By on August 26, 2011

Swedish radio cites an unnamed source close to Saab as saying the troubled automaker was preparing to file for court-protected reorganization, as it struggles to pay workers and restart production. Under that scenario, Sweden would pay worker salaries while reorganization takes place. But at the company’s official mouthpiece, inside.saab.com, a press release refuses to deny or rule out that Saab has chosen this route. The release reads:

Swedish Automobile N.V. (Swan) is aware of certain reports in Swedish media related to a possible filing by Saab Automobile AB (Saab Automobile) for a voluntary reorganization under Swedish law.

Swan confirms its earlier announcements that it is in discussions with several parties to secure the short and medium term funding of Saab Automobile to restart and sustain production. In order to secure the continuity of Saab Automobile, Swan and Saab Automobile are evaluating all available options. Swan will update the market in case of new developments.

This non-denial might be read as a confirmation that Saab is considering filing for court protection, but hasn’t yet decided on that course of action. Meanwhile, Saab has delayed its latest financial report, and its online PR rep continues to blame the media for concluding that because Saab can’t sell cars, pay suppliers, restart production or even pay salaries on time it’s destined for bankruptcy court.

In the comments section of the posted press release quote above, Saab PR man Steve Wade writes

I understand that Saab’s situation creates some degree of uncertainty.  But surely the whirlpool that’s surrounding this company in the press happens – in the press and at their instigation.

There are reports all over the place about the things that “might” happen to Saab.  We’re not the ones writing them but we’re the ones who have to deal with the fallout.  We’re doing the same things we’ve said all along – negotiating and trying to get the right deal done and finished.  This was serious, so we responded.  But if we respond to every specific allegation about what “might” happen to us then you get a crazy game of back-and-forth that the press will keep playing until they hit a desired target.

Expect this whirlpool to continue until a deal is done.  Why?  Because it sells papers.  It gets views.  We take our share of the blame about our situation.  I don’t think we can shoulder all the blame over the public’s perception of it because we can’t outrun the press and we can’t report on things that aren’t done and finalised.

I was with Wade through the first sentence. Then he lost me. Blaming the media for adding one plus one and getting two only increases the perception that Saab’s only hope for a rescue is finding someone who is not aware of how bad things have become. In fact, I would argue that it’s almost irresponsible journalism to report Saab’s circumstances without including some reference to the likelihood of bankruptcy.

And Wade’s argument, that the Saab story “sells papers,” doesn’t jive with my experience: our Saab coverage gets consistently lower pageviews than other, unrelated content, and it doesn’t generate the kinds of strong, engaging comment threads that other pieces do. The fact of the matter is that most people think Saab went out of business years ago, and the only people still aware of its existence are desperate for this sad, drawn-out, slow-motion-death-rattle to be over. Not only does nobody take joy at Saab’s passing, most went through the grieving process when GM sold the brand (if they didn’t already do so when GM bought the brand). The idea that hordes of media consumers are driving a feeding frenzy around Saab’s decaying corpse is downright absurd. Almost as absurd as the idea that Saab will secure new investment and find its way out of this situation without falling into the arms of the bankruptcy courts.

 

 

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22 Comments on “Saab Refuses To Confirm (Or Rule Out) Court-Protected Reorganization...”


  • avatar

    It would have been very easy to publish financial reports by Saab to dispute claims in the press if they were not true. They did not and that pretty much tells the story right there.

  • avatar
    VanillaDude

    Ditto.

  • avatar

    Saab going into “reorganization” is like a cancer patient moving from a hospital to a hospice.

    As explained a month ago in Sweden, there is no wash & rinse Chapter 11 where all the debts are forgiven and the debtor can go and sin some more:

    “In a bankruptcy, the company does not normally emerge as a going concern, while in a company reorganisation the intention is that it does. However, the Company Reorganisation Act is relatively seldom used. There are approximately 100 reorganisations each year. The majority of these reorganisations are converted into bankruptcy proceedings within a couple of months after the initiation of reorganisation procedure.”

    The big question is whether the Saab trademark and the license for the GM IP would survive a bankruptcy as a transferable asset.

    The Community Trade Mark E9614967 for “SAAB”, covering the all important “CLASS 12 (Vehicles) Vehicles; apparatus for locomotion by land, air or water” appears to be owned by Saab AB Linköping, Sweden, S-581 88 – which is the aerospace company. This does not mean much, it depends on how the contract is written.

    A lot of money was spent to keep the Saab car company alive as a going concern. The smart thing to do would have been to sell off “assets” much earlier without the baggage if employment contracts and legacy costs. The main assets would be the brand and the IP. The fact that the company had been kept alive at immense costs points in the direction that these “assets” are not really transferable – which is a common clause in these agreements.

    • 0 avatar
      Pch101

      As explained a month ago in Sweden, there is no wash & rinse Chapter 11 where all the debts are forgiven and the debtor can go and sin some more

      That isn’t quite it, according to your own link.

      In the US, we use the term “bankruptcy” to describe both liquidation (7) and reorganization (11). It would seem that in Sweden, the term “bankruptcy” is reserved for liquidation.

      The majority of these reorganisations are converted into bankruptcy proceedings within a couple of months after the initiation of reorganisation procedure.

      That’s true in the US as well. Most companies in bankruptcy don’t have the resources to support a reorganization plan — they can’t get DIP funding, for starters. Larger companies have a better shot because they are more likely to have a stream of cash flow to support new creditors. Your average mom-and-pop business would not.

      If SAAB had access to the equivalent of DIP funds, then I would think that the situation there would be similar to what it would be here, in that it could get an 11 approved. But those funds seem to be lacking, so SAAB is more likely to end up like Tower Records and Circuit City than either Chrysler or GM.

  • avatar

    Geez…would it KILL you guys to get you butts out of your Audis for an hour and actually go DRIVE these cars(with sticks even?)and then TELL us how utterly worthless and unsatisfying you found the experience.

    • 0 avatar
      340-4

      I test drove a used 9-3 with a stick and was shocked at how nice it was. Too bad I don’t fit in ones with sunroofs. And the GM/reliability issues with them scared me away.

      A previous gen. 9-5 with a stick might be a fun used car to have.

      • 0 avatar
        bill h.

        The Received Wisdom of unreliable Saabs hasn’t been the case with the four of ours over the past decade or so. Certainly not anywhere to the extent that people talk all the time here about their VAG or higher end German makes eating cash and time with shop repairs. But that’s just our experience, and I’m sure that having four cars of the marque isn’t considered a useful ownership sample (sarcasm off). So Fred is correct, actually driving the cars is almost never mentioned in the bashing that’s done–it might affect the Received Wisdom of the Collective.

    • 0 avatar
      geggamoya

      I have three relatives that are saab nutters, my uncle has bought a new saab every 2-3 years for the last 20 years and his sons have also had several saabs, and one of them did actually work at saab for a few years. No major problems with any of the cars.

      I’ve driven the new 9-5, with the 1.6T and 2.0T engines. It is a nice car but apart from the seats being marginally better i could not see any reason to buy it over an Insignia. It just does not feel like a Saab, whatever that is, and i can see no reason to buy it over a competing product. Saab doesn’t even have a hatchback now.

      The Skoda Octavia is the new Saab. Similarly styled spacious hatchback as the old Saabs, turbo engines and reasonably priced.

    • 0 avatar

      From the OP: “Not only does nobody take joy at Saab’s passing, most went through the grieving process when GM sold the brand (if they didn’t already do so when GM bought the brand).”

      fred diesel, please don’t take it personally. My own automotive windmill-tilting involves manual transmissions… I’ll never buy a car without one. I can think of a million “objective” (to me) reasons why they should live forever. Still, I recognize that they’ll probably die off someday. Does it make me happy? No. Is it an inevitable fact of life? Yes.

      Oh, and I drive a BMW, not an Audi.

  • avatar
    belfagor

    I swore off Saab 10 years ago after a failed $6 electric part buried deep under the dashboard cost me $600 of labor.

  • avatar

    Their current cars are real sweethearts. I didn’t really believe it until I drove them all this summer. The 9-5 especially is a beautiful and wonderful car to behold and drive. The investment GM made in it really shows. Every vehicle they make is very well differentiated from other GM vehicles too, in fact the two cars are unlike anything else on the market. It’s a shame, but Saab’s demise will create some spectacularly priced cars in it’s wake, no different than HUMMER, Saturn, Mercury and Pontiac.

  • avatar
    SilverHawk

    It’s been said that Saab fans usually buy their cars used, and I am guilty as charged, having bought 2 over the years. I fixed them up, and enjoyed driving them very much, but was never inclined to purchase a new one. Muller’s plan was to market Saabs to present owners; those most likely to appreciate the brand. Unfortunately, here in the States, we’re more likely to appreciate them used. Sorry, Victor.

  • avatar
    eldard

    How about a court protection from ridicule?

  • avatar
    RockyMountainSaaber

    Saab will lower there MSRPs in the U.S to more reflect their price point. The comparison with BMW and Audi and Benz is poor, for in any location, where there is more than one Saab dealer, or on autotrader.com and grab a southwest flight to a dealer that will give you 5-8K off. The new 9-5s, they are taking near 20 off. You can get from 2-5K off sticker back to the late eighties. I have had six, since the 1980s, only one bad one, a 9000, the rest, great. GM did not do that much to the car, very overstatted for they have the best line up right now.
    A 4 cylinder that has some get up and go, and 35 mpg with my 09 combi wagon.
    I have had their six cyl, Aero, which will blow the doors of the competition.
    Four years bumper to bumper, love it, three years all maintaince, love it. Safety, no cars rate higher, even the new 9-5 get top picks. Look, GM, Ford, Chrysler all went through the same thing. Volvo is Tata motors out of India with Range Rover.
    Top safety pick, almost every year. 5 series BMW, is made in China (the make 3 series there to) and are currently going to triple production in China of the BMW in 2012, and they have done hell of a job keeping it secret. Read that in any auto review, the rags love BMW, but the Koreans are going to catch them soon. When you put a 30K 9-3 that stickers for 37K, now your comparing a Nissan, Camry or Honda. Which you see about 40 every time you drive around, they all look a like. Give me the Saab any day, way more fun to drive, better warranty. The others hold their value better, but a Saab ragtop will hold it’s value better. I also, have bought one a year old, still have 3 years 36K on the warranty left, no problems though. Feel good with my kids behind the wheel of them, full curtain airbags everywhere, OnStar, and leading safety technology over the last thirty years.
    Saab will make it, the new 9-5, I drove it, it blew me away, the technology, features, ride, and how big it is, plus gets 28 mpg highway. I woul like to grab one today, but the parts scare me, but for the price, low thirties I have seen, your getting a car stickered at 47K. .

    I can’t see how 350 workers are wanting their checks when they have not built a car since April? What did they do from April to now? In the U.S, sometimes you get laid off for a period, no cars, I say hold on a bit for your check being late and save your company and career. What did they do? Until then, sales were the highest in years.

    Love them in the snow! Plus real leather only, BMW you have to upgrade from Pleather, and parts are more expensive then Saab, and the 5 and 7 series depreciate at the same rate, with the 7 about being put to rest. So as most other car companies, production will move, who knows, possibly better. It’s long from over though. Head of Suburu, took over in U.S., they cleaned the GM boys out.

  • avatar

    Ed,

    Please don’t take TTAC’s comments numbers as the sole measure of the feeding frenzy around Saab. I certainly wasn’t thinking of TTAC when I wrote about that.

    The most prominent place for Saab stories is, naturally, in Sweden. Here we have new stories literally every day that either dig up old stories and put a new twist on them or speculate with a laser focus on the most pessimistic option possible, as to what ‘might’ happen to Saab in the coming hours/days/weeks.

    And then there’s the other stuff, like one of the papers this week that took photos of a house under construction that’s owned by two of our staff members (a married professional couple with kids – God forbid they should ever build a home). They even doorknocked the neighborhood to see if the house bothered people, etc. This is the level of stuff that we’re dealing with here, now.

    You can deny it if you want, but here in Sweden especially, Saab=pageviews right now and for all the wrong reasons. And the lengths that the media are willing to go to for a scoop are getting more and more extraordinary.

    From your own site – number of stories mentioning Saab in the last 8 days – (at least) four. I can think of one other major story in the automotive sphere that I’d personally read as being pretty scandalous and a search through your archive shows one short story about it, with no attempts a deep-dive discussion like going through articles or comments for quotes as you’ve done here, and no follow-up.

    How about what would be for TTAC, a devil’s advocate story? How about a look at what Saab’s got going for it if/when a short term deal is done that can carry us through to the longer term deals we have in place with the Chinese? If you look, and you don’t have to dig too deep, you’ll see that there’s a lot of very good stuff going on here in Sweden.

    Steven Wade
    inside.saab.com

    • 0 avatar
      Lampredi

      I suppose that even in the very unlikely event Saab survives the current debacle, the involvement of the Chinese will probably have the long-term effect of killing Saab anyway, at least as a manufacturing entity in Trollhättan (to wit: let’s see how many cars Chinese-owned Volvo will manufacture in Sweden in a decade or two).

    • 0 avatar
      Paul W

      “The most prominent place for Saab stories is, naturally, in Sweden. Here we have new stories literally every day that either dig up old stories and put a new twist on them or speculate with a laser focus on the most pessimistic option possible, as to what ‘might’ happen to Saab in the coming hours/days/weeks.”

      It’s true that new/regurgitated Saab stories appear almost everyday, but to claim that these stories sell papers, well, then you’re seriously flattering yourself, sir.

      In fact, I couldn’t find a single Saab-story in the top-10 most read or most commented articles, not even in the business section (!) of SvD or DN. Same thing for goes for the big auto magazines AMS and TV. The highest ranked Saab story in the list of most read articles over the last week on the latter site, shows up in position 21 (yes, TWENTY ONE!), after an article dealing with tractor racing and a review of a Morgan 3 Wheeler (in case anyone was wondering what attracts more attention than Saab).

      The auto magazines will still put a positive spin on any news coming from Saab though, and they’ve always happily published any Saab PR-material, no mater how trivial.

      • 0 avatar

        Try the big paper, Sir.

        Dagens Industri’s front page as I read it right this second (top down, not selective) has the following:

        Electricity story – 25 comments
        Finland/Greece story – 33 comments
        Next 5 stories have 87, 24, 11, 20, and 36 comments respectively.

        First story in the “Saab Crisis” section (no, not focusing on it at all) has 123 comments.

        Like I said. It gets page views here.

        This is not meant to be a pi**ing contest, but if you’re going to respond, please don’t be selective. I live here. I deal with this stuff day to day.

        I was writing about Saab for 6 years or so before I joined the company and what I care about most is how we are perceived in the Swedish market after this is all done and finished, which is the primary point I was addressing in the quote Ed pulled out.

        All that writers seem to see, except for a select few, is bad numbers and horror stories. Nobody looks beyond that to see the product, which is very good, getting better, and has to be the foundation for the future if there is to be one.

        I understand that journos will cover the news at Saab as it happens, but what I’ve said in my own writing and here is that many are going well beyond that, deliberately looking for a horror story more dramatic than the next.

      • 0 avatar
        Paul W

        “Try the big paper, Sir.”

        But isn’t that exactly what I did? As far as I’m aware, DN is Sweden’s largest morning newspaper with THREE TIMES the circulation of DI. SvD is a much bigger newspaper as well. Let’s check the tabloids too just to make sure… nope, no Saab stories in the top 10 over at Aftonbladet or Expressen.

        I don’t need to tell you that DI has covered Saab’s roller-coaster ride more extensively (and perhaps more critically) than arguably any other newspaper in Sweden. Therefore, DI is still the epicenter of Saab debates, and I’ll grant you that the number of comments written in response to Saab articles is still fairly high at this particular site. However, if you look at the number of readers of these articles, you’ll notice that they haven’t managed to reach the top 10 – not this week, not even this MONTH.

        What I’m trying to debunk here is the notion that Saab stories still attract eyeballs and sell newspapers. They clearly don’t. In my mind there’s only ONE Saab story left that would attract attention beyond the group of hardcore Saab fanatics, and that’s the one of the company’s final demise.

  • avatar
    Davekaybsc

    So let’s say if/when the short term financing comes through, and you can actually keep the lights on for a few more months. Then what? Do you really think that buyers are going to start beating down the doors for a 9-4X: essentially an SRX with the old motors that the press trashed and Cadillac dumped? Or the 9-5, a car ludicrously overpriced and simply not competitive in any way against anyone else’s product, save for the real bottom of the barrel stuff that the other guys also can’t give away (Volvo S80 and Acura RL)?

    I know, I know you’ll say sure these products are mediocre GM throwaways, but the 9-3 is coming! That’s what you were gonna say, right? And I suppose shoppers are just going to come streaming out of their C-classes, A4s, and oh *BRAND NEW BMW 3 SERIES* (otherwise known as the unstoppable Juggernaut in that segment) and straight to the Saab dealer (assuming they are still in business).

    Be serious man. It’s over. You had a good ride. There’s just no room left for two Swedish sorta-kinda luxury brands (especially when they get delusional enough to start charging German prices). Volvo won, you lost. Did you see what HP did with WebOS? Do that. Shut it down.


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