The Truth About Cars » Youngman The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Wed, 23 Jul 2014 18:25:17 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Youngman Detroit Electric Rides Again Thu, 04 Apr 2013 19:18:57 +0000

Detroit Electric is a startup electric car maker that revives the brand of another startup electric car maker by the name of Detroit Electric. As chronicled by Ronnie Schreiber, Detroit Electric cars were produced by the Anderson Carriage company from 1907 to 1939. They sold thousands of them until they were displaced by a better idea, the internal combustion engine. Yesterday, the new Detroit Electric unveiled its first model, a $135,000, battery-powered sports car.

As reported by Reuters, the Detroit Electric SP:01 is “the world’s fastest pure-electric sports car,” with  a range of  “just under 190 miles” between charges.

The car will be built in the Detroit area at a dedicated plant with an annual capacity of 2,500, the company told Reuters.

According to the report, “the SP:01 appears to borrow heavily from the British-built Lotus Elise — no surprise considering a number of Detroit Electric executives previously worked for various affiliates of Lotus Cars.”

There is another Lotus connection: The brand was revived in 2007 as a joint venture between China’s Youngman and California’s Zap. Youngman also is the Chinese joint venture partner of Lotus, a marriage that produced bastard children, some of them depicted above. Youngman achieved notoriety as an incessant bidder for Saab, a courtship that ended in failure.

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Return Of The Zombies: Spyker, Youngman, Phoenix Mon, 27 Aug 2012 13:39:05 +0000


Victor Muller managed to sell out to China after all. Today it was announced (full press release here) that Muller’s Spyker and former Saab suitor Youngman will form two companies. Spyker calls them “joint ventures,” but they look more like companies owned mostly by Youngman, with Spyker holding a token share.

The first company is called Spyker P2P.  It will make the Spyker D8 luxury SUV (caught above by Carnewschina.) Spyker contributes the technology and the Spyker trademarks for a 25 percent share of Spyker P2P. Youngman will make a €25 million cash contribution (over time) for 75 percent of the shares. “P2P” does not stand for “pay to play” as you may assume, but for “Peking-to-Paris,” another moniker for the Spyker D8. The car is supposed to see the light in 2014, but with only 25 million in funding, it will need more money, a lot more.

The second and more interesting company is called Spyker Phoenix. According to the press release, “Youngman will contribute the rights to the Phoenix platform as developed by Saab Automobile AB in 2010/2011 to which Youngman acquired a license in 2011 as well as provide all required funding.”  Youngman will hold 80 percent, Spyker will hold 20. The company “shall develop and manufacture a new full range of premium car models based on the Phoenix platform which models will be positioned higher than the comparable Saab models were. Spyker Phoenix products may be manufactured in Europe and China as the case may be.”

In addition, Youngman will invest €10 million into Spyker itself.  €6.7 million buy 29.9 percent of  Spyker  (and hence another 6 percent of  the Phoenix company and another 7.5 percent of the P2P deal,) €3.3 million will come as a shareholder loan.

How did Youngman end up with Phoenix after their advances to buy the assets of bankrupt Saab were rebuffed?  Before Saab finally went bankrupt, the rights to the Phoenix platform were transferred to a Spyker-controlled special purpose vehicle, and used as collateral for a loan from Youngman that was never paid in full. When Saab went belly-up, I wrote

“I wouldn’t be surprised if a license for the PhoeniX platform won’t suddenly show up at Youngman, pledged as security for some of the money that had been paid. Then, GM will say that Phoenix IP is mostly theirs, and there will be a protracted and messy lawsuit.”

The first part of that prediction came true today. For the second part, we probably will have to wait a while, most likely until the first Phoenix cars are built, if they ever will.

Youngman will need government approval for the investment in a foreign company, and either foreign company will need government approval for joint venture production in China.


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Hot Off The Presses: Youngman Might Also Sue GM Over Saab Tue, 07 Aug 2012 19:46:49 +0000

Bringing suit against GM for not letting Saab live another day could be turning into a popular sport. Lars Holmqvist, former head of Europe’s automotive supplier body CLEPA, and as such an insider when it comes to the latest Saab dirt, says that spurned Youngman of China is also thinking of suing GM.

Yesterday, Victor Muller made headlines and invigorated the dwindling and already slightly despondent fan-base by filing a $3 billion lawsuit against GM for tortuous interference. Muller might be joined by Rachel Pang of Youngman, Holmqvist told just-auto.:

“Youngman is also thinking about suing GM. I know that. They have not made up their minds and, of course, they would be encouraged by Victor Muller’s lawsuit. I have information. I know from people…they are looking into the possibility. It is obvious because they spent SEK550m…securing the rights to the new platform.”

550 million Swedish Crowns is $82 million, and knowing the Chinese they absolutely HATE to see money spent for nothing.

Muller is using someone else’s money for the lawsuit, the identity is kept a secret. Holmqvist seems to know the financier, but he is not talking. What Holmqvist says is that the moneyman is not embattled Russian banker Antonov:

“It is not Antonov. Muller would not be stupid enough to trace anything back to Antonov. The whole Antonov story is finished.”

Holmqvist suggest not to take the legal maneuvering lightly, and he reminds us the Muller is smart and a lawyer. Granted, Muller definitely is a better lawyer than carmaker, but in the words on one of my former Manhattan lawyers who’s name is kept undisclosed to prevent him from being disbarred:

“Bertel, half of the lawyers lose.”



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Turkey’s Brightwell Holdings May Be Saab Suitor Fri, 20 Jan 2012 18:32:34 +0000

Could Saab end up in Turkish hands? According to Bloomberg, Turkish private equity firm Brightwell Holdings will bid for the remnants of Saab, with a view to producing cars again.

Brightwell board member Zamier Ahmen told Bloomberg “We will make a bid very shortly, there’s no question,” but the company is still doing its due diligence. The aim appears to be a restart of production at Saab’s Swedish facilities, and a revival of Saab’s automobile lineup. Any deal must be approved by GM, the Swedish government and the European Investment Bank. As far as Islamic countries go (well, sort of – Turkey is officially a secular country), we’d take a new 9-5 over one of the Iranian Peugeot clones, but there will no doubt be many dissenting views in the comments.

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The Saabstermath: The Picking Of The Carcass Begins Tue, 20 Dec 2011 13:32:54 +0000

After delegations of Pangda and Youngman had travelled to Trollhättan to inspect the factory, one returning Chinese traveler mentioned to a contact of mine that the factory is great, but it’s in the wrong place. In Sweden, workers would earn way too much and go home early, contrary to the Chinese worker, who would have a much higher work ethic for less money, the traveler opined. If all goes well (for the Chinese,) the Trollhättan factory will come to China. Usually well informed Sveriges Radio reports that Youngman is interested in buying the Saab assets in a bankruptcy sale.

Updated with Victor Muller’s press conference.

This interest has been confirmed by Hans Bergqvist, one of the bankruptcy administrators assigned to the case. What Youngman would be buying is a factory, free of obligations, but also free of any technology licenses and without the Saab name. According to Sveriges Radio, Youngman thinks that the current 9-3 does not need a nod from GM.

A Turkish company also appears to be interested. The Turkish embassy in Stockholm has established contact.

UPDATE: Victor Muller’s press conference can be seen below (courtesy: Saabs United)

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Our Daily Saab: Lurid Crime Stories And An Unwelcome Bank Wire Sat, 10 Dec 2011 15:40:02 +0000

Actually, we shouldn’t even mention Saab before the court in Vänersborg renders its verdict on Dec 16. The court will decide whether it follows the suggestion of the court appointed administrator Guy Lofalk to lift the creditors protection on Saab.  But it’s a slow newsday, and Saab is always good for a story.  No, we don’t mean the €3,322,993.13 allegedly transferred by Youngman. No, we are not referring to the latest round of hamfisted censorship at Saab’s enthusiast site. We are talking about a story that is making the rounds on websites that specialize on the activities of the Russian mob. They insist that Saab’s darling Antonov “has been involved in a number of financial scams before.” The mobster tracking site Rumafia says:

A few years ago Antonov moved almost all Snoras’ liquid assets, $400-500 million worth, to foreign accounts. He disguised the fraud under a series of loans which the bank allocated to front companies with no real asset backing.”

Hmmm. No real asset backing?

The same site also alleges that the money to buy Saab from GM came trough dubious channels under hair-raising circumstances. Let’s join the story right after Antonov’s father was gunned down in Moscow:

“Alexander Antonov who received five bullets, remained the invalid. They were not going to come back to Russia any more, therefore they asked the chairman of board of “Investbank” Maxim Skachko and his assistant Igor Dubina to transfer abroad $400 million. Money transaction was carried out under the pretext of delivery of credits to various structures and without approval of board of directors of the bank. According to the Ministry of Internal Affairs of the Russian Federation, $200 million from this sum went on acquisition of motorcar giant Saab. Officially firm Spykers Cars became its buyer, 30 which % of actions belong to Antonovym.”

We don’t know whether these stories are true, but they are out there. Follow the links above, or peruse Google for a healthy dose of crime stories. We only quoted the tamer stuff to keep it SFW in case you are working over the weekend.

Now for the €3.3 million. Saabsunited today proudly presents a scan of a wire transfer instruction, in which Youngman tells its bank to wire €3,322,993.13 to Swedish Automobile Coöperatief  in Zeewolde, The Netherlands, via the Rabobank, SWIFT RABONL2U. The Coöperatief is the Special Purpose Vehicle that had been set up in September to put the unfinished  PhoeniX platform in hock. Back when, we wrote:

“Judging from the oblique language of the press release, this whole sale and licensing business is nothing else than a security for a loan that will probably be coming from Youngman.“

Administrator Guy Lofalk is taking the same position and reported to the court in Vänersborg that

Saab Automobile AB incurred new obligations during the reorganization, in violation of the instructions given and the provisions of Chapter 2, § 15 Act on corporate restructuring.”

That’s a big no-no under Swedish law. Can’t be protected from creditors and pile on new debt. Saabsunited quickly defends the accused:

This payment is part of a technology purchase made by Youngman Automotive Group from Saab Automobile which should help to pay salaries for the month of November. This technology purchase contract singled back in september. Of course this money is not enough to pay the complete salaries once it arrives at Saab’s accounts but it is one step on the way.”

How an innocent enthusiast website comes into possession of a wire transfer copy which usually is sent from accountant to accountant only to show that the funds are on their way remained anybody’s guess – - – until  Saabsunited Chief TimR proudly wrote:

 “It was sent from Martyn Shilte, CEO Spyker China to Guy Lofalk with a cc to people such as Rachel Pang and Kristian Geers at 10:30 on the 9th of december. I have seen the original e-mail with the original attachment!”

Consider TTAC in awe. We have never been on the CC: when wire transfers between international auto giants were confirmed. A superb piece of investigative reporting.

Sending the document to Guy Lofalk however was not smart. On the same day, Guy Lofalk asked the court to throw the book at Saab. With that, we’ll bid adieu from Saab until Dec. 16 (unless something interesting pops up).

PS: Advice from someone who routinely sends and receives bank wires in China: The wire instruction is worthless. You want to see the actual confirmation by the bank that the money was actually sent. As exhaustively discussed here, transferring money from China requires a certain amount of really red tape and extra documentation.

PPS: Due to the untimely passing of the page in question, we provide a link to the original document for the convenience of our readers. (Just in case the picture will be completely exorcised from SU’s computer, hat tip to Gruhm.) According to the metadata, the scan was taken retouched on 12/10/2011 at 10:24 AM with Photoshop CS4 Macintosh.  As for the original webpage,  unless a reader has a copy, it’s gone. Even the Waybackmachine has given up on Saab  - -  last picture taken on July 15th 2011. Before, the archiving robot visited The Church Of The True Saab twice monthly. Advice from a dinosaur automotive propaganda operative: Crisis PR is a subtle art which is better left in the hands of trained professionals.

PPPS: I appears as if TTAC has picked up a good number of former (disappointed? disillusioned? shunned? banned?) Saabsunited readers. Make yourself at home.

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Our Daily Saab: Saabinistas Turn Submissive, Beg GM For Mercy Sun, 04 Dec 2011 11:15:01 +0000

The Church of The True Saab reports rather breathlessly that a YADTFSS (yet another deal to finally save Saab) has been found. The organ that prides itself to have knowledge of insider information (which it usually never releases) relies on Sweden’s TTELA, which says (translation courtesy Church of The True Saab : )

“According to information available to TTELA, after long negotiations in Stockholm, an ownership structure has now been found for Saab, hope is that it will be approved on all levels, even GM.

The structure has been signed by Victor Muller and is developed with the chinese partner Youngman. Exactly how the suggestion looks is unclear, but Youngman seems to have backed down from its previous desire to take a majority part in Saab. It is not unlikely that Youngmans part is now below 20% to agree to the terms set by General Motors.”

The Swedish wire service thinks Pangda is not part of the deal. As indicated here several times, Pangda has its own problems in China and has told our sources in China that they are growing tired of the whole Saab story. Says TTELA:

“Pang Da has not been present at the negotiations in Stockholm during these last few days. This new deal is likely Saabs only way of avoiding bankruptcy. The papers were sent over to GM yesterday and right now, the tension is high as to what the reaction might be in Detroit.”

The trouble is that GM already voiced its opinion last week. Marketwatch wrote a few days ago:

“General Motors Co. said Wednesday it remains skeptical about a Chinese rescue plan for Saab Automobile even as one potential Chinese investor said taking control of the troubled Swedish car maker isn’t its main goal.

GM, which owns the technology on which several Saab models are based, doesn’t believe that a Chinese takeover of Saab would be in the best interest of its shareholders given it is a major player in its own right in the Chinese car market. The Swedish auto maker, currently owned by Swedish Automobile NV , has been operating under creditor protection since September.

“GM has not changed its position,” spokesman James Cain told Dow Jones Newswires.”

It becomes rather old that these new deals always come up when Saab is about to go bankrupt. Salaries have not been paid. A check from Youngman is supposedly in the hands of the chronically unreliable Chinese mail. The unions are ready to request bankruptcy this coming week.

And what is the The Church of The True Saab doing to help the matter? It asks for another onslaught on GM’s facebook page. This time, a polite one:

“As if you didn’t figure out by now, this would be the appropriate time to politely lobby GM to please approve this deal (or at least counter with an acceptable revision). Not that anyone needed reminding, their Facebook wall has been flooded for weeks.

You know where to go.

And on cue, the occupiers of GM’s facebook page changed their chant.

They are still spamming the site. Only the harsh “Let Saab go!” changed to “Please let Saab go!”



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Our Daily Saab: Hold On And Believe Tue, 22 Nov 2011 16:23:45 +0000

The last attempt at saving Saab failed when GM said it would not supply or license technology to Saab if it were 100% owned by PangDa and Youngman, scuttling the Chinese firms’ bid for outright control of the company. Now the two firms have sent a revised proposal to The General in hopes that they can provide safeguards for intellectual property, allowing them to purchase Saab without losing the link to GM. After all, both the 9-3 and 9-5 rely on GM technology and parts, while the 9-4X is wholly supplied by GM. Rachel Pang of PangDa tells

We have not discussed any changes with regard to ownership structure. We are concentrated on the GM issue… It’s about more commercial terms.  We want to meet them and have asked for a meeting. First we must give them time to review our proposal. We are waiting for GM’s response and then we will of course respect it.

Of course, our understanding is that “the GM issue” is the same as the ownership structure issue… and keep in mind, PangDa and Youngman are looking for a meeting, not an agreement from GM. Which means this could drag on a while… and wouldn’t you know it, it’s time for Saab to pay salaries again.

Victor Muller, who TTELA says “has increasingly fallen into the background” of negotiations, agrees that it could be a while, noting

GM will first need to digest the information gained from Saab. It is up to Youngman and Pang Da which they want to conduct the negotiations with GM

And while PangDa/Youngman are waiting to hear back from the RenCen, they’ve got to keep the cash flowing. Apparently Youngman injected some $3m into Saab this week, and PangDa could help out with wages, which must be paid at the end of this week. Which raises an interesting question: why are PangDa and Youngman continuing to inject cash into a company they may never be able to own? Surely not because GM has sent promising signals, as its last message was

We have not changed our point of view. We are not negotiating with the Chinese since our contracts are with Saab

When asked about this puzzling state of affairs, Rachel Pang gave an answer that definitely gains something in  the Google Translation

TT: Why do you continue to invest in Saab when you do not know if you can buy the company?

- A good question. I do not know what I should be on it at the moment, says Rachel Pang. (Original: En bra fråga. Jag vet inte vad jag ska vara på den i nuläget, säger Rachel Pang.)

I’m sure Ms Pang’s answer must have been more reasonable than this appears, but then, every time I dig back into the Saab story, I tend to not know what I should be on at that moment. A stiff drink? Painkillers? Some kind of exotic hallucinogen, synthesized from the pancreas of Amazonian salamanders? What could possibly make me understand the point of all this burning capital? At this point, I’m almost considering tucking into the barbiturate overdose-in-applesauce that Guy Lofalk is keeping warm for Saab.  This story is a killer.

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GM Issues Death Sentence To Saab Deal With China Fri, 04 Nov 2011 15:49:47 +0000

While the flagwavers at Saabsunited wallow in the good news that the Swedish king announced at an annual moose hunt near Trollhättan that Victor Muller is a great guy, far away in Detroit, GM spokesman Jim Cain issued to Reuters what sounds like the death sentence to the sale of Saab to China’s Youngman and Pangda:

“GM would not be able to support a change in the ownership of Saab which could negatively impact GM’s existing relationships in China or otherwise adversely affect GM’s interests worldwide.”

The exactly same statement was sent to the Wall Street Journal, and GM will send it to anyone who asks what GM thinks of the deal. If Muller would have asked before announcing the sale, he most likely would have received the same answer.


In Shanghai, GM has a joint venture with China’s largest car company SAIC. A lot of the technology that is in current and future Saabs is in current and future Chevys and Buicks made by GM’s joint venture with SAIC. It is a good guess that GM’s existing relationships with SAIC could be negatively impacted if SAIC has to pay a lot in licensing fees for that technology, and suddenly a car dealer and a small busmaker from the middle of nowhere gets it for chump change. I can imagine that SAIC is adversely affected, make that mad as hell because of this. And if you are GM, you don’t want your partner in your most important market to be mad as hell. The Chinese media is already full of opinion pieces about SAIC’s unhappiness with the deal. These pieces don’t get written by themselves, they usually receive some encouragement.

GM sold 2.3 million cars in China last year, more than back home in the U.S. About a third of GM’s global sales are in China, with the trend going up. Without China, GM would be dead. GM depends on China and GM won’t jeopardize its future to help a small busmaker in China and a neardead Saab in Sweden. GM is happy to be rid of Saab. They don’t need that aggravation again. If I would be GM, I would do nothing, and Jim Cain just announced that GM will do just that.

The sale of Saab needs the go-ahead of GM. Any technology transfer needs a lot of go-aheads by GM. The Chinese want technology, free and clear. No technology, no deal.

Yesterday, Sverigesradio tracked me down in Japan and I had told them the above – minus the Jim Cain assessment which is just in. If  they will ever send the interview, it will be old hat, and Saab’s moose will be cooked.

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Our Daily Saab: Saab Lives Another Day, Waits For Chinese Money Mon, 31 Oct 2011 12:38:33 +0000


Today, Saab creditors met in a packed-beyond capacity courtroom on Vänersborg. After a short deliberation, the district court approved the reorganization plan, Göteborg’s Posten reports. It will cost 500 jobs in Trollhättan. On Friday, China’s Youngman and Pangda had agreed to take over Saab 100 percent – in a Memorandum of Understanding, which isn’t worth much, and which is littered with caveats.

The reorganization plan, (full text here), was feted in a lengthy press release. It starts like this:

“Pending the approval from all relevant parties, short- and long-term funding for Saab Automobile is assured: Youngman and Pang Da have expressed their commitment to provide EUR 50 million, to fund Saab Automobile while in reorganization. In addition, the Chinese investors will provide a minimum of EUR 600 million in funding to restart production, to settle the company’s clear and due debts and to fund operations for the 2012-2013 medium-term timeframe. To provide funding for the revised business plan and provide long-term financial stability the new Chinese owners have also budgeted funding for the planned expansion of Saab Automobile’s portfolio and additional operations to be set up in China.“

And then it continues:

“Saab Automobile has not received the funds from Pang Da and Youngman that have been committed for today.”

Sound familiar?

Sweden’s Aftonbladet figures that the suppliers alone are owed some $230 million. There is a $300 million EIB loan. $328 million in preferreds are due to GM in 2016. The cost of developing a new platform is in the neighborhood of a billion dollars.

Neither Pangda nor Youngman have anywhere near that money sitting around in their bank accounts. They are dependent on investors, banks, governments. China has tightened the purse strings on its banks, creating what is called a “shadow banking system”, a giant below the table loansharking operation, which many, including the Wall Street Journal, expect to explode any minute. China’s car market is growing in the low single digits, while expensive capacity expansion projects are underway. As far as car producers go, Youngman is at the bottom of the long Chinese food chain.

The reorganization plan expects continuing losses through the 2013. It sees Saab return to profitability in 2014 on sales of around  200,000 units annually. Hope springs eternal.



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Our Daily Saab: Lofalk To Request Mercy Killing, Saab To Request Lofalk’s Ouster Thu, 20 Oct 2011 16:23:54 +0000

Guy Lofalk, the administrator of Saab’s reorganization, will ask the court in Vänersborg to terminate the reorganization process. Before, Saab expressed “doubts that the bridge funding of Youngman and Pang Da, of which a partial payment has been received, shall be paid in full on 22 October 2011.” Finally something we can agree on.

What happens if the court accepts Lofalk’s recommendation? Stockholm News explains it:

“If the voluntary reorganization will be terminated is determined by Vänersborg District Court. It would mean that the resting bankruptcy claims against the company comes back into force.
The Swedish Enforcement Authority would also resume its recovery of the about SEK 1.4 billion of debts that Saab owes suppliers.”

In other words: The end.

Lofalk doesn’t seem to be impressed by the last ditch offer from U.S. private-equity firm North Street Capital. It probably has something to do with the fact that the loan would be partially collateralized by assets other creditors might want to get their hands on. Interviewed by Reuters, Lofalk said the $70 million promised by North Street Capital on Thursday for Saab would be far from enough to continue reorganization – if it ever arrives:

“The money is not enough to continue the reorganization. Now, an application to terminate the reorganization has been mailed. It should be on the court’s desk tomorrow.”

Lofalk added that the $70 million promised by North Street Capital on Thursday for Saab was far from enough to continue reorganization.

Lofalk also has written-off Youngman and Pangda as saviors:

“I can just say that the parties didn’t manage to reach an agreement on a sale.”

According to the Wall Street Journal, Saab will contest Lofalk’s application and request that the reorganization continues. Saab will also ask the court to give the heave-ho to Lofalk, and to appoint a new administrator. That’s a lot to ask for. As a court-appointed administrator, Lofalk works for the court and for the creditors, he doesn’t work for Victor Muller.  The Vänersborg court had doubted the viability of the reconstruction in the first place and was overturned on appeal. What’s “I told you so” in Swedish?

The reaction in Swedish media – openly or between the lines – is that Lofalk wants to sell Saab lock, stock and barrel to the Chinese. He praised Youngman and Pangda, and implicitly blamed Muller for the failed negotiations. He wants Muller out  – apparently also because the Chinese want full control.

In an interview with The New York Times, Victor Muller echoed that suspicion:

“Mr. Lofalk  is completely focused on an ownership change. He wants to force Swedish Automobile to sell Saab.”

How would you decide as a Swedish judge?

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Our Daily Saab: Egg In The Face Sat, 08 Oct 2011 16:31:37 +0000

In a statement issued late Friday, China’s Geely poured cold water over rumors that it is interested in Saab, but confirmed that there was a meeting – because they wanted to be nice. There is another version that says that Sweden’s Finance Minister caused Geely’s Li Shu Fu a massive loss of face, whereupon he took his balls and went home.

“Geely agreed to meet with the relevant party and listened to their pitch out of politeness to Saab’s restructuring team. It was that restructuring team that first contacted Geely through a third party, and they did so hoping that Geely could help with Saab’s restructuring. Geely has no intention to get involved in the restructuring plans of SAAB.” Geely said its executives took the meeting  after they had been first contacted through an unnamed third party.

Sweden’s Aftonbladet has a less polite version: The Swedish paper writes today that yesterday, Friday,  at 3pm, Geely’s chairman Li Shu Fu hat a meeting scheduled with Finance Minister Anders Borg at the Finance Ministry in Stockholm. Li Shu Fu was ready to make a down-payment of €50 million towards a 100 percent ownership of Saab. Instead of the Finance Minister, his State Secretary Hans Lindblad showed up. Snubbed, Li Shu Fu got up and left the building.  Saab is also mighty miffed. Says Aftonbladet:

“Saab has completely lost confidence in their administrator Guy Lofalk and plans to go to the District Court in Vänersborg on Monday to ask to have him removed.”
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Our Daily Saab: Duck And Cover Fri, 07 Oct 2011 19:38:05 +0000

Where to start? Let’s start with the money. The $96 million promised by China’s Youngman and badly needed by Saab are not here. They haven’t left China either. Not just because China is on vacation. Youngman claims they have not received what they were promised, and until that happens, no money will be sent. “If the conditions are not met, we cannot pay,” Rachel Pang, president of Youngman, said in an email to Dagens Industri. Welcome to China. Now wait what the Swedes have up their sleeves.

The Swedish paper Sydsvenskan reaches Rachel Pang per phone. Ms. Pang says Saab hasn’t kept its end of the deal. “When they have transferred the technology into an escrow account, we will pay,” she says. The technology is the construction data for the PhoeniX platform. Hard to transfer that per bank wire, but who knows.  The paper asks about the NDRC. Ms. Pang says they had a good meeting. “They want to be ready soon.” How soon? Ms. Pang has no comment.

Saab needs the money in a hurry. The Swedish government is currently paying the salaries of Saab’s workers. But only until October 20.  Then Saab has to pay.  “What if Saab does not have the money to meet payroll?” Dagens Industri asks. “It will be the same as in June, July and August – we will start the process to secure our members’ money,” answers Martin Wästfelt, legal counsel of Unionen, one of the unions of Saab’s workers. It will go very quickly then. On October 31 is a creditors’ meeting. The Unions will be the main creditors.

So where is the money? Dagens Industri comes to the conclusion that there “is a knot in the deal between Youngman and Saab,” and we tend to agree.

Other people seem to agree also. Such as the Swedish government, and the reorganization administrator Guy Lofalk.  Guy Lofalk recently traveled to China and shopped Saab around. Apparently, he was not dispatched by Saab. He was dispatched by the Swedish government. There are two versions of this story.

The benign version is told by Dagens Industri. The paper writes that the Swedish government wants to take over the 230 million Euro loan from the European Investment bank, thereby becoming an owner in Saab. Then, the Swedes want to sell the company quickly to a Chinese buyer. Any Chinese would be fine. The Swedish government would prefer – the yellow devil you know – Geely.

The sinister version is told by Swedish Radio. It basically reiterates the same game plan, but under the headline “Lofalk has gone behind the backs of Saab.” The station says that  the Swedish government wants to “get rid of Saab’s CEO Victor Muller.”  The station claims that Lofalk convinced Pang Da and Youngman to withdraw from the deal, which would explain the missing money. The station says that Lofalk came back from China with the news that he has Geely as a buyer.

Let’s check in with the faithful at Saabsunited. They never liked Dagens Industri, and they prefer  the sinister version.

Geely is on record that they don’t want Saab, but this can change. If some of the above becomes reality instead of duck soup, then there is another problem in China: Only one company can ask for NDRC approval at any given time. A slighted Youngman can wait forever and tell Geely to take a number. Which would mean that the Swedish government will own Saab. If it is dumb enough to go for it.  They aren’t stupid.



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Our Daily Saab: Are These People Serious? Thu, 06 Oct 2011 12:14:36 +0000

Yesterday, we reported that Saab was waiting for some $93 million to arrive from China. The matter has not changed. Now, people on the inside get the impression that yellow knight Youngman wants out. This morning, Swedens’s Dagens Industri cited an inside source that says that Youngman wants out, and another Chinese maker wants in. Yeah, sure.

Youngman had agreed to give Saab the $93 million in exchange for production rights to the PhoeniX platform. Money is needed to tide Saab over while they are in reorganization. During that time, no new liabilities may be incurred, said Dagens Industri yesterday. The money was promised for end of September. It has not arrived.

An inside source cited by Dagens Industri expressed its wonderment about Youngman:

Without the promised money from the Chinese, there could be a breach of contract. The fact that the money is delayed suggests that Youngman may no longer be interested in Saab. Are they even serious?”

What also is in doubt is that China’s NDRC will approve the deal on time. On that, Dagens Industri got ahold of one of the best experts available: Bengt Hamsten. The Swede is a professor of Mechanical Engineering at the Chongqing University in China, was CEO of the MAN Truck and Bus division in China, and member of the board of directors of MAN Nutzfahrzeuge. Hamsten knows Youngman’s owner, who wanted Hamsten as a director of Saab once the deal is consummated.

Saab’s wishful calendar said NDRC approval would come by October 14. No way, Hamsten says to DI:

 “I do not think that the NDRC will render a clear decision on 14 October. There will likely be a partial decision that may untie some knots, but not all. “

Government support is needed above and beyond an NDRC decision. Hamsten doubts that Youngman has the money needed to develop Saab:

“No, they do not, even Geely did not have the money to buy Volvo Cars by themselves. These guys are not billionaires, they get money by bringing in partners such as the provinces and the Chinese government.”

Someone who was picked as a director by Youngman is willing to have his name in the paper while dispensing doubt.  He doesn’t seem to think the job is still available.

As Youngman becomes doubtful, other rescuers are being floated. The source familiar with the matter told Dagens Nyheter that Volvo owner Geely has shown interest in Saab. This hit the Dow Jones Newswire (via Fox News) and immediately made the rounds. “According to the paper’s source, Geely has shown “genuine interest” in the carmaker and contacted lawyer Guy Lofalk.” A little later, Dow Jones called up Geely, only to hear from its executive director Lawrence Ang: “We have no interest in acquiring Saab.” Scratch that one. Geely already has Volvo. They don’t need a Saab.

The trotting-out of Chinese suitors has become routine in these soap operas. People who know the Chinese (and Hamsten does) know that they are very reluctant investors. Investing in foreign companies doesn’t have a rich tradition in China. They are used to foreigners bringing money. Giving money to foreigners is still a bit alien.

There is one problem few want to admit:  Saab cannot be saved  with a few hundred million.  It takes many billions that probably are invested better elsewhere. Just to develop one car can cost a billion bucks. GM brought more to the table than money. They had platforms, engineering, a bank, a distribution network. Nevertheless, they failed.

Of course, say the faithful, GM failed because they did not know what they were doing.  And the people who are in charge now do?


“Again, I don’t think we should be too worried about either of these issues, just that this is what is going on behind the scenes yet reported publicly. There’s also a healthy amount is going on that we can’t really report on that gives us enough confidence not to report on this story as breaking news.”

(Final chapter of a long article on the matter, appearing today in fanzine  Saabsunited. )



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Our Daily Saab: The Chinese Deal Wed, 05 Oct 2011 20:54:41 +0000

At Saab, which is working (well, not really working) under court protection from creditors, the big question is: “Did the money come in?”

The money is the €70 million ($93 million) promised by the Chinese bus manufacturer Youngman as a bridge loan. Saab needs cash desperately. Court protection means no new loans. Cash is king.  No cash has arrived from China. Saab is not the only party in Sweden that is waiting for answers from China. Sweden’s National Debt office is waiting for answers also. Let’s have a look.

Reuters reports that Saab “has not yet received the 70 million euros ($93 million) worth of bridge financing it needs to survive while it restructures under court protection. This according to Saab spokesman Eric Geers who told Reuters:

“The money has not come in yet. We originally thought it would take about two weeks. The process is ongoing, and we will give information as soon as we have the money. It is hard to say exactly when this process will be finished. But it will be soon.”

The loan is in exchange for a non-exclusive license of Saab’s (unfinished) PhoeniX platform. The money was expected by September 25, but it’s not here. Not much will happen in China this week. It’s the October holidays where anybody who is somebody in China celebrates the birthday of the PRC by traveling to the beaches of Thailand, or  shopping in Tokyo. The only one seemingly left is your solitary scribe.

Also waiting for word from China is Sweden’s National Debt Office. They want to reach an opinion on Youngman, needed to approve a $320 million investment into Saab. For that, the NDO needs financial information. Said Anna Petre of the National Debt Office to Dagens Industri:

“It is slow. A family-owned Youngman is not accustomed to disclose sensitive information about economic figures such as sales and profits.  I asked to get revised financial statements from them. And they asked what I  mean with ‘revised.’ They work in different ways than we do.”

I can only imagine the terror that request caused at Youngman. Many Chinese companies don’t even publish a list of their products out of fear that the competition will find out what they have. A foreign government agency asking for an updated P&L? Horrors! Everybody, hide!

That information is crucial. Dagens Industri says:

“By the end of this week, the information must have reached the Debt Office to enable it to make a decision before 14 October. This is when a decision is expected from China to allow Youngman and Pang Da to invest $320 million and become the majority owner of Saab.”

By the end of this week people start coming back from vacation in China. Slowly.

Saab’s schedule, as compiled by Dagens Industri, is tight, very tight, and it does not allow for the customary Chinese delays. Never negotiate with the Chinese while looking at your watch or calendar.

NDRC approval in two weeks?  Sure.

I don’t have Victor Muller’s balls.

If that timetable would apply to me, I’d stay in Thailand, and buy a new phone.

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Saab Submitted To Chinese Water Torture Thu, 04 Aug 2011 18:27:59 +0000


Saab’s white collar employees were getting blue in their faces from waiting for last month’s paycheck. Saab had to sell off slices of the company to pay workers who sit at home twiddling their thumbs. According to the always well informed Saabsunited (when it comes to good news), salaries were transferred today at 5pm. On to the next payday.

Meanwhile, things don’t look so good in China. In June, Saab signed a non-binding memorandum of understanding (MOU) with Chinese distributor Pangda Automobile and car manufacturer Zhejiang Youngman Lotus. This had been feted as the second coming of Christ over in Flagwavingland. Put your ear on the ground. Hear that sound? It’s the Chinese, dragging their feet.

As we all know, time is money and Saab has neither. Pangda’s and Youngman’s investment into Saab must be approved by the Chinese government. For that, they need an application to get a lengthy process going. One would think those applications had been filed months ago. If Chinacartimes is correctly informed, those applications still need to be written. Says CCT:

“They are likely to submit the feasibility plan for Saab case to NDRC within three weeks.”

Now this is China. “Likely to submit” means: “Maybe we will, maybe not.” And “within three weeks” means: “Don’t rush me.”

It also means: “Don’t come to us for more money, sorry, our hands are tied.”

According to the CCT report, “due to restrictive policies by the Chinese government, the two Chinese companies are not allowed to make more investments to save Saab at the moment.”

Ordering more cars also is out of the question. Says CCT:

“Pang Qingnian, Youngman’s chairman, said that they could not make further investment in Saab by buying vehicles, as Youngman has limited quotas for vehicle import, but he believes Saab could go through the difficulties through various financing means.”

Then, Pangda’s Chairman had encouraging words. Report CCT:

“Pangda’s chairman Pang Qinghua said that if the plan could obtain approval in two or three months, Saab’s financial problem won’t exist, but there will be crisis if the approval takes a longer period.”

You can bet that this approval will not happen tomorrow. The deal needs approval from at least three regulatory agencies in China, one of them the powerful National Development and Reform Commission (NDRC). This agency, and many other parts of the government are on record that they want just a few big car companies in China, and not more than 100 as it stands now.

In the unlikely event that the deal should be looked upon favorably, any approval will take a long, long time. The joint venture between PSA Peugeot Citroen and China’s Chang’an took a whole year to get all necessary official blessings. The fact that Chang’an is a state-owned enterprise, one of China’s largest automakers, and owned by government-owned China Weaponry Equipment, did not speed up the paper-shuffle. Imagine how long it will take when a car dealer and a small Chinese busmaker want to get permission for a ménage-a-la-trois with a walking dead.

The scuttlebutt amongst expat car-execs and expat auto-writers over a beer in Beijing’s Sanlitun bars goes like this:

  • An ice age in hell is given better chances than an approval of the threesome.
  • Pangda is thought to have written off any money sent to Trollhättan as advertising. Imported Saabs are thought to be too expensive and too close to much cheaper Buicks made in China.
  • All bets in China are on Saab going under, which will save the all-important face . The government will have to deny nothing, Pangda and Youngman are spared the mission impossible.
  • A bankruptcy will probably rev up interest in China. We hear the Chinese delegation was impressed by what they had seen in Trollhättan, and may want to bring parts of the factory to China on the cheap.

[UPDATE: The Swedish site reported that "a major US investor plans to become part owner of Saab. Within hours, Saab denied the news. The speculation is that GEM, which funded Saab's white collar salaries this month was pumping the stock (which it just bought yesterday) in order to dump it fast. -EN]

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Saab And Youngman To Spin Undisclosed Amount Of Cash Into 3 Cars Mon, 04 Jul 2011 23:25:37 +0000

[Editor's note: the initial draft of this piece misunderstood the structure of the deal. Youngman and PangDa have paid over $350m for a 51% of Swedish Automobile, Saab's parent company (which has a market cap of $68m). Funding for the New Product Joint Venture (50% owned by Youngman, 50% owned by Swedish Automobile) has not been disclosed. See comments for more background.]

Just when the lights seem to be going out all around Saab, with employees calling for bankruptcy, suppliers in revolt and even the Swedish government pretending like nothing was happening, Saab always seems to find away to prolong the agony. Selling, then leasing back the factory was one step that’s been approved by the EIB. Getting the suppliers to take ten percent down on deliveries? Well, it turns out that management has some time to sort that one out, as the factory’s annual vacation starts in a week, and Saab is letting its employees go a week early rather than starting up and then shutting down the line. And the company is certainly hoping that it won’t have to restart the line simply to restore confidence, as it’s announcing the “final agreement” with China’s Youngman Auto and the dealer group PangDa for  €245m (about $365m) which it hopes will clear up the perception that Saab is a sneeze away from death. Needless to say, this agreement fits squarely into the “stringing along” category rather than the “game changing” category…

For one thing, this is not a new deal, but simply a more detailed “final” version of the agreement it reached in principle with Youngman and PangDa nearly a month ago. For another, it still needs Chinese and Swedish government (not to mention GM) approval… the former of which is hardly likely, given that Saab will compete fairly directly with well-connected BAIC (motto: “From Saab, Better Than Saab”), and the government is looking to consolidate its auto industry, rather than duplicate efforts. And Sweden’s government? According to accounts in the Swedish press, the auto industry is now wondering aloud if Sweden cares whether it stays or goes. Saab’s plight seems to be the curiously unspoken subtext, although long-term problems like the “lack of Swedish engineers” are openly acknowledged. In any case, if the industry that has “lost” Saab and Volvo first to Americans and now to the Chinese has to be asking if the government cares about it, the answer isn’t going to be pleasant. Not knowing enough about Swedish politics to have an opinion on the matter (sorry car fans…), I can’t help but wonder if the Swedish government’s silence isn’t simply its most tactful option.

After all, like most of Saab’s eleventh-hour deals, the details of the most recent “rescue” are hardly encouraging. Like Sergio Marchionne angling for a stake in crippled Chrysler, Saab’s Victor Muller is playing with his sunk investments, Saab’s “know-how,” rather than actual cash. As a result, the Saab-Youngman joint venture seems to be a full-sized enterprise with a half-sized undisclosed budget. Consider the following, from Saab’s presser:

The NPJV will be 50 percent owned by Saab Automobile and 50 percent by Youngman Passenger Car, and forms the foundation for an expansion of the Saab product portfolio with three models which until now did not form part of Saab Automobile’s current and future product portfolio. As such the NPJV will focus on developing three completely new Saab vehicles: the Saab ’9-1′, Saab ’9-6′ and Saab ’9-7′.

Within the development process of these three new vehicle lines, Saab Automobile will be responsible for controlling and managing the design, the development and testing process to the start of production and providing other necessary technical and quality control support. For this, Saab Automobile will source existing capabilities and expertise from its state-of-the-art technical development department in Trollhättan. Youngman Passenger Car will be responsible for providing the necessary financial investments in the joint venture.

Now, to a “career blogger” like myself, $350 million and change is a lot of money. But best-case scenario, we’re talking about at least two new platforms here, possibly three. Industry rule of thumb states that a billion dollars must be spent on an all-new competitive platform. Building even one credible car that performs to Saab’s oft-touted “premium” standards for $350m would be quite the accomplishment, but it’s clearly even worse than that. After all, that $350m+ will have to be augmented by an actual development budget. And, according to Saab

The Saab ’9-6X’ and Saab ’9-7′ will be key to enhancing the prestige of the Saab brand to an even larger group of customers in China and the US, while the entry level Saab ’9-1′ will appeal to urban motorists around the globe.”

Thus, the 9-1 becomes a MINI-fighter, the 9-7 becomes some kind of large “prestigious” sedan, while the 9-6X is presumably a three-row SUV. The 9-7 and 9-6 clearly sound like modified platform-mates, while the 9-1 will require another new chassis… which means one full-size premium chassis (modifiable for passable CUV/SUV duty) and a premium-ish small car for an undisclosed sum. Designed, developed, tested and overseen by Saab’s not-cheap Swedish engineers (who are, in their defense, both well-vacationed and rare).

If this formula succeeds, it will prove that A) China is the land of industrial miracles, and B) Sweden is the land of auto marketing miracles. After all, Volvo has been trying very hard to monetize one large platform (P2, aka Ford D3) as “prestigious” sedans and crossovers for a while now, with little-to-moderate success (hampered, it must be added, by even-less usccessful smaller cars). And what has Saab got that Volvo didn’t, besides the raw motivation born of gnawing terror that comes with having a Chinese car dealer as your backer instead of a giant global automaker? Before you answer that, consider that Volvo spent $387m simply to update and retool its Ghent plant for production of the current S40… so the answer sure isn’t “money” (unless Youngman is willing to spend over ten times what it’s already dropped on Saab equity). Meanwhile, a “global” small car sounds marvy, especially in light of Muller’s obvious obsession with the ur-92, but the tiny budget, Chinese production and “global” description seem at odds with the “prestige” part of the story. Which basically sums up the entire problem with the Saab predicament.

What happens next? Who knows. Though the Chinese were willing to spend well over the market rate for Swedish Automobile equity, Saab has a money-losing short-term problem in the form of a shut-down factory and laughable (if they weren’t so sad) sales. This investment might help on that front, but it leaves the brand’s future very much in question. Meanwhile, the Swedish government clearly no longer sees its auto industry as a unique symbol of national pride, and won’t shell out krone one to save it. And the EIB has probably dug up new dirt on Vladimir Antonov, Saab’s somewhat dingy white knight in waiting, only approving the lease-back deal without Antonov’s involvement, and won’t give money to failing firms. Plus, Beijing has reasons to veto the deal. Which means the Chinese could get everything they want from Saab with fewer headaches when their Swedish paramour swoons, seemingly inevitably, into bankruptcy. Unless Victor Muller is able to pull just one more “rescue” out of his hat… otherwise, Saab seems doomed to become a low-cost Chinese brand hocking cars with tiny development budgets [see comments below].

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Saab On Hold Again, And Other Underreported News Mon, 20 Jun 2011 21:38:51 +0000

Our friends at Saabsunited are slacking off. They used to have cameras trained on the Saab plant in Trollhättan that allowed them to (prematurely) report the return of the workers to the idling plant. Now they had to learn out of the press that the plant will remain closed for a few more weeks. From Reuters all the way to Car and Van Weeks, they all report that Saab workers will stay at home for another two weeks, or thereabouts. The negotiatations with the darned suppliers are ongoing. What else is new? Well, Saabsunited was able to provide the news that the news are true, and that “no definite date for a production restart has been set.” To make up for the temporary breakdown of communication, Saabsunited was allowed to listen-in on a conference call with American suppliers. However, they “can’t reveal specifics.” So why listen in at all? I know, the matter is getting old and tedious, but while we are at it …

Previously, Saabsunited was more on the ball. For instance, they had found the good news in Chinacartimes that Pangda has finished its due diligence process with Saab (that was quick.) What they forgot to say was that Chinacartimes unearthed a niggling little detail:

“It’s a procedure for Chinese companies to conduct due diligence if they want to acquire or partner with foreign companies, and then they are allowed to submit to the regulator an application for opening a joint venture.

However, the application should be submitted by Youngman Automobile, said Pang Qinghua. He has urged Youngman Automobile’s chairman Pang Qingnian to file the application as soon as possible.”

Well, lets hope that both submit their application. All parties involved in a joint venture need to be approved by the Chinese government. Because Pangda and Youngman want to hold interests both in the joint venture as well as in Saab, they better submit those papers. Remember how Hummer got shot down? It never was shot down. The government claimed they received an incomplete application, and then they never received a complete one.

After that secret conference call, Victor Muller reminded Saabsunited of “a previously announced fact that has been underreported – that Youngman has been preselected to make a deal with Saab by the NDRC.” Ok, so let’s do our reporting duty. “Preselected” is the wrong word. Youngman was first to hand in their application (which waits to be updated with the due diligence report and whatever else the Chinese government needs).

When other companies such as Hawtai applied to the NDRC for permission to do a deal with Saab, the NDRC did not deny the application either. The NDRC reminded Hawtai and any other suitors that Youngman had handed in their application first, and according to Chinese rules, no other application can be considered by the government while the first application is pending, ni tingdong ma? With that out of the way, the NDRC can now take its time with Youngman.

Tip to Saabsunited: There is another article up on Chinacartimes. Likewise underreported. It is titled “Are Youngman the best bet for Saab?” It has words such as

“Youngman’s negotiating policy seems to revolve around thewaiting for them to be half dead, half alive’”


“SAIC waited until MG-Rover was cold and very dead before moving into scrape the corpse clean and they launched the Roewe brand two years later. Could Youngman be stalling for time to repeat SAIC’s tactics?”

Required reading. And while we recommend articles from China, here is another one. Underreported again.

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On The Reception Of The Saab/Pangda/Youngman Deal In China’s State Media Tue, 14 Jun 2011 17:26:32 +0000

So what are they saying in China about the Pangda/Youngman/Saab threeway? The blogs and message boards are full, of course. Cars are of high importance in CCC (car crazed China.) Much more important, what does China’s government say? Multiple agencies of the government will have to approve a deal with Saab. However, officials won’t utter a word before, often even after a deal is done or has been denied. But then, the government owns newspapers. Analysis of state media is a refined science in China. Let’s see some of it in action.

The clearest signals are professors of state universities writing op-ed pieces. The op-eds strictly reflect their own opinion only. Sure. Hummer was lambasted by the professors in many op-ed pieces, and we know how that ended. Geely’s purchase of Volvo was criticized while government-owned BAIC was in the running. The deal received praise when Geely was the only contender. And we know how that ended.

Now what about Saab? One day after the big announcement, how does the deal play in the state-owned press?

There are three papers to watch when we want to look for signals being sent abroad and to the international business community: There is People’s Daily, the paper of the Communist Party. Then there is Global Times, an English-writing sibling, also owned by the party. Global Times can be refreshingly candid, and is often used to test the waters. Finally, there is China Daily, owned by the Central government via the news agency Xinhua. What are they saying?

A search for “saab” in Global Times produces the result pictured above. Saab? Never heard of it. What Saab? However, they have buttons for Facebook and Twitter. Facebook and Twitter are blocked from China, but a CCP owned paper has them in its masthead? Interesting. Did I mention  that Global Times is often used to test the waters?

In People’s Daily, “saab” yields too many hits for “Elie Saab,” the fashion designer. The party paper is in love with Elie Saab.

Let’s narrow it to “Saab Youngman.” Sorry. Mei you. No have.

As far as the party organs go, Saab and Youngman is no news. State media write about the “Seven sins of express delivery” and about an American who teaches his Chinese wife how to drive in New Jersey. Saab/Pangda/Youngman doesn’t even make it to the business section.

The art of the snub is perfected by China Daily. China Daily outsources the criticism. Instead of writing a piece of its own, China Daily prints a piece from Reuters. Reuters doesn’t hold back:

“The deal is subject to approval from Chinese government agencies and third parties, an issue which has scuttled previously agreed investments from Chinese companies.”

“Beijing follows a strict and price-sensitive policy when it comes to outbound acquisitions, which means gaining Chinese clearance could still prove difficult.”

“Failure to secure approval scuttled Sichuan Tengzhong Heavy Industrial Machinery’s bid for General Motor Co’s Hummer in 2010.”

Why blast the deal yourself if the foreigners do such a good job? Well, China Daily did add something of their own. A picture of Youngman’s core competency:




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Antonov Drops Out Of Saab Real Estate Leaseback, Youngman Deal Doubted Tue, 14 Jun 2011 15:25:56 +0000

Strap on the man-pants, Saab fans, because there’s another heaping load of bad news for the Swedish brand this morning. First off, Saab’s mysterious Russian backer Vladimir Antonov has backed out of a deal in which he was to buy property at Saab’s Trollhättan plant and lease it back to the company, stabilizing its short-term cash position. Automotive News [sub] quotes an Antonov rep as saying

The property sale is now being discussed with external investors

Apparently the Swedish real estate investor Hemfosa has stepped into the breach and sources say a deal could happen quickly. Antonov’s man added that his boss was still interested in securing a shareholding in Saab, a move that has been awaiting approval by the European Investment Bank for some time now. But despite Antonov’s insistence that he’s not going anywhere, the real estate deal pullout is troubling. After all, if Antonov were really the Saab zealot he claims to be, willing to support and revamp the brand at any cost, wouldn’t he want to own the Trollhättan plant? Wouldn’t he want deed to the factory in case Saab, as it exists now, goes into bankruptcy? This is the first indication that Antonov is treating his Saab involvement as an investment rather than a crusade, which is frankly a bad sign for what’s left of the Swedish brand. On the other hand, with Chinese firms chopping up Saab, what’s a businessman to do?

Which leads to another interesting question: if Antonov has been a generous sugar daddy thus far, why alienate him by cozying up to not one, but two Chinese firms? The answer lies with the EIB’s unwillingness to let Antonov take a timely stake in Saab, which needs short-term financing more than vague promises of long-term support. And though the Pang Da deal brought in some short-term cash, but much of the $352m invested by the two Chinese firms is in the form of longer-term financing, which won’t help Saab out of its short-term supplier woes. AN [sub] reports:

“What they have presented now is long-term financing, which is positive. But that does not solve today’s situation, which is very serious,” Svenake Berglie, chief executive of the FKG auto industry suppliers group, said on Tuesday.

He told Reuters his group estimated Saab’s debts to suppliers at 300-500 million crowns.

While the firm had worked out payment plans with some suppliers, talks were still taking place, Berglie said.

Meanwhile, even those longer-term deals with Pang Da and Youngman are still subject to approval from China, the EIB, Sweden and GM… which could take three months and may well not happen at all. Bloomberg has the latest round of analysts dashing cold water on any optimism surrounding the latest deal, reporting

“I have the impression that Saab is scrambling for any partner in China now,” said Lin Huai Bin, a Shanghai-based analyst at IHS Automotive, in a telephone interview. “If Saab wants to succeed in China, they need to find a sizable company with good profit and good government connections,.”

Youngman may find it difficult to convince the Chinese government to give approval for a manufacturing venture, given the company’s size and China’s wariness to allow further capacity expansion in the auto industry, Lin said…

China’s focus on controlling inflation and tightening lending may also limit the tie-up’s success, said Robert Theleen, chairman and co-founder of investment capital firm ChinaVest Ltd.

“The auto industry is low priority for the government at the moment,” said Theleen, who provides cross-border merger and acquisition advisory services for multinationals in China. “They’d also prefer to see how the Geely-Volvo deal pans out.”

There’s much, much more of that kind of analysis over at Bloomberg. It’s said that Saab would have to produce 100k+ units per year in order to even have a chance at a Chinese government approval of the deal… and Saab’s global sales record was 133k units and change. In case you’re still struggling with what this all means, here’s TTAC’s primer on learning to let go of Saab and move on. We suggest you give it a look.


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Saab Firmly Under Chinese Control (If All Goes Well) Mon, 13 Jun 2011 15:01:52 +0000

The assembly lines in Trollhättan are still down and will be down for a while. With Spyker & Saab gasping for money, another Chinese party threw them a life line today. The price: Saab will be in Chinese control if and when all is approved.

Today, Saab, Chinese distributor Pangda Automobile and car manufacturer Zhejiang Youngman Lotus “signed a non-binding memorandum of understanding (MOU). The MOU includes an equity participation in the total aggregate amount of about EUR 245 million as well as a strategic alliance consisting of a three partite distribution joint venture and a tripartite manufacturing joint venture for Saab-branded and child brand vehicles in China,” Spyker says in a statement. The statement continues:

“The equity stake of Pang Da in Spyker will remain at 24 % raising its investment to EUR 109 million. The share price remains at EUR 4.19 per share and Pang Da will have the right to nominate up to two members of the Supervisory Board of Spyker.

Youngman will take a 29.9 % interest in Spyker on a fully diluted basis investing EUR 136 million at EUR 4.19 per share. Youngman will have the right to nominate up to two members of the Supervisory Board of Spyker.”

29.9 plus 24 percent equals 53.9 percent, says my calculator.  Bingo. Saab is Chinese.

Then, there will be several Chinese joint ventures.

  • There will be a manufacturing JV that makes “Saab branded and child branded vehicles for the China market.” Saab Automobile and Youngman will each have a 45 percent interest in the manufacturing JV and Pang Da will hold the remaining 10 percent.
  • Then, there will be a distribution JV. Saab Automobile and Youngman will each have a 33 percent interest, Pangda will hold 34 percent.

Now keep in mind that Saab is owned by Spyker. If the deal goes through, Youngman and Pangda will own the joint ventures via their ownership of Spyker and hence Saab, and then again directly. Victor Muller better polish his resume.

Says AFP: “The deal, which still requires regulatory approval from a number of authorities, would place basically all of Sweden’s auto industry in Chinese hands, after Swedish brand Volvo was bought by Chinese Geely from Ford last year. Saab and Spyker chief executive Victor Muller said he was thrilled by the deal.”

Production will stay shut down at least until the end of this week, company spokeswoman Gunilla Gustavs told AFP, adding it was too soon to say when the assembly line would begin moving again.

Youngman is a relative nobody in the highly fractionalized Chinese auto market. They are more known for their buses. Youngman Lotus makes uninspired cars with the Lotus badge for added cognitive dissonance.

Whether Saab will continue to live another day or die, that is in the hands of Chinese regulators, GM, and European governments. AFP has its doubts: “It remained unclear however if the deal would be approved quickly enough to rescue Saab.”

The Financial Times called around and received nothing but unenthused  comments.

Bill Russo, head of Synergistics, a Beijing auto consultancy, and former head of Chrysler in China, said: “Going public before doing the political engineering is generally not a pathway to success in China”.

“I don’t think Youngman has enough credibility to be the third partner in the Pang Da-Saab deal”, Namrita Chow, analyst with IHS Automotive, told the FT. “Beijing is unlikely to give approval for a venture that will bring direct competition to BAIC”.

Maybe, maybe not. There are rumors in Beijing that the smaller companies could be stalking horses for a bigger Chinese company.  Saving Saab in Europe and setting up a new factory in China needs someone with bigger pockets.

What are the insiders in Sweden saying? Not much. The Saabsunited fanzine runs the press release uncommented between the story of a Saab with three big dogs, and an update about the still unsolved leaseback.  And what does have? A story about a drive through the Swedish midsummer night.

Prior dealings received much more fanfare.

Update: inside.saab now runs the press release. Without any comments.

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