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.