By on January 31, 2012

A group of 41 Saab U.S. dealers today petitioned a U.S. Bankruptcy Court to put Saab Cars North America into involuntary Chapter 11 bankruptcy protection, Automotive News [sub] reports. Last Friday, the dealers had threatened to file a Chapter 7 for involuntary liquidation, but changed their minds. Leonard Bellavia, a lawyer representing most of Saab’s U.S. dealers, explains:

“We filed a Chapter 11 just in case a white knight comes out of nowhere and buys Saab`s parent.”

Dealers are being owed money for unpaid warranty, incentive reimbursement and sundry others. Per dealer, the sums are said to range from $79.11 to $167,977.98.

The Church of St. Victor has a different version. Under the headline “Saab US Dealers Ask For Chapter 11 Protection,” they write:

“Take this as a good sign, today 41 US dealers asked a judge for Chapter 11 protection which would allow them greater involvement in a liquidation and to preserve whatever structure they can in case a bid for the entire company is accepted.”

Fellow blogsters and spinmeisters: If you ask a judge for Chapter 11 protection, then it’s YOU who is hounded by creditors and collection agencies, and it’s you who wants protection. Which would be more than plausible with a lot full of cars nobody wants.

PS: After some of the flock complain, the church changes the headline “Saab US Dealers Ask For Chapter 11 Protection” to “Saab US Dealers Ask For SCNA Chapter 11 Protection.” Not a big improvement as long as the copy stays the same.

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15 Comments on “Saab NA Chapter 11: It’s A Matter Of Perspective...”


  • avatar

    Is there even so much as a whisper around the campfire that someone, anyone might want to pick up Saab NA to get a few dealers?

    • 0 avatar
      Chocolatedeath

      Honesty they have so few dealers that that all established players really dont need the Saab locations. Maybe some smaller established players or some reentries, Alfa is one I can thinks of, Mazda might could use some new locations(but not many).

    • 0 avatar
      dejal1

      How about North Street Capital?

      I crack myself up.

      I can’t see anyone stepping in until Sweden is taken care of. To do anything else is crazy. So, you buy Saab NA. And do what with it if Saab doesn’t make it?

      Remember when http://northstreetlp.com/
      was a blank page.

      Not anymore!!!! The times, they are a-changin!!

      Also if Saab is sold, are the new owners obligated to Saab NA?

  • avatar
    Chocolatedeath

    Personally I feel pretty bad about the dealers situation. I actually like Saabs. I never got to actually see a a new 9 5 in the flesh but heard a lot of good things about them. I do like the way the cabin and exterior look. However the price tag is horrendous. The car should have been no more than 45 grand at the top and 35 at entry. I would end this quickly and have Saab liquidated as much as possible and give GM back the parts (IP) that they want. I would make sure the little guys are paid first. Believe it or not most of the large investors that they have had over the past year trying to save them have insurance against loses such as this and wont miss a dime. Part of the liquidation would consist of the dealers having to sell off the inventories that they have and not keep them for rentals. If I am paying you then you cant keep the product.
    If the US GOV had stated this with the TARP funding for the banks then we would have had less foreclosures on the market right now however it wasn’t and the banks sat on OUR monies and wouldn’t lend money nor assist with folks keeping their homes.
    I also would have it to were the buyers of the vehicles since leaving GM would be given an third party warranty of their choice. Seven years 70000 miles. This would only cost about 3 gs per vehicle.
    Its time to look after the little guy…Will this happen HELLLZ no.

    • 0 avatar
      DC Bruce

      As a Saab owner (’02) let me say first that I am disappointed at the end of the company. Although my Saab required more than its share of repairs, I have no other reasons to regret having made the purchase. I feel bad that workers and dealers who invested in the company are going to end up with peanuts. The dealer I bought my car from does not appear to be part of a regional dealer chain, so the hit falls pretty hard on them. (Other Saab dealers in metro DC are part of groups that sell other brands.)

      That said, the end of Saab illustrates one of the unpleasant, but valuable, aspects of recessions . . . they put an end to weak players in the marketplace. Fact is, Saab has been a losing proposition for many years. Sales volume has trended down since the year I bought my car. And the judgment of the market of buyers has always been that Saabs are well less than sticker price (my car was heavily discounted when I bought it). At their actual sale price, new Saabs were not paying the company’s costs; the difference had to be made up by GM. None of that had anything to do with TARP, the big evil banks, or the events of 2008 and subsequent years.

      Given that some people don’t like to bargain, it would have been an interesting experiment if Saab had lowered sticker prices to be closer to actual selling price of the cars. Would that have driven volume high enough for the company to make an overall profit? Who knows?
      Same question regarding reliability. Saab’s reliability was about the same as the European makes with which it competed: Audi, Volvo, VW, Benz, BMW. What if Saab’s reliability could have been improved to exceed those other cdompanies and match Honda or Toyota?

      Of course, we’ll never know. But the death of Saab was caused by Saab. GM, with massive problems of its own, could no longer afford to subsidize Saab. The recession only forced GM to make a decision it should have made five years earlier.

      • 0 avatar

        “But the death of Saab was caused by Saab”. Do you really think the folks in THN had control of their division, especially in the US? GM Detroit was not about to let Saab or GM Europe gain anymore than the toehold it had here. That would mean less Caddies, Buicks or whatevers sold. Remember the Caddy BLS? It could have easily been sold here, but never was cuz, among other things, would have “legitimized” a GM Euro-car offering. And in most of the GM/Saab dealerships, Saab was the “ready-made, crap, expensive-to-fix” euro-brand that was always a GM after-thought. The sales folks didnt even need the other German/Volvo brands to bash when there was a Saab sitting right over there.

        As far as reliability, remember a few years back when the first mostly GM/Saab dealer cull killed a hundred dealers or so. Amazingly, Saab went from #23 to #9 in the stats. Any car, of any brand that goes to the dealer too often/exclusively may well suffer “more than its share of repairs”. “Customer-pay” keeps dealers profitable.

        Saab was GMs only truly international brand. But GM did, and still has a problem making/marketing a “globally competitive product”. It is a shame that the Saab got thrown out with the bathwater.

      • 0 avatar
        DC Bruce

        @fred diesel -

        I’m sure the folks at THN are capable of generating no end of excuses, blame, etc. for the company’s failure. But the cold facts are that GM put a ton of money into Saab and brought their cars closer to the build and quality standard which the market expects (if you’ve ever driven or owned a pre-GM Saab and compared it with a post-GM Saab, you’ll know what I’m talking about). As a Saab owner and as one who knows a number of other Saab owners, I can confidently say that GM’s domestic products were never cross-shopped against Saabs. People cross-shopped Saabs against other European marques, especially Volvos and Audis (both of which produced a substantial number of FWD cars and also wagons) and, at somewhat lower prices VWs.

        The idea that GM wanted Saab to fail to protect its domestic product is just tinfoil hat thinking.

        My “bible” on reliability is Consumer Reports, flawed as it may be. True Delta is much better, but it’s sample size has yet to approach CR’s.

        As for personal experience, before my Saab hit 80,000 miles, I replaced motor mounts, alternator, ignition module and had no end of check engine light trips to the shop. Not only that, but the auto transmission “clunks” into gear. A transmission fluid flush eliminated the problem for a while, but now its coming back. The alternate remedy is a new transmission.

        By contrast, my Honda Pilot has required nothing but oil changes, etc. in its first 70,000 miles.

  • avatar
    windswords

    Well, if I had “a lot full of carts” I probably wouldn’t be able to sell them either since my customers would want cars and trucks. Just sayin’ :)

  • avatar
    Domestic Hearse

    My local Saab store is saying things like:

    We expect someone to come in and buy Saab soon. That means, anyone who buys one of our heavily-discounted Saabs will be getting a heck of a deal.

    And…

    While we can’t get certain parts for repairs now, we expect that function to come back online any time now. It’s just like when GM sold Saab, there were parts glitches for awhile.

    Not to mention…

    Our Saabs come with a full warranty provided by an aftermarket warranty company. They’re pretty good!

  • avatar
    mistermau

    I’d LOVE to see an article on TTAC giving advice to current Saab owners. Something like:

    “If your car is still technically under warranty, then these are your options and these are the pros and cons and this is your best case scenario and if your car is no longer under warranty but you’re relatively happy with it then this is what you can look for and if you’re REALLY lucky then xyz and if you’ve been thinking about trading it in for something new then don’t even bother because a scrap yard would give you more for it than you’d get on a dealer trade-in.”

    HHmm?

  • avatar
    Lokki

    Great idea mistermau! You should write it and submit it to the editors….

  • avatar
    gslippy

    I want what they’re smoking, if they suppose the white knight has only been sleeping for the past year and now might wake up.

    I’m curious as to how my local dealer disposed of almost all of his 30+ Saabs in a month’s time.

  • avatar
    jeff_vader

    Holy thread recovery Batman!
    The Church Of The One True Saab is claiming tonight that one of the seven bidders that receivers have on the table for what is left of the company is BMW.
    Can anyone come up with a confirmed source for this or as usual is this just another SaabsUnited “reliable source”? Like the one who guaranteed that Youngman were going to save Saab?… Or that North Street Capital were going to save Saab?… Or that the Bank Of China were going to save Saab?… Or that a major European High Street bank were going to save Saab?
    I’m guessing they just want the real estate and as usual the disciples of the One True Saab have jumped the gun.


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