By on December 13, 2011

Yesterday was a very tumultuous day in a tumultuous year at Saab. As it has become customary, the hectic became strongest when money was due. On Monday, payroll and social security taxes had to be paid in Sweden, and the government wants to see cash, not idle promises. That’s what created rumors of bankruptcy. It also caused Martin Larsson to step down from the board, in an apparent attempt to avoid liability.

Later in the day, the red knight from China rode to the rescue:  The mysterious €3.3 million are now allegedly on their way from China, honestly now. Sweden’s Dagens Industri heard “from an industry source” that  the money is now coming, to be used to pay the taxes. According to DI, “The money from Youngman had already been paid on Friday, but was stuck in the Chinese banking system and was therefore delayed.”

We had told you that you better have all your paperwork ready to expedite a bank wire from China.Converted to dollars, €3.3 million are $4.35 million. At DI, that money turned into “5 miljoner dollar, cirka 34 miljoner kronor” ($5 million, approximately 34 million Swedish crowns). Saab either received a super rate, or it’s a whale of a rounding error.

A total of $43 million has been promised to Saab. Let’s see whether it arrives. Money from Youngman has a history of suddenly getting lost in transfer.

Will it help? The usually well-informed and level-headed Sveriges Radio does not think so. It makes a quick and sobering calculation:

“The tax authority wants 34 million [SEK, $4.95 million] now and 180 million [SEK, $26.2 million] later. Payroll is 100 million [SEK, $14.6 million] a month, that’s for November and December will probably paid as well.”

There are $60 million on the back of that envelope, and it is probably just scratching the surface. All for doing nothing and for paying a workforce that has been mostly been staying at home since April. Talk about a money destruction machine, all in the name of keeping a zombie Saab officially alive.  If Saab dies, the IP will go back to GM, and the brand will go back to Saab AB. Keeping it alive has not kept GM from refusing to agree to a sale of its IP to China.  The brand alone is worth nothing in China, and a Saab without the technology is worth nothing the world over.

In a word, it’s a mess. No wonder that Odd Swartling, Chairman of Sweden’s Bankruptcy Trustees Board, interviewed by Sveriges Radio says:

“ I don’t think anyone has seen anything like that. But the likelihood that the company will manage to survive is very low.”

 Saab hasn’t made money as long as I can remember, despite massive infusions of capital and technology from GM. It is easy to dismiss GM as someone who doesn’t know what they are doing, but you don’t become the world’s largest automaker by being stupid.  What Saab needs to have a fighting chance is more than a few billion dollars, and a large automaker with the scale and know-how to make this work. That little busmaker Youngman in China has and is neither. Just look at the hash they made out of Lotus.

I doubt that Victor Muller ever wanted to lead Saab back to its former glory. He is a turn-around artist who buys companies that “need TLC”, he pretties them up and sells them for a quick Euro. With money from dubious sources who are out on bail in London, he most likely wanted to do the same with Saab. It worked for a towing company and a fashion house. The car business is the toughest business on earth. It eats amateurs alive.

Whether the near-dead will be kept on the drip will be decided on Thursday when the court in Vänersborg convenes. Svenska Dagbladet  thinks that the do not resuscitate order can only be avoided if Youngman puts some $30 million on the table by Thursday, along with a credible long-term plan. Even then, too many people will have to agree to the plan to make it work, says the paper: GM, Sweden’s National Debt Office,  “and the Chinese super-authority NDRC.”

It most likely will never come to that. Svenska Dagbladet sees:

 “A microscopic chance that Youngman actually pays $30 million to continue the court hearing.”  

Trading of Swedish Automobile has been halted in Amsterdam, pending an announcement that never came.

PS: Minutes ago, Sveriges Radio announced: “Saab has received money.” It will go to the taxman. Who tips his hat to the Chinese donor. The employees are being told that efforts to “secure the rest of the funding t required to pay salaries and continue reconstruction” are underway.

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39 Comments on “Our Daily Saab: The News Of Saab’s Survival Are Premature...”

  • avatar

    I’m humming Whitesnake’s “Here We Go Again”. I assume that GM can stop the deal any time, arguing that resurrecting Saab got a strong Chinese “quid pro quo” taste to it, perhaps not literally in the signed contract, but more in implicit terms (via not to be disclosed side letters).

  • avatar

    Interestingly I think the Chinese may have found a way around GM by leaving ownership of SAAB where it is. I guess they may backward engineer some of the GM part to make some cars in China. Gradually they could then move off GM sourced parts and SAAB could within 3-5 years become Chinese. In the meantime I guess the deal will ensure they just get all the profit.

  • avatar

    I like the promised, positive spin of the article ; ) Seriously, I don’t understand why Youngman would risk this money of there were not positive signs from the Chinesegov and a work around GM which seemingly can stop most any deal. We will have to wait and see. A step in the right direction, I’d say.

  • avatar

    Our Chinese friends are masters of backward engineering. They only need to buy one SAAB 9-5 and one new SAAB SUV (also know as the adobe) and they can, with some minor changes, replicate both. Not sure why they are bothering at this point to buy the whole cow when all they really need is a litlle milk.

  • avatar

    The amount received is EUR 3.4 million, according to Victor Muller himself.

  • avatar
    Seán Moloney

    Saab hasn’t made money as long as you can remember? You must have a memory worse then my mother. 2010 was Saab’s last profit. Before that was 2003? Or maybe it was 2002 and before that it was 1995, or perhaps it was 1994. There was also the chance that Saab could have made a profit when they were making the Cadalic BLS, is that what it was called? I’m not sure, some crappy American car that flopped in Europe (as they all do). Anyway the point is Saab got stuck with the development costs etc. something that Cadilac should have had to pay for, not Saab.

    • 0 avatar

      Where’s the proof SAAB had to foot that bill without reasonable in-kind compensation?

      Besides, even if somebody can produce irrefutable proof of that, this Caddy by SAAB exercise was likely designed as a not uncommon way to try and bring economies of scale to SAAB to keep employees in the development and production departments working, and keep it alive by filling their state of the art production facilitiessound if likely so, then SAAB failed in that secondary mission too.

      Crappy cars failing in Europe? If the Caddy pot is black due to being a failure in Europe, then the SAAB kettle is yet backer, as SAAB sadly but truly is and has been an unsustainable failure with ever better looking but less relevant vehicles in both the US and Europe for more than 20 years running.

    • 0 avatar

      2010 was Saab’s last profit.

      Delusions are dangerous. In 2010 Saab (the car company) had a net loss of 218 million Euro on sales of 819 million.

      Hint: The numbers in brackets are negative numbers.

      Please stop insulting me and your mother. We don’t like that. Go to your room.

      • 0 avatar
        Seán Moloney

        Not that it is any of your business but I am in my room. And at the risk of sounding my age, WHATEVER!!! I give up, you aren’t realists, realists actually leave things alone after a while and get on with life. You are stuck on Saab, I can understand why I’m stuck on Saab, I actually like them, but you? If I had to go to work with somebody so negative everyday I would be either a very depressed person or I would have shot myself.

        By the way, I obviously made a mistake and kind of look like an idiot, with the whole 2010 thing. That’s what I get for reading Wikipedia I suppose, the stupid sack of crap that obviously isn’t regulated, or the regulators just don’t do their jobs. Where into bagging out other websites here aren’t we?

        Oh WHATEVER!!! I give up, I give up, I give up. You can keep all of your negativity or “realness” as you would probably argue. But anyone who makes people sad and angry at the same time is probably giving off some kind of negative vibe. No offense. I’m going to turn the fan on, get under the blankets and go to sleep.

      • 0 avatar

        Before anyone gets thier knickers in a twist, do ALWAYS recall that whether Saab as a wholy-owned subsidiary of GM made a profit or not was pretty much entirely up to how GMs accountants cooked the books. There is enormous leeway under accounting rules as to how you do that, and frankly IMHO GM has a number of VERY good reasons for Saab to always show a loss. Why pay Swedish taxes when you don’t have to, as a big one.

        As one example, I believe it has been pretty well documented that while costs for cars sold in the US were booked to Sweden, profits from them were booked to GM NA. Which is perfectly legal, but sure does not do much to make the Swedes look good.

      • 0 avatar

        Well they did a great job at being profitable *cough* in their first two years of independence.

    • 0 avatar

      By the way, I just absolutely love the way some die-hard Saab fans are time to time rationalizing the loss making.

      – In the few years when Saab was making profit GM’s books are accurate
      – In the years when Saab was losing money it is because GM’s books are not accurate. In these years losses which were made in the other GM’s units were just pushed to Saab’s balance sheet.

      All that anyone needs to know is that GM wanted to kill Saab, and no company kills units which make money. It really is as simple as that.

    • 0 avatar

      The Cadillac BLS a crappy American car? It was a rebadged Saab 9-3! The BLS was developed by Saab and not by Cadillac. So it was crappy Swedish car with an American badge.

  • avatar

    @Robert.Walter – hahaha – I actually like Citroens very much! Wish I could afford a DS. The car is my ’80 900 turbo 5 door. Has 44k unrestored miles. Sadly, one of only a handful left in the U.S.

    @ BS – you beg the question. Are you saying the fund transfer is really a lie? Listen, I’m not delusional like you may think, even if I own an old Saab. It is definitely an uphill and difficult battle. Saab surely appears painted into the corner. But why the money now? Its not an small sum.

    By the way, I find TTAC a fun read. That’s why I keep coming back. Seriously.

  • avatar

    What does Saab AB (the defense company) think about all of this? Seems like an end to the pathetic carmaking saga is in its best interests. The two other corporations who have shared their names with their famous formerly-owned carmaking operations have worked better: Rolls-Royce and Volvo (for now).

    • 0 avatar

      Going rather off-piste here, there’s a long and chequered history of auto-aero links, especially from the motor side. Some of them came off rather well, I’d say.

      SAAB (Svenska Aeroplan AB, Volvo Flygmotor, Rolls Royce, Bristol, Honda(Jet), Mitsubishi, BMW, Maybach – Daimler, Ford… and I’m sure many others that don’t sprint to mind right now.

      As for Saab AB, I’m sure they’d now love to have their brand unsullied by the unholy mess that their erstwhile car offshoot has become.

    • 0 avatar

      Saab AB (the defence company) is rather pissed due to all the bad publicity, and the fact that their subcontractors insists on cash on delivery. I’d imagine their goodwill loss more or less equals the money they got paid once in the time for Saab the auto manufacturer.

  • avatar

    I wasn’t totally sure you meant by “Just look at the hash they made out of Lotus”. Just looked it up:

    – and I’m still not totally sure. A mashup of Youngman, Lotus, Detroit Electric, Iran Khodro, Proton, ZAP, Saab and MAN can only go right. Right?

  • avatar
    kid cassady

    “It is easy to dismiss GM as someone who doesn’t know what they are doing, but you don’t become the world’s largest automaker by being stupid.”

    Is that the sound of Robert Farago spinning in his grave?

  • avatar

    So basically, they are still dragging this out for our amusement. Excellent. Carry on.

  • avatar

    As in most cases, the tax man gets his share first.

  • avatar

    Court decision has been postponed until Monday 13:00. Muller has requested a hearing where he and Rachel Pang will defend the long term investment plan.

    It all sounds to me that they just dont have the financing in place and that they think that they can convince the court to give them more time.

  • avatar

    Remember the cow that would not die in “Me, Myself and Irene”?…

    “Today Saab applied for the court to hold an oral hearing on the reorganization matter. A small extension on the time was asked in order for all delegates to be able to make it to Sweden in time for the hearing. This was granted by the court. Foreign creditors will also be able to attend the hearing.

    On Monday, December 19th at 13:00, the district court of Vänersborg will hold an oral hearing with Victor Muller & Rachel Pang. The court has also asked for a brief submission on extending the reorganization beyond the initial three months stipulated by law.

    The basic plan to be presented to the court for Saab and Youngman is:
    – An outline of the Youngman & Saab deal
    – Funding of Saab within and after the reorganization
    – the current status of the reorganization

    The final and most crucial thing that Saab & Youngman will present is why this new deal will work when the previous ones have fail.”

  • avatar

    If anyone cares (and I’m beginning to doubt that) Lofalk today announced that he’d had enough of all the Saab Believers calling him a traitor/government stooge/GM stooge/bad man & quit. But his official reason was that he wanted someone new to judge on the new proposal that SWAN/Youngman are going to put forward in their ‘oral presentation. Either that or he just didn’t want to be part of Mullers 12 Angry Men freak show that we now have on Monday. The government have already appointed another administrator but I bet Muller is laughing his butt off this evening.
    On the 19th when he goes into court he will either win if he does his best Perry Mason and convinces the judges that this ridiculous soap opera can continue or if he loses, he can say that the new administrator was going on the biased opinions of the previous one and keep appealing and appealing well into the new year. Win/Win for Victor basically. He’s had a good week all in all, what with Youngman paying in only enough money to settle the tax bill that he would have been personally liable for.

    Lofalk has won in a way too because now he won’t be seen as the man who closed Saab if it all goes the way it should.

    The only losers are the workers, who still have not been paid (admittedly for doing nothing) despite promises that funding would be paid in today. You would have thought that if they are that cash rich they could have paid in wages at the same time they saved Victors backside. Oh well, one rule for one, one for another.

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