Bloomberg BusinessWeek reports that Saab has to pay some $620,000 today in order to keep Sweden’s Debt Enforcement Agency at bay. Should Saab fail to pay suppliers Kongsberg Automotive and Infotiv within the next 24 hours, Swedish Debt Enforcement Agency officials say
The collection process that may start tomorrow would include investigating Saab’s bank accounts and potentially also other assets.
Assets will be frozen while Saab’s worth is assessed, a move that would essentially end the existence of Saab as it currently (barely) exists. Saab spokesman Eric Geers says
We’re of course totally aware of this situation with the collection agency, but I can’t comment on what we’re going to do,
but other than pulling out from the Frankfurt auto show in order to focus funds on restarting production and selling another tranche of value-diluting shares, Saab hasn’t done much to respond to the latest crisis. And with another $795m due to suppliers in “about a week,” time is slipping away. Luckily for the True Believers, there’s still a shred of hope-against-hope to hang on to, as Saab’s PR man Steve Wade says something called “The Deal” is in the works.
Over at inside.saab.com, the brand’s official web outlet, Wade writes:
We remain in somewhat of a holding pattern at the moment. We’re waiting for The Deal. While we’re waiting for The Deal, employees are returning from their customary summer vacations, arriving at work and going about whatever business they can. The carpark here at Saab was more full this morning than at any time over the last five or so weeks, a sight that was a pleasure to see on this cool, rainy Monday.
The Deal that our executive team are currently working on is the one that will carry us through this near-term liquidity shortfall and into the future, so that we can re-start production and get back to being a car company again, which would be a nice relief from our present role as a corporate piñata.
Get back to being a car company again? What the folks inside Saab don’t seem to understand is that they’re working all-out to fix one side of the business, production. Meanwhile, the other half of “being a car company,” selling the cars, isn’t happening either and won’t be fixed by restarting production. Saab’s monthly US sales are now in the triple digits (as is their dealers’ days of supply), and at 3,822 sales year-to-date, the Saab brand is selling only slightly better than the Volvo XC70 (3,156), Jaguar XJ (3,254) and Chevy Volt (2,870). But let’s pretend that the Saab brand isn’t underperforming even compared to underperforming models… what exactly is “The Deal”?
It’s as frustrating for us as it is for any other interested parties that we can’t talk about it more, but such is the nature of these negotiations. Our stakeholders are either waiting and going about their other business, or in some instances, taking advantage of the various mechanisms available to them to safeguard their futures. We hope to be able to help them set those mechanisms aside in the near term.
So, as a listed company, Saab can’t say a word until the ink is dry on “The Deal”… although by hinting that it’s in the works, Saab is trading in the very unsubstantiated rumors that it decries. And if Saab hasn’t completely lost credibility with you, Wade offers up his reasons for why Saab is worth sinking your hard-earned money into:
If you’re a young, emerging company, you can’t create 60+ years of history and achievement overnight. As one of my colleagues here at Saab pointed out a week or so ago, if you were ‘doing a Lexus’ – creating a luxury/premium arm from nothing – you would most likely commission a study into what that new brand should represent, what its typical clientele would look like, where it should be positioned, etc. After spending those millions of dollars, you would end up with a document that more or less would describe Saab.
This company has an intrinsic value that’s boosted even further by our new products, our modern plant and our excellent technical capabilities. When you’ve got all of those things, you’ve got something you can build on, something that will be of interest.
But doesn’t the Lexus experience prove that you don’t have to buy up a brand in order to have luxury success? Besides, Saab has no credibility as a luxury brand, as it’s been stuck for ages in the no-mans-land of “Swedish entry-premium.” But, argues Wade, Saab has other assets including “lessons learned” (although if this were the case, Saab would be out of business), Russian and Chinese partners (i.e. major complications for any new investor) and some forthcoming technology. Plus, says Wade, Saab has one other major asset:
Victor Muller – It has been extremely disappointing to read some of the material printed about our Chairman and current CEO. Many seem to forget the obstacles he had to overcome to acquire Saab in the first place. Some even suggest that he is draining the company of funds (which doesn’t quite explain why employees have still been paid over the last months) – the defamation that he’s endured has been phenomenal. Victor Muller is part of a team – he’s a key part of that team, but a team member nonetheless – that is working around the clock on this situation. You bet against my boss and his team’s capabilities at your own risk.
Well, he pays your bills, Mr Wade, so we wouldn’t expect you to say any different. But given the swing against Saab in Swedish public opinion, as well as the fact that Saab is literally hours away from having its assets frozen, and your bet sounds awfully attractive. What kind of odds would you be offering?