Saab: Money Dispose-All, Made In Sweden
Saab is living off charitable donations and newly issued stock to allow its workers to live from paycheck to paycheck while doing nothing. Over at the Blog of Good Hope every little donation to the cause is praised as the Final Deliverance. According of a Blog of Good Hope post, representatives of the Chinese savior Pangda are in Trollhättan this weekend. One of the questions undoubtedly will be “how long, how much?” Or in the language of venture capitalists “how long until we run out of runway?”
How much does it cost to keep the lights on at Saab? A friend of TTAC (Tack så mycket) pointed us in the direction of an older article in Dagens Industri, which budgets the month running costs of Saab as follows. Being Swedish, Dagens Industri provided a budget in Swedish Kronor, we provided the conversion to dollars, using today’s dollars.
Saab’s Monthly Running Cost
Now of course, this assumes that Saab actually makes something, namely cars. Dagens Industri charitably assumed that Trollhättan makes 5,000 cars a month. (Volkswagen in Wolfsburg does that in two days.) If no cars are made, because there are no parts, then that’s a big savings. No cars to sell, no marketing. While we are at it, save R&D. Nobody will notice. Voila, we have what is called a “Nuclear Winter” calculation in (American, behind the scenes) financial parlance. And this is what we present to you, again using Dagens Industri numbers.
Saab’s Monthly Ruining Cost
SEKUSDNuclear WinterLabor: 250,000,000$38,586,250$38,586,250Production and parts:600,000,000$92,607,000Factory Operation:80,000,000$12,347,600$12,347,600Marketing:80,000,000$12,347,600Development:160,000,000$24,695,200Total1,170,000,000$180,583,650$50,933,850Whether the final number is $35 million or $ 45 million does not matter: A whole lot of money is going down the Swedish Dispose-All while not a single car is made. And knowing my Chinese friends, they absolutely hate it if just a little money is wasted.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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@Bryce, Makuribu et alii: Whether the story of SAAB is a sad affair or not will be determined by the end of the story. Whatever you read - and I've read about dead corpses and/or Zombies so often that I can't even remember - one thing is crystal clear: the end of the story may be near or not, but it certainly has not come yet. Before we know the ending, we can't say if it's sad or happy or whatever. The rest is speculation - some of it on a very, very professional level (thanks to Bertel Schmitt), some of it on a repeating-a-bad-joke-untll-not-even-the-one-who-tells-it-thinks-it's-funny-anymore-level. Admittedly, speculation can be fun, and it can be fun to be proved right by the facts. Some people make a living on that - at the races.
If you had been to Wolfsburg, you wouldn't think it was anything to envy.