By on October 6, 2011

Yesterday, we reported that Saab was waiting for some $93 million to arrive from China. The matter has not changed. Now, people on the inside get the impression that yellow knight Youngman wants out. This morning, Swedens’s Dagens Industri cited an inside source that says that Youngman wants out, and another Chinese maker wants in. Yeah, sure.

Youngman had agreed to give Saab the $93 million in exchange for production rights to the PhoeniX platform. Money is needed to tide Saab over while they are in reorganization. During that time, no new liabilities may be incurred, said Dagens Industri yesterday. The money was promised for end of September. It has not arrived.

An inside source cited by Dagens Industri expressed its wonderment about Youngman:

Without the promised money from the Chinese, there could be a breach of contract. The fact that the money is delayed suggests that Youngman may no longer be interested in Saab. Are they even serious?”

What also is in doubt is that China’s NDRC will approve the deal on time. On that, Dagens Industri got ahold of one of the best experts available: Bengt Hamsten. The Swede is a professor of Mechanical Engineering at the Chongqing University in China, was CEO of the MAN Truck and Bus division in China, and member of the board of directors of MAN Nutzfahrzeuge. Hamsten knows Youngman’s owner, who wanted Hamsten as a director of Saab once the deal is consummated.

Saab’s wishful calendar said NDRC approval would come by October 14. No way, Hamsten says to DI:

 “I do not think that the NDRC will render a clear decision on 14 October. There will likely be a partial decision that may untie some knots, but not all. “

Government support is needed above and beyond an NDRC decision. Hamsten doubts that Youngman has the money needed to develop Saab:

“No, they do not, even Geely did not have the money to buy Volvo Cars by themselves. These guys are not billionaires, they get money by bringing in partners such as the provinces and the Chinese government.”

Someone who was picked as a director by Youngman is willing to have his name in the paper while dispensing doubt.  He doesn’t seem to think the job is still available.

As Youngman becomes doubtful, other rescuers are being floated. The source familiar with the matter told Dagens Nyheter that Volvo owner Geely has shown interest in Saab. This hit the Dow Jones Newswire (via Fox News) and immediately made the rounds. “According to the paper’s source, Geely has shown “genuine interest” in the carmaker and contacted lawyer Guy Lofalk.” A little later, Dow Jones called up Geely, only to hear from its executive director Lawrence Ang: “We have no interest in acquiring Saab.” Scratch that one. Geely already has Volvo. They don’t need a Saab.

The trotting-out of Chinese suitors has become routine in these soap operas. People who know the Chinese (and Hamsten does) know that they are very reluctant investors. Investing in foreign companies doesn’t have a rich tradition in China. They are used to foreigners bringing money. Giving money to foreigners is still a bit alien.

There is one problem few want to admit:  Saab cannot be saved  with a few hundred million.  It takes many billions that probably are invested better elsewhere. Just to develop one car can cost a billion bucks. GM brought more to the table than money. They had platforms, engineering, a bank, a distribution network. Nevertheless, they failed.

Of course, say the faithful, GM failed because they did not know what they were doing.  And the people who are in charge now do?

Postscript:

“Again, I don’t think we should be too worried about either of these issues, just that this is what is going on behind the scenes yet reported publicly. There’s also a healthy amount is going on that we can’t really report on that gives us enough confidence not to report on this story as breaking news.”

(Final chapter of a long article on the matter, appearing today in fanzine  Saabsunited. )

 

 

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17 Comments on “Our Daily Saab: Are These People Serious?...”


  • avatar
    MrWhopee

    Makes sense, if someone wants to use Saab’s platform, it’s better to wait for Saab to go bankrupt first, presumably, they’ll get the platform cheaper, might even get to snag the equipments needed to make it too. Also, so far the people interested in Saab seem to be small time and unlikely to be able to bankroll Saab’s effort to be a viable car company once again.

    • 0 avatar
      jeff_vader

      The big question now is who actually owns the rights to the PhoeniX platform? Under the terms of the Re-Organisation agreement, no money could be transfered directly to Saab/SWAN from Youngman. So a shell company was set up, Swedish Automobile Coöperatief U.A, to hold onto the rights til the money arrived and then funds would be past direct to Saab/SWAN. Swedish Automobile Coöperatief U.A was set up directly by Saab/SWAN for this purpose early in September. I wonder who might possibly own this company and if the rights have already been legally transfered before the funds have arrived?

  • avatar
    The Doctor

    The whole SAAB saga (SAAGA?) makes me think of the situation with Greece – everyone knows it’s not a going concern and is unlikely to suddenly metamorphose into one within the next few years. Just let the sodding thing go under so people have some certainty and can get on with their lives.

  • avatar
    Truckducken

    Zzzzzzzzzzzz…

    This blog occasionally takes the lead in the industry. So here’s a suggestion: let’s be the first to declare Saab officially dead, and move on. The rest of the world can follow at its own pace.

  • avatar
    getacargetacheck

    Where are all the Saab buyers? You know, the ones who made a stink holding up those “Save Saab” signs outside GM’s headquarters. They’re about as non-existent as the so-called “job creators” in the US who have benefited from tax cut after tax cut with the result 10% unemployment. Or OJ’s search for his wife’s “real killer.” Perhaps they’re all at the golf course?

    • 0 avatar
      gslippy

      You make a good point.

      One thing I’ll concede in support of the GM/Chrysler bailouts was that they had actual customers – past, present, and future. Saab doesn’t.

  • avatar
    Its_Magic

    Geely wants Saab, or to be more precise: They want certain parts of Saab. Saab has a lot of engineers (Volvo is still looking for almost 1.000 of them) and the very profitable parts business might be a good deal (a almost certain profit).

    Geely don’t want Saab as a whole (that is what they said today). They didn’t say that they don’t want to have anything to do with Saab (or parts of it).

    The Chinese government will decide that it is better for them when Saab goes bankrupt. In that case Geely & BAIC can devide what is left of Saab.

    BAIC gets the tooling (which they can use for their own models) and they want the Phoenix platform.

    Geely wants the R&D people and the lucrative parts business.

    • 0 avatar
      jeff_vader

      If the rights to the PhoeniX platform now legally belong to another company, as I’ve mentioned above, wouldn’t that company be allowed to sell them to whoever it pleased even if no funds had changed hands as had been promised as part of the original sale?

      If that was to be the case, I’ve got a box of donuts that says it will turn up at a very small, non profit making sportscar company as the basis of a $110,000 sportscar.

      • 0 avatar

        Yes, and supposedly, that shell company in the Netherlands bought that transferable license for 70 million Euro. If those would have been paid, Saab wouldn’t have any money problems.

      • 0 avatar
        Its_Magic

        As far as I know the license is non-exclusive and non-transferable.

        Also when Youngman gets the green light and becomes a shareholder (and pay the 136 million) they will return the license back to Saab. That ofcourse has also to do with the fact that Saab has to repay the 70 million to whomever Youngman borrowed it from.

        The license is only a pledge to Deutsche Bank. That is were Youngman wants to borrow the money (they can’t use “Chinese” money). Deutsche Bank wants some security and that’s why they invented the platform license deal.

        But my guess is still that Youngman will never pay.

  • avatar
    Acd

    Saab has been losing big money for years. They are now at a point where $100 million keeps them going for months, not years. If there was any light at the end of the tunnel GM would have kept them but instead they realized that Saab was a perpetual money pit with little or no financial upside. As an investor you’d be better off putting your cash in your mattress that owning a piece of the business currently known as Saab.

    Like many storied names from the past like Auburn, Jordan, Marmon and hundreds of others Saab found themselves in a situation where their meager sales volume no longer generated the necessary revenue to reinvest in future products, let alone keep current production going.

  • avatar
    Seán Moloney

    GM didn’t fail because they didn’t know what they were doing. GM failed because they didn’t DO anything. If GM was serious about making Saab a true competitor to BMW Audi and Mercedes they would have allowed Saab to develop new models.

    Saab 900 1993-1998, This car was based on an old Opel platform from the 80’s

    Saab 9-5 1997-2009, Again based on old Opel platforms

    Saab 9-3 1998-2002, Nothing but a face lifted 900

    Saab 9-3 2002-Curent, the first time GM actually invested any kind of money into Saab. And it showed, Saab had it highest selling year at the beginning of this model selling what I think was around 130,000 units.

    Saab 9-3x 2009-Current, Saab had the 9-3x near ready in 2006 when the 9-3 SportCombi was launched, however GM canned it deciding that the Epsilon platform would not get XWD (AWD), only to back flip in 2009 when the 9-3x was finally launched.

    Saab 9-5 2010-Current, In actual fact Saab had an all new 9-5 ready to go in 2005. GM however, put it on hold, instead opting for a cheaper facelift for the already 9 year old 9-5. But the 2010 Saab 9-5 shows that GM could have done well with Saab, sure it might not be the best car around. But give it a few tweaks here and there and it could very well be worthy of being a competitor to the German 3.

    Saab 9-4x 2011-Current, Again this shows that GM could have done wonders with Saab. People say that the 9-4x is nothing but a Cadillac dressed up. Well the guy who developed the Cadillac and the Saab worked for Saab at the time. Of course Cadillac got to launch theirs first, after all its American and is therefore one of GM’s golden children.

    Oh and lets not forget about GM’s laughable American exclusive Saab’s. 9-2x and 9-7x, because that was pure engineering genius. In the land of academia we call that plagiarism which would result in an automatic F

    GM did nothing to help Saab, and by the time they realised that they needed to develop new products to help keep the company modern and competitive the global financial crisis hit and well here we are. Will Saab succeed to realise its full potential? Only time will tell. GM however is an old, slow moving dinosaur, their time has passed. In terms of big automotive groups Volkswagen is the way of the future.

  • avatar
    jeff_vader

    I’m becoming increasingly convinced that Muller’s actual plan is to confuse everyone so much, that Saab will stagger on because nobody will be bothered enough to wade through all the red tape & dis-information.

    ttela (Trollhattens local newpaper.) is today saying that the Geely deal is still a goer.
    Saabs Untied say that they have talked to Youngman and the Chinese company’s spokesperson has no idea where the story about them wanting to drop out has come from.
    DI is now reporting that the government are thinking about helping out Saab.
    Unsurprisingly Saab/SWANs share price has leapt 16% this morning and is now trading at over one euro for the first time in months.

    Round and around it goes, where it stops only Muller knows…


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