It’s been a looooong wait and lots of nail biting for Saab employees and Saab enthusiasts around the world, but GM and Spyker have reached a preliminary agreement on a Saab sale. The deal includes amongst other things the rights to the Saab brand of course, the Trollhättan production facilities (which was important to Spyker – more on that in a bit), the rights to produce and sell the existing 9-3’s, the new 9-5 and 9-4x models. Former Saab CEO Jan-Åke Jonsson, who was let go when the liqudation of Saab started, will be reinstated as CEO. He, and Spykers CEO Victor Muller have been named the heroes of this deal – Jonsson for his endurance and stamina “He didn’t walk out the back-door as liquidation started – instead he started nightly negotiations, writes Aftonbladet.se in a tribute to Jonssons’ role. And Spyker’s Muller’s charm and persistence have also been mentioned as a crucial part in securing Saab from GM. (Read More…)
Bård Eker has given an open-hearted interview to Norwegian newspaper Aftenposten, referred here at e24.no telling his version on the failed Saab-deal. Eker was one of the investors in the Koenigsegg Group’s bid for Saab, through his company, Eker Group – 49% owner of Koenigsegg Automotive. Here is his hindsight on the deal:
“General Motors made it very hard to buy Saab”, he says. “Saab wasn’t structured as a subordinate, it was completely swallowed into the massive GM body. And while you can remove a lung from a body, you can’t remove all the veins. And GM had not done the required separating job prior to starting negotiations with interested buyers. That was a contributing cause why things took longer time for us too”.
Responding to calls by Volvo’s unions for an investigation of Geely, Volvo management is calling the unions’ statements “almost xenophobic.” CEO Stephen Odell, and Personell Manager Björn Sällström of Volvo Cars have sent out letter to their empolyees, urging to modify their attitude towards their potential new employer, Geely. The letter is a response, not only to the unions’ public demand for a Geely investigation, but also the fact that these statements have sparked quite an anti-Chinese-business-methods campaign in readers’ letters to Swedish medias. (Read More…)
Corresponding with news that Ford and Geely are close to closing the Volvo deal, Volvo’s unions have expressed skepticism towards Geely, even going so far as to ask that the company be investigated. An ownership company based in tax havens, a history of trademark theft, and minimal transparancy have all worried unions within Volvo. Swedish Engineers at Volvo and the Metalworkers have expressed worries over the lack of information regarding Volvo’s future within Geely. “There’s a great information vacuum” says Magnus Sundemo of the Engineers. “We know very little about what the consequences will be if or when Geely takes over Volvo – We need to have more information, and we need reasonable time to examine the information” he continues.
As posted earlier, the American based Crown Consortium finally made an offer, said to be on par with Geely’s, perhaps calculating that Ford will prefer an American buyer to the Chinese. According to Swedish business site di.se Roger Holtback of Crown confirmed to tt.se [sub] that the Crown Consortium has made an offer on Volvo. Geely still has the edge, though: according to Ford Spokesman John Gardiner to Wall Street Journal, Geely is still the “preferred bidder.” But that doesn’t mean it’s exclusive.
Bård Eker, the Norwegian partner in Koenigsegg Automotive, and Koenigsegg Group, appeared as one of the guests on Friday night’s regular Swedish/Norwegian talk show “Skavland” this weekend (the following, translated conversation starts at 27:09). Mr Skavland, first talking a bit about Eker’s feelings about the broken deal, and how he felt visiting Trollhättan talking to Saab employees after the deal broke, he then asked Eker: “Is there a tiny chance you’ll try again? Saab isn’t sold yet…!” Eker smiles and answers “…we’ll see. Maybe!” laughing, shrugging his shoulders, audience cheering. Skavland: “how would you wanna do it?” Eker: “I don’t know…Seriously – we haven’t given it much thought. We’ll see…perhaps there’s a new opportunity. Maybe someone’ll give us a phonecall” Skavland: “So it’s not definitive that you’re out of the game?” Eker – laughing, glancing at his watch – “..err..how long is this show?” Skavland says: “So, you’ll still want a Saab?”, Eker: “yeah, sure” Skavland: “Alright….?” and shifts to another subject. All the while Eker has a cunning smile on his face.
A few days ago I captured some news from Swedish Aftonbladet.se that Beijing Auto (BAIC) is buying Saab’s now to be replaced 9-5 technology. Even though the Koenigsegg-Saab deal fell apart, and BAIC were a part of the investor group, the Chinese has not given up the idea to build Saabs in China. At the time I couldn’t find any other reports on this, and wondered wether Aftonbladet had done some creative journalism, but yesterday, Nyteknik.se reported the same news, citing their own sources. They’ve even confronted Saab’s spokesperson Gunilla Gustavs, but of course she can not, will not comment on that.
GM decided to grant Saab 30 days worth of life support to await new potential buyers. If no buyer is found within 30 days, then Saab is a goner. That’s the message all Saab workers and enthusiasts were given yesterday, to a certain relief. GM and Saab have confirmed there are potential buyers out there, but who are they? Who’s in, who’s out?
It’s the day after the Saab-bomb exploded in Sweden, and the media are pouring all over it. Of course, all kinds of “car experts” and “auto analysts” are having their say. Saab workers are expectedly sad and disappointed. And everybody’s blaming everybody and anybody. The unions blame the government, the government blames Koenigsegg, Koenigsegg Group are blaming time and bureaucracy, and the public is generally pretty pissed off with GM. And it all seemed to have come as julekvelden på kjerringa. But what on earth happened? Who pulled the plug? Who said enough is enough? And why now, all of a sudden? The EIB loan was allegedly just around the corner. Will anyone else buy Saab? What about the Swedish government? GM? Does anybody even care? Well, the 500 or so who bought a new Saab in October care – what about their warranties?
For weeks now, the only realistic bid for Volvo has has come from the Chinese automaker Geely. They’ve been Fords’ “preferred bidder” for about a month ago, and last week, Geely’s management were in meetings with Volvo’s unions, and with Volvo AB (commercial vehicle company) about the Volvo trademarks – which are owned 50/50 between Ford and Volvo AB. At the same time time, Ford seemes to be in no hurry to sell Volvo, leading many to speculate that Ford was dragging their feet waiting for new and improved offers. We’ve been posting about the two other possible bidders, Consortiums Jakob and Crown earlier, and reports in Swedish media today say that Crown are now ready to make an offer, to be presented this week.
Looks like GM may have done some creative accounting after all – at least according to Swedish Government and their consulting firm KPMG. As we’ve reported the last couple of days, Saab’s rescue has been hanging by a thread due to questions around the company’s financial situation prior to the start of the financial crisis. Saab needs the EU to approve the Swedish Government’s guarantee of an EIB loan to Koenigsegg group if the deal is going to go through. If Saab, during the summer of 2008 – when the financial crisis started – were not in sound financial condition, the EU cannot, will not, approve Swedish government’s guarantees to the EIB loan, and the loan will not be granted. And reports from di.se yesterday almost laid that possibility to rest, with reports that GM had lost $ 5.100,- on each Saab-car sold during the last 8 years. Now, as commentator dlfcohn and others at ttac, as well as several commentators at di.se have pointed out, creative accounting can be useful in major corporates i.e to avoid taxes in tax-heavy countries. This, apparently (at least according to Swed.gov’t/KPMG) was the case with GM/Saab. (Read More…)
Swedish business site di.se has done some numbercrunching, and figured out that GM has lost SEK 35,000,- (eq aprox $ 5,100, at the current exchange rate) on each Saab sold the last 8 years. As many of TTAC’s readers have pointed out in various comments, GM never made money on Saab. Truth is; they lost a total of SEK 39 billion (3.9 billion Euros) during their ownership, according to di.se’s analysis . The last 8 years has been heavy; a loss of SEK 32,2 billion, or 35.000,- kronor on each Saab sold. That’s $ 5.100,- on each car. This year alone GM has had to take an SEK 6.2 billion cost on the ailing carmaker, SEK 5.2 of those are amortization of debts. This is why it’s crucial for Koenigsegg Group that the EU commission rules that Swedish government’s guarantees on Koenigsegg’s loan from the EIB are not subsidies. But since Saab has been on life support for so long, it would be almost impossible to defend Saab as a healthy company, and without the Swedish government’s guarantee, the financial plan from Koenigsegg Group will fail. Maybe they can argue that when it comes to Saab, there are no subsidies, just business as usual.
Saab has not had an easy path to salvation. The Koenigsegg Group has had to provide finances, agree to a price and conditions with GM, get loan from European Investment Bank (EIB),and coax the Swedish Government into guaranteeing loans. Now there’s one more hurdle left, and it’s the same challenge that scuppered the Opel to Magna deal: The EU.
Reports of recent weeks in the Scandinavian media have told us that the EU is thinking the Saab deal over. And when mighty EU thinks, things take time… So, what are they thinking about? They have to decide whether Swedish Govt’s guarantees to SAAB’s loan in the European Investment Bank should be considered subsidies or not. EU countries are not allowed to subsidize unprofitable companies – and the EU has some questions on SAAB’s and Koenigsegg Groups financial plan, and Saab’s results prior to the reconstruction. So the whole thing might stretch into next year until – or if at all – the deal is closed. Incidentally, questions about the anti-competitive nature of the German government’s support of the Opel to Magna deal killed that sale already. But does GM want Saab back as badly?
Reports in the Swedish media have Consortium Jakob AB still in the running to snatch Volvo from Geely. But hiring investment bank Morgan Stanley as collaborators must have spooked Geely — FoMoCo’s “preferred bidder” — and the Chinese automaker has upped the ante with some grand plans for Volvo. Geely is promising to sell no fewer than 1 million Volvos annually within four/five years.
Swedish daily Dagens Industri claims to have their hands on Koenigsegg Group’s secret market-plan for Saab. The one they used to secure a 600 million Euro loan from European Investment Bank. And they are aiming…upmarket! The ultimate goal is, by 2016, to establish a true luxury brand, and by then have such exclusive and expensive cars that an annual sale of 65.000 cars will suffice (by doubling the average prices).