By on December 15, 2011

After enduring a rocky relationship with Saab’s management, Guy Lofalk is officially out as court-appointed administrator for the ailing Swedish brand. But although Saab boss Victor Muller had long hoped for Lofalk’s ouster, the news wasn’t all good for his slow-motion “rescue,” as Lofalk’s first replacement had to step down before he even began his duties. Reuters calls the abortive administratorship of Lars-Henrik Andersson  Saab’s “latest embarrassment,”  but TTELA reports that Andersson’s “defection [was] not based on a pessimistic assessment of Saab.” On the other hand, at least one of Andersson’s colleagues thinks he dropped out because Saab is “screwed.”

In any case Soderqvist seems to be the last remaining Saabtimist in Sweden, insisting he believes in the new plan to save the zombie brand, and he will serve as long as he continues to have faith… so what’s the new plan anyway?

JustAuto reports that

European supplier body CLEPA estimates up to EUR700m (US$910m) could be made available for beleaguered Saab to restart production, if plans by Chinese manufacturer Youngman and an unnamed Chinese investor bear fruit.

“That means [they – Youngman] will provide EUR200m and a financial investor will provide EUR500m – that will be enough to restart and give Saab a chance,” said [CLEPA CEO Lars] Holmqvist. “Youngman has already spent a lot of money, if nothing else to protect the investment they have already made.”

And where, pray tell, does this faith come from, that a Chinese bus manufacturer and an unnamed “financial investor” is ready to drop nearly a billion dollars on the auto industry’s most notoriously undead brand?

The CLEPA boss also revealed this week’s mood had swung from one of gloom to hope following his receipt of a bank statement indicating Chinese manufacturer Youngman had paid Saab EUR3.4m, believed to have covered overdue Swedish government taxes.

The supplier chief also detailed how Muller had been urged to declare bankruptcy in a bid to avoid any personal liabilities, but had resisted, a move Holmqvist endorsed.

“We have been up and down listening to Victor Muller,” he said. “On Friday I was quite pessimistic and on Friday night he [Muller] sent a copy of the statement slip that the money had been sent by Youngman.

“Then, on Monday, he was pressed by people around him to file for bankruptcy. They were afraid they would be personally responsible for debts. But he refused and he was right because the money arrived and he got a respite again. Another rabbit hopped up from the hat – I knew what was going on, but I did not think it was going to be in time.”

Where to start with this? How about the fact that €3.4m is hardly an indication that almost a billion bucks is forthcoming.. especially given the difficulties of transfering money from China? Or what about the fact that the transfer in question was for a transaction that Lofalk considered “a new obligation” (forbidden during reorganization), an accusation that was met with a claim that it was part of an earlier deal and intended for salaries, not taxes? The unknown identity of the “investors” willing to drop €500m on Saab? The fact that these investors, not Youngman, will control the brand (in order to keep GM happy)? The fact that US dealerships aren’t selling the cars they have, making a production restart largely pointless? In any case Holmqvist admits that his group stands to lose “a lot of money” if Saab goes bankrupt and is willing to back any plan (reality, it seems, notwithstanding).

The 16th was supposed to be the day that decided Saab’s fate, but the brand has been given another weekend to get the mysterious Chinese money into its accounts. A hearing is now scheduled for Monday, at which point cash (likely upwards of $60m) must be on-hand. An optimistic new administrator, and desperately credulous suppliers mean nothing if November and December salaries aren’t paid by then and the tax man is left wanting. Muller and his rotating cast of supporting characters are good at buying a week here and a weekend there, but that can’t go on forever. And the real tragedy is that all these delays have only made it more likely that Saab will die on the week before Christmas.

 

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15 Comments on “Our Daily Saab: A New Administrator, A New Deal, Same Old, Same Old...”


  • avatar
    Pig_Iron

    Here’s hoping for the best to all concerned. I think a world without SAAB will be an emptier place. But then I’m the type that misses the Ranger and Mazda RXs.

    • 0 avatar
      windswords

      +1 If car company dies in the middle of a forest does that mean that the auto world is worse off? YES. I have never rooted for a automaker to go out of business, even if I got burned by their product. I believe in personal as well as corporate redemption (as a Chrysler fan I have too!). I have never owned nor never will own a SAAB (I rode in one only once). But I hope they make it – somehow. On the other hand I don’t begrudge GM for protecting their IP. If it came down to SAAB surviving at the expense of the Chinese getting their IP I would sacrifice SAAB.

  • avatar

    Rumor has it that the new plan involves immediate payment of salaries and the costs of restructuring, a long term loan that runs in the hundreds of millions for which preferred stock will serve as collateral and a new joint venture. The big questions are: -1- if GM will perceive all this as acceptable (and decide to restart the production of the 9-4X), and -2- if CEO Muller is going to ask for GM’s blessing or will tell the court he does not need to.

  • avatar
    moosex

    … and there is a new twist to story (again)

    For now the court has denied the resignation of Lofalk, and the appointment of Soderqvist. The matter will be re-evaluated on Monday.

    • 0 avatar
      Its_Magic

      Never a dull moment ;)

    • 0 avatar
      Ingvar

      That’s a non issue, the media is just trying to spin it as news.

      Lofalk already said the day he resigned that he would stay put until the courts make their decision. If the reconstruction ends, his job is finished anyway. If they decide for a prolonged reconstruction, he wanted someone else to take over, as he himself favoured an end to the reconstruction. What you are witnessing now is just Muller spinning the news in his favour.

  • avatar
    philadlj

    Welcome back, Ed!

  • avatar
    GS650G

    It’s starting to look like Youngman is buying a seat at the buffet which will be SAAB eventually. I wonder if they intend to push to the head of a line when the end comes because they paid the bills this week?
    SAABs biggest problem seems to be the bills incurred from taxes, salary, and suppliers however the real problem, AGAIN, is they didn’t sell enough cars at a profit before. Unless we see Black Friday lines forming at SAAB dealers clamoring for product it’s all good money after bad.

    • 0 avatar
      Lorenzo

      But why would Youngman, a bus maker, want a seat to pick the bones of Saab? Would it make any sense to buy the tooling and ship it to China? I assume not just the powertrain and electronics, but the epsilon platform itself is part of GM’s IP. The biggest question of all would be how Youngman gets the money out of China.

      The only possibility I can see is Youngman keeping production in Sweden and output out of China, hoping that will satisfy GM and its Chinese partners and owning Saab as a non-Chinese investment. Other than the possibility of using the European and U.S. market channels for Chinese imports sometime in the future, why bother, and why would the Chinese government approve?

  • avatar
    Conslaw

    This dude looks like Ken Jennings circa 2030. “I’ll take car companies on life support for $500, Alex.”

  • avatar
    Ingvar

    This just in: GM says no.

    Muller: “It’s hearsay and meant to influence the court in a negative way”.

    http://ttela.se/ekonomi/saab/1.1469207-muller-det-ar-horsagen-

  • avatar
    Ingvar

    GM says no – Again.

    GM will not approve the plan by Muller and Youngman currently in the workings, says GM spokesperson James Cain this afternoon.

    “I would like to clarify GM:s intentions regarding the different proposals that have been laid out by Saab the last few days. Including the wrongful statement that approval by GM will not be needed”.

    He means the new proposal does not differ from the earlier proposals they have already turned down. All proposals will directly or indirectly change the complete ownership structure of Saab, something that GM can not approve of.

    http://ttela.se/ekonomi/saab/1.1469197-gm-sager-nej-igen

  • avatar
    Ingvar

    Muller: “GM has nothing to say in the matter, because Youngman will not recieve any shares of Saab Automobile.”

    http://www.svd.se/naringsliv/muller-gm-har-inte-nagot-att-saga-till-om_6716793.svd

  • avatar
    jeff_vader

    No wages, No permission from GM, the landlords demanding bankruptcy, the unions demanding bankruptcy; Monday must finally be the end.

    Please.


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