanimous decision at Saab board meetings. Muller is the sole remaining director. The rest of the board bailed.

The surprising deserter is Kristina Geers, who is also the corporate counsel. Her departure was confirmed to Göteborgs-Posten by Saab’s Communication Director Eric Geers, who happens to be Kristina’s husband. Officially, Kristina stepped down from the board on June 23, which happened to be the same day Saab announced that it cannot meet payroll.

The labor representatives on the board, Hokan Skött, Chairman of the metal workers union IF Metall, and Annette Hellgren, shop steward at Saab, had jumped ship earlier. According to TTELA, both tended their resignations “early last week.”  Skött told the Göteborgs-Posten that he had left “Tuesday or Wednesday.”

All three board members cited personal reasons for their sudden departure. There may be other factors that influenced their decisions.

It is possible that they left because they did not want to support the decision to stop payment of staff.  The union members certainly do not want to be caught doing this, and a corporate lawyer would be aware of the consequences. However, the three members could have outvoted Muller in a boardroom brawl.

Another explanation could be that the departed board members did not want to be drawn into bankruptcy proceedings. Wholesale walk-outs of board members before impending insolvency are not uncommon.

Maria Karlsson, Associate Professor of Civil Law at the Gothenburg School of Economics, harbors similar suspicions. She told Göteborgs-Posten: “Why díd they do that? Do they believe they can shed personal responsibility?”

To ward off bankruptcy, Saab needs money real fast. Today, the unions will most likely submit formal demands for payment (according to Dagens Industri, each worker has to file individual papers). Then, Saab has seven days to pay. If no money has arrived in a week, insolvency proceedings can be started. The union is under pressure to do this, because workers will only qualify for unemployment benefits when the company is in bankruptcy proceedings.

Saab’s big hope is on selling and leasing back the factory. Even that deal does not look like it will make money flow real quick. Swedish real estate magnate Hemfosa AB is “ready to buy and lease back Saab’s factory, but Saab’s complex financial situation makes a deal difficult,” Reuters says, citing Swedish media reports. Holding up a deal are “the European Investment Bank loan and a little money from Pangda and Youngman,” Hemfosa CEO Jens Engwall said. There are other considerations. Henfosa doesn’t want to buy a property and lease it to a tenant that cannot pay the rent. “Theoretically, you can value the property empty or with Saab in,” Engwall said. “But it would feel better if we bought it in the belief that Saab had a reasonable chance of survival, otherwise it would be a little meaningless.”

Should Saab be heading for collapse “we, perhaps, wouldn’t buy the property at the current juncture,” Engwall said.

So now we have Saab heading for collapse because of a serious cash flow problem, and the cash flow problem might not get solved, because the company is heading for collapse.

Update: Saab has the following press release:

“Swedish Automobile N.V. (Swedish Automobile, formerly Spyker Cars N.V.) announces that a Chinese company placed an order to purchase 582 Saab vehicles with a total value of EUR 13 million from Saab Automobile AB (Saab Automobile) and the full pre-payment is expected to be received this week, providing Saab Automobile with short-term funding to pay the wages to its employees and make partial supplier payments. “

The good news are immediately followed by a disclaimer:

“Swedish Automobile and Saab Automobile continue their discussions with several parties to secure additional short-term funding to restart production. There can, however, be no assurance that these discussions will be successful or that additional short-term funding will be obtained. Discussions on the sale and lease-back of the real estate of Saab Automobile are ongoing.”

The unnamed Chinese buyer is a bit odd. Don’t we all know that Pangda has an exclusive? Why the secrecy?

In the meantime, Swedish supplier ANA remains unimpressed by the good news from China and laid off 75 people connected with work for Saab, TTELA reports. The company had given notice to 18 workers just last week. ANA’s CEO Joachim Lind called it “a business decision based on the information we have on Saab.”

Expressen reports from a news conference where union chief Cecilia Fahlberg, accompanied by general counsel Martin Westfält said she is ready to put Saab in bankruptcy if wages will not get paid. Asked what would happen if the Chinese money shows up, she said: “There may be similar problems in July.”

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26 Comments on “Saab Story: The Board Bails...”


  • avatar
    highdesertcat

    While the demise of Saab is sad it is hardly surprising. We can lament the passing of yet another legendary name plate into the dust bin of history but most of us didn’t buy Saab nor did we want to buy Saab. Maybe if we had, Saab would not be where it is today.

    • 0 avatar
      stuki

      Even though none of their car’s as a whole have excited me for 20 years, Saabs still retained individual characteristics that I’ll be sad to see go.

      They were about the last brand to jump on the high beltline, massively raked windshield bandwagon.

      Prior to the ubiquity of awd, Saabs were also more focused on winter ,and less than perfect road, drivability than pretty much anyone. Front wheel drive, nice big snowpack resistant wheel arches and above average tire rolling circumference made them nice cars for blasting around Swedish (and other) snow covered logging trails.

      Once gas prices get high enough, the above traits will likely once again become relatively more important, as drag and weight from awd systems, and engines with enough torque to seriously disadvantage front drivers will count against them.

      It is also sad to see an entire automotive culture like the one around Trollhattan scatter or disappear. Instead of rallying around their innumerable miles of logging roads in hopped up old Saabs; coming generations of young Swedes, will instead be stuck at H&M, regurgitating the kind of hipster enviro drivel indoctrinated into them by a tax feeding public sector; who will inevitably pick up at least part of the slack from the disappearing auto jobs, as unemployed auto workers gets suckered into believing Saab failed due to some permutation of the evil capitalist story.

      • 0 avatar
        highdesertcat

        Saab made excellent cars but they were more of a niche than mainstream. While I was stationed in Europe with the US military several countries used the Saab sedans for their Highway Patrol vehicles in addition to the Porsches.

        I remember getting pulled over in Holland and another time in Belgium by a Saab sedan because the rear red fog light was mounted too low on my Olds Toronado, and that was a no-no. It had to be a certain height above the road deck. I had 30 days to correct it.

        Another thing no one seemed to like were the Bosch Halogen lightbulb conversion for the headlights I had to use on the Toronado. Seems that the light shone into oncoming traffic and one day it shone into a Polizei Porsche. Man, did that dude jumped the median and come after me. I had 30 days to correct that too.

        Those Green&White Saabs barreling down the German autobahns were nothing to fool with. If you saw one in your rearview you’d better get the hell out of Dodge, and into the right lane quickly. Ditto with the Porsches.

      • 0 avatar
        CJinSD

        I agree with most of what you said, but didn’t Saabs have relatively high beltlines when they were independent? I remember my time in 99s and 900s quite well, and the proportions of the doors made the window sills seem very high. Its true that the DKW Junior inspired wrap-around windshields weren’t particularly raked though.

      • 0 avatar
        Tommy Boy

        >>” … coming generations of young Swedes, will instead be stuck at H&M, regurgitating the kind of hipster enviro drivel indoctrinated into them by a tax feeding public sector; who will inevitably pick up at least part of the slack from the disappearing auto jobs, as unemployed auto workers gets suckered into believing Saab failed due to some permutation of the evil capitalist story.”

        +1

        BTW, have you looked at the indoctrinating drivel currently being peddled in U.S. K-12? Same stuff.

      • 0 avatar
        Domestic Hearse

        I rag on my 9-3 quite a bit for QC issues, but as stuki points out, it is an excellent driving winter car.

        Can’t disagree with that. On snow and ice, the 9-3 is the most stable, confidence-inspiring car I’ve ever driven.

        The Beancounters at GM certainly wreaked havoc with the electrical system and interior quality, but the Swedes, in spite of GM, put a lot of thought and effort into the way the car drives, especially on less than ideal roads and weather conditions.

        Thanks, stuki, for reminding me why I bought the car in the first place, and why it has some very redeeming qualities after all.

  • avatar
    John Horner

    Saab never really achieved the critical mass required to be a viable player. I will miss them, because I always was interested in Saabs and nearly bought one a few times, but I was put off by the relatively poor value (high price for what you got) and spotty reliability and durability record.

    But, as a business, Saab automobiles never really made the grade. The parent company was all too happy to hand the business over to GM, because Saab proper didn’t have the funds required to develop competitive vehicles. Even prior to the GM deal, Saab co-developed the 9000 with Fiat/Lancia/Alfa in order to spread the costs around.

  • avatar
    Zykotec

    I think GM watered it out too much, since it was always a niche car, having certain quirks would have been acceptable if it hadn’t all been Opel parts. A friend of mine is a Saab-fan, starting with a cheap used 1985 9000 turbo. A car with 185hp that did 30mpg. His 1998 9-5 with the exact same engine has 150hp and gets barely 20mpg (allthough it is an automatic) Both cars were not very sporty, but the older one at least had insane power for a mid 80’s car. It would pull like a freight train in every gear, especially at low revs. I will miss them even if I never bought one. (I came really close to buy a ’87 900 turbo intercooler once though, I loved that engine)

    • 0 avatar
      Athos Nobile

      I think GM’s legacy is not that bad. I have seen the NG900/93 and a Vectra of a similar vintage in the street, both 5dr hatchbacks, and both are VERY different in style. I’ve been trying to find similar parts like glass windshield rake or other with no success.

      GM’s mistake may have been Saab’s positioning, which might helped the low volumes and that it stayed in its small niche.

      Platform sharing was hardly a mistake or sin here.

      Also, what’s wrong with platform sharing? what’s this fetish that cars have to be built on a separate platform to be “pure”? Platform sharing is the past, the present and the future of this business. http://www.thetruthaboutcars.com/2011/06/quote-of-the-weekend-the-platform-sharing-future-edition/

      Technology allows manufacturers to give each model on the same platform its own personality. For us enthusiasts we have an opportunity to take advantage of shared parts to improve the model of our preference, help with the upkeep (both in parts sourcing and costs) and other benefits.

      • 0 avatar
        Zykotec

        In Saabs case the platform sharing wasn’t the biggest problem, it was the sharing of Opel’s engines, and the almost complete stop in Saabs development of new engines. In the early 80’s they had some of the msot advanced turbo engines and technology, even in the ’85 9000 you had a turbo lag that was less prominent than the normal delay in a mechanical injection system normally found in a Ford or Mercedes. This made them very driveable and incredibly fast for their time.

      • 0 avatar
        DC Bruce

        +1 on the turbo technology, Zykotec. Even today the vaunted Honda people can’t get it right. I recently test drove an Acura RDX with the 240 hp 2.3 liter turbo engine: significant turbo lag accelerating moderately from a dead stop, which reminds me of the typical turbocharged Volvo from the 1980s. By contrast, my ’02 Saab automatic (with 10 more HP from the same displacement)does not exhibit that kind of lag, unless you are trying for maximum acceleration.

        And my Saab gets a righteous 30 mpg at 65 mph as well.

        Interesting comment about the Opel motors. In ’02, Saab sold 3 engine models: a 185 hp 2.3 liter turbo 4 (the last Saab motor), a 200 hp 2.8 liter turbo V-6 and a 250 hp 2.3 liter turbo 4. My wife and I test drove all three engines. For the life of us, we don’t know where the 200 hp was in the V-6: it seemed slow and noisy, and a clearly inferior choice to the 185 hp turbo 4, not to mention the 250 hp version of the same engine.

        And, reliability issues aside, the 9-5 wagon was a great car.

      • 0 avatar
        John Horner

        “Also, what’s wrong with platform sharing? what’s this fetish that cars have to be built on a separate platform to be “pure”?”

        Amen. In its heyday, GM was the champion of platform sharing. All of GM’s large cars shared a platform, as did the intermediates and so on. The Camaro shared a platform with the Chevy II. Mustang got its major parts from the Falcon. Jaguar E-types shared their power train and suspension with Jaguar sedans. Porsche got it start using more VW parts than anyone seems to admit. The list goes on.

        To paraphrase an old line: “it isn’t the platform that counts, but what you do with it”.

    • 0 avatar

      One of the reasons GM bought Saab included the APC system which regulated turbo boost with a knock sensor that could tell the octane of the fuel.

      Then, their bulletproof sixteen valve head, which survives today, although its been turned around so the exhaust exits on the firewall side and its got rollers under the cams. Its the basis for many GM 4 cylinders.

      Just a shame GM had to cram their POS V6s into everything and try to turn Saab into some kind of euroPontiac.

  • avatar
    eldard

    I’m tired of waiting. Euthanize it already! They don’t have anything of value that the Chinese would want unlike Volvo.

  • avatar
    Paul W

    “Officially, Kristina stepped down from the board on June 23, which happened to be the same day Saab announced that it cannot meet payroll.”

    Former CEO Jan-Åke Jonsson made his decision to step down the same month Saab made its last regular payment to its suppliers. Saab fans still refuse to admit his resignation had anything to do with Saab being in dire straits, he just wanted to spend more time with his family. I wonder if they will see Kristina Geers resignation the same way?

  • avatar
    Zackman

    AMC,
    Plymouth,
    Oldsmobile,
    Saturn,
    Hummer,
    Pontiac,
    Mercury,
    SAAB:

    Next…?

    • 0 avatar
      DDayJ

      Mitsubishi. At least in the US anyway.

      • 0 avatar
        Pig_Iron

        I’m a sucker for underdog makers. I think the loss of SAAB will be terrible; especially since I was patiently awaiting the return of the turbo coupe/hatch. I don’t think there is an alternate for fun winter driving (sorry Subaru), but I knew the Aero-X was too good to be true. To Zackman’s question: I think my other favorite, Suzuki, will be next.

  • avatar
    tparkit

    “The rest of the board bailed.”

    I’d run like hell too if there was a chance I might be implicated in a massive swindle perpetrated by the Russian mob and its Chinese co-conspirators.

  • avatar
    1000songs

    I don’t know about Sweden, but in many modern jurisdictions directors remain liable for certain payables, even after bankruptcy. Those payables generally include wages and certain taxes. Given the exodus, I assume Swedish law has similar provisions.

  • avatar

    The King is dead. Long live the King. Buick is the new SAAB. I do not see how it is different – same car, same engine. Higher performance Buicks (oops, Opels) – how are they different from SAAB? Aside style of course. SAAB had cool looking but low quality dashboards. Well I will miss it. I remember testing SAAB 9-3 and Acura TSX side by side. Needless to say I enjoyed Acura more even though interior design was kind of cheesy but it was of higher quality than SAABs and it had better engine, better chassy. But Audi A4 trumped both of them, even in FWD form – it just felt luxury, solid car next to 9-3 and TSX.

    • 0 avatar
      CJinSD

      Will as many people care when Buick goes away?

      • 0 avatar

        Exactly how many people cared when SAAB went away? My guess is that less than when Olds, Pontiac or Saturn, well even Hummer, went out of business. But I think lot of people in China will care if Buick goes out of business. In all due respect you cannot ignore China – it beats all other countries in the world in any respect (no pun intended :). China is the number one world superpower right now and livelihood of US government and public employees depend on China’s willingness to buy junk paper from US.

    • 0 avatar
      SVX pearlie

      The big difference? Buick sells a *lot* more cars, both in the US and also in China. That is what makes Buick different and is why it’ll be around for the foreseeable future.


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