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?
“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. )