By on April 4, 2012

Before and after Saab had gone bankrupt, pipe-dreamers thought that the company can be revived with just a few million dollars. The number commonly used was $50 to $70 million. We maintained that it would cost a few billion dollars to get the company going again.

As it turns out, we were way too optimistic.

Saab’s unpaid bills are between SEK12-13 billion (USD1.8-2 billion) says the Wall-Street Journal. The number is based on information from the court-appointed receivers. A full accounting will be published on April 10.

The books must have been in a royal mess if it had taken until now to establish total debt with a ten percent variance.

It is no surprise that no buyer was found for Saab as a whole. The buyer would have shouldered the $2 billion in debt and would have needed another 2 billion at least to have a chance at viability.

Also on April 10 is the final deadline for bids for Saab assets. According to the Journal, “a handful of parties are interested in buying Saab Automobile’s facilities in Trollhättan, Sweden. All of them are interested in producing cars at the plant.”

 

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33 Comments on “Great Job, Victor Muller: Saab Produced $2 Billion In Unpaid Bills...”


  • avatar
    seanx37

    Wonder how much of that was owed to GM?

  • avatar
    lw

    Lots of suppliers will be eating beans and rice for a long time because of these bastards….. Wonder if anyone will go to jail over this…..

  • avatar
    johnhowington

    i saw an elusive 9-4x a few weeks ago, driven by a young female. it was silver with lots of nasty highway scum all around it, and the rear bumper had minor damage and was missing one of the small 2 inch by 8 inch reflectors. i fear she might not be able to find a replacement reflector :(

    • 0 avatar
      4LiterLexus

      Future exterior trim shortages are a major reason why buying a new 9-4x or 9-5 is such a big risk. I wonder how willing the average owner will be to scour the junkyards/forums/dealers/??? for parts that would be quite routine to replace on an average car.

      Some fans of the marque might be willing to put up with the inconvenience if it means owning a piece of history; hopefully the person you saw was one of them.

      • 0 avatar
        DC Bruce

        That’s why I’d sooner buy a 9-3 or an “old” 9-5, than either of the new cars. They will have been produced in such small numbers that it will be nearly impossible to find interior or exterior trim parts for them, or any exterior sheet metal.

        Actually, the potentially smart buy would be to acquire a used 9-3 of, say, 2009 vintage without too many miles on it. GM will honor the new car 4/48,000 mile warranty and probably should be able to get parts. I saw an ’09 9-3 Aero 6-speed manual with the 2.8 l. engine and the X-drive AWD system with about 25 k. miles on it advertised on the a dealer lot at something like $22K.

        The new cars have no warranty at all unless Saab Cars USA can figure out how to scrape up the money to back a warranty. And a new 9-5 is a complete orphan.

  • avatar
    Pch101

    To be fair, a couple of billion in debt would have been completely manageable if the company had been able to sell cars at a profit and generate cash flow.

    Virtually all industrial concerns carry debt; it wouldn’t make sense for most of them not to. Saab’s central problems were its lack of customers and a dearth of attractive products that could serve them, not with its debt. It could have used a couple of billion dollars, but that would have been for product development, not to repay the debt. As a business strategy, quirkiness may sound appealing, but in practice, it usually sucks.

  • avatar
    chicagoland

    All those nerds going ‘save SAAB’ know nothing about the business. They all own an old SAAB, how do they expect the company to make money, if they aren’t buying new ones? Stickers and key chains?

    And GM owes nothing! Many car brands have failed in the past 100 plus years, just get over it. Ignition in the console? Big frigging deal. Nothing truly special other than just “being Swedish”. GM should have just let them die off on their own in 1989.

    • 0 avatar
      Roberto Esponja

      @chicagoland:

      10000% in agreement.

    • 0 avatar
      hreardon

      +1, Chicagoland. Same thing goes for everyone clamoring for manual transmission, diesel powered station wagons. After all fifty buyers have one how will the manufacturers recoup the other $500 million it cost them to design, tool, build, ship, market and support that model?

      Brand ownership requires that the corporate parent knows exactly how to position that brand. Take Bugatti as a classic example. Volkswagen knew exactly what it was doing with it. On the flip side you have Maybach, who never was able to produce anything even mildly interesting, unique or valuable that you couldn’t get from a Merc S-Class.

  • avatar

    I dunno. Saab was never allowed to be all it could be cuz that would have upstaged GMs beloved Cadillac and Buick. And this is/was a drop in the bucket compared to Opel and Vauxhalls problems. Looking back, it looks more and more like Saab was the baby that got thrown out with the bathwater.

    • 0 avatar
      gslippy

      GM is an easy scapegoat, but Saab was in trouble before GM got them.

      • 0 avatar
        Pch101

        “Saab was in trouble before GM got them.”

        It was. But that doesn’t mean that GM did a terrific job with it, either.

        GM does an outstanding job of botching acquisitions, which is odd when you consider that GM’s history comes from a series of acquisitions and mergers. Aside from Subaru, which was able to escape, the only brand that GM hasn’t managed to destroy in recent years has been Daewoo, and that’s only because it was already dead.

      • 0 avatar
        Acd

        “GM does an outstanding job of botching acquisitions, which is odd when you consider that GM’s history comes from a series of acquisitions and mergers.”

        Keeping in mind that most of GM’s successful acquisitions and mergers took place in the teens, about a hundred years ago, so not many of the people responsible for the successful ones were around for guidance by the time they bought Saab in 1989.

    • 0 avatar
      DC Bruce

      Really? And what evidence do you have for that? Saab customers, even pre-GM, have always been VERY different from Cadillac or Buick customers.

  • avatar
    gslippy

    A coworker just traded his 9-3 for a C300. He took a beating on the Saab, but at least his M-B has a warranty.

  • avatar
    johnny ro

    The car industry was different 100 years ago. From what I read. GM buying then was not anything remotely like GM buying now.

    Then it was more like emerging social media companies now, without the billions of $.

  • avatar
    motek

    Look, I had a 1968 96 and 1985 900T. They were great cars but once the Japenese showed up there was no way SAAB could compete at BMW prices. GM did a crappy job but SAAB was already doomed with Swedish labor rates.

  • avatar
    EchoChamberJDM

    Sure the company and brand has had numerous hurdles here in the US…poor resale values, limited parts availability, spotty dealer network. But hey I just picked up a sweet 9-3 Sport Sedan for under $3k. All service records, former CPO car, leather interior, side airbags, heated seats and mirrors, and decent turbo power. What else can you get for that price? 15 year old Camrys? Assorted Intrepids and Taurus? No thanks at least I can pretend to be a member of the Swedish Intelligentsia to the 99% protesters out there who still think Saab is a super expensive luxury brand. Born from Jets and Ready to Take off Again!

    • 0 avatar
      CJinSD

      “former CPO car.” Is that in any way a better pedigree than formerly being a brand new car?

      • 0 avatar
        DaveDFW

        Saab had a great CPO program. It included a bumper-to-bumper warranty for 6 years/60k miles from the original in-service date with a zero-dollar deductible. Only a few items weren’t covered–radio, onstar, battery, tires. However, even light bulbs were covered!

        Owners of CPO cars typically got everything fixed, unlike other owners who let their cars’ inevitable problem accumulate.

        I’m sure GM lost money hand over fist on the the Saab CPO program. I confess to buying a CPO Saab long ago, and can guarantee that no problem was too minor for me to demand a free repair.

      • 0 avatar
        Marko

        What year and mileage?

    • 0 avatar
      EchoChamberJDM

      Marko – its a 2003, current gen. 145k miles. I would not have bought it until Victor Muller was out, he raped and pillaged what little was left of Saab for his own personal gain, not to mention the $500 million loan he got from the Swedish Investment Bank. Where is the outrage in the streets of Sweeden? Is he going to give back his multi million dollar paycheck? All the morons over at Saabs United think Victor Muller is the second coming, however those who see past the slick talking chalatan realize he couldn’t even run the local 7-11 let along a major automobile company.

      Yeah, I know everyone tries to shift the blame to GM. However they were wise to cut their losses and try to shut the whole thing down. I dont blame them either for not wanting to hand over any of technology developed from the millions in development costs for the 9-3 and new 9-5 being handed over to the Chinese scott free. Let them (Yougman and the Chinese bidders) spend 5 years and nearly $500 million developing a new platform like every other automaker out there. GM may be mismanaged but at least the logic light bulbs finally went off somewhere.

  • avatar
    forraymond

    I would imagine that Mr Mueller was misled before buying Saab. I just don’t trust those in charge at GM, now or then.

  • avatar
    jimbobjoe

    I’m not given the impression that this was unknown. I remember Saabs United posts saying that Saab had $2 billion in various long term debts.

    Under normal circumstances that is a manageable amount of debt for a company its size. The problem wasn’t debt, it was liquidity: Saab had a liquidity crisis just as European credit markets panicked over other problems.

    Look at it this way, if the average Saab were $30k, then $2 billion is about 66,000 cars worth, or, alternatively, about a year’s worth of production with reasonable goals. A lot of successful companies have long term debts that far exceed a year’s worth of production.

  • avatar
    Omnifan

    I’m sure that Mr. Muller paid himself first and IN FULL :)

    • 0 avatar
      jeff_vader

      Funny you should mention that…
      The Swedish media is reporting that Spyker are suddenly 14 million euros in profit. The reason that a car company that only seems to have produced about 50 cars in its life and according to Mullers “close personal friend” Mr Antonov hasn’t actually delivered a car in over a year is now making money is that these reports are saying that Muller buried Spykers debt into Saab GB.
      So Muller walks out of the Saab/SWAN/Spyker debacle with his original company now debt free and in a better state than when he went in.
      Really??? I wonder why no one saw that one coming?

  • avatar
    aristurtle

    Um, yes? Of course they had unpaid bills. They went bankrupt. That’s what bankruptcy is!

  • avatar

    SAAB could not survive no matter what. First it never was a luxury brand to justify premium price. SAAB with its limited appeal and volumes could survive only if it was making rebadged Opel. But SAAB engineers kept ignoring this fact and trying to re-engineer what ever GM was offering them. There is nothing wrong about it but at volumes it sold and labor cost there was simply no way to make any profit these way. SAAB was insolvent for decades.

  • avatar
    binkje

    3 former Saab board members arrested for tax evasion. All over the news in Sweden. What a surprise…


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