GM Tog Saabs USA-vinst (Union Says GM Cooked Saab's Books)

Robert Farago
by Robert Farago
gm tog saabs usa vinst union says gm cooked saabs books

Dagens Industri has published a letter from Saab’s union bosses which accuses GM of playing silly buggers with the brand’s accounts. As Saabs United says, “The report tends to support the idea that GM are handy at shuffling results around to suit their reporting needs.” [Thanks for the TTAC translation to commentator Naser Rouholamin]

Recently, the future of SAAB has been the subject of many allegations and much debate. Specifically we are thinking about such claims as “using tax money for playing monopoly”, or “SAAB has always made a loss, hence there is no point in saving it now”.

In order to rebuke the latter claim one must realise that not even GM would have kept Saab afloat the last 20 years from pure goodwill.


No, naturally it has kept Saab because of its development, production gains as well as economic benefits. In a large corporations, accounting procedures can be used to choose were to place profits and losses.

Unfortunately, for a variety of reasons GM has chosen to place losses on Saab.

But it’s the result on the last row in the corporation’s balance sheet that is of interest. As an example of how this can be done we can look at the 2007 fiscal year, when Saab sold 120000 cars, of which 85000 were in Europe.

The cars sold in Europe generated profits for Saab whilst the rest, predominantly US market cars, did not generate profits. However that is not strange considering that sales revenue for these cars was taken by GM in the USA, meaning that Saab bore the costs but saw no sales revenue in return.

The above example shows how the accounts in a global company are treated. It can be very misleading for those who do not know the background information. Thus the allegations that Saab has never made a profit are not correct.

Regrettably the debate on how taxpayer’s money should be spent and invested is more centred on political rhetoric than reliable industrial policy.

Saab has requested that the government guarantee loans from the European investment bank, not that the government should become an owner or give Saab a grant with taxpayer money. Acting as a guarantor on the loan, together with GM, is a prerequisite for in Saabs business plan. This plan means bringing production and development of new products back to Sweden. Furthermore securing the loan will make Saab more attractive to new owners.

The risk involved with guaranteeing this loan is seems quit reasonable when compared the consequences of Saab failing with its restructuring and at least 15000-20000 people in and around Saab loosing their jobs, people who are also tax payers.

This loss tax revenue and the money which the government would have to spend if Saab, and as a result many of its suppliers, go bankrupt would far exceed the 5 billion Swedish kronor which the government would be guaranteeing. And in the case of a bankruptcy the taxpayers will defiantly have to foot the bill.

Comments
Join the conversation
2 of 15 comments
  • Robert Schwartz Robert Schwartz on Mar 24, 2009

    Agreed. A little work and the 92 would sell like hotcakes.

  • Robert Schwartz Robert Schwartz on Mar 24, 2009

    The car in picture was the prototype. Link. The production 92 was dumpier. Link. I think the prototype would be a great place to start from for a modern reinterpretation. I don't think you would use a 3 cyl. 2 stroke engine cooled by thermo-siphon, though.

  • Nrd515 I bought an '88 S10 Blazer with the 4.3. We had it 4 years and put just about 48K on it with a bunch of trips to Nebraska and S. Dakota to see relatives. It had a couple of minor issues when new, a piece of trim fell off the first day, and it had a seriously big oil leak soon after we got it. The amazinly tiny starter failed at about 40K, it was fixed under some sort of secret warranty and we got a new Silverado as a loaner. Other than that, and a couple of tires that blew when I ran over some junk on the road, it was a rock. I hated the dash instrumentation, and being built like a gorilla, it was about an inch and a half too narrow for my giant shoulders, but it drove fine, and was my second most trouble free vehicle ever, only beaten by my '82 K5 Blazer, which had zero issues for nearly 50K miles. We sold the S10 to a friend, who had it over 20 years and over 400,000 miles on the original short block! It had a couple of transmissions, a couple of valve jobs, a rear end rebuild at 300K, was stolen and vandalized twice, cut open like a tin can when a diabetic truck driver passed out(We were all impressed at the lack of rust inside the rear quarters at almost 10 years old, and it just went on and on. Ziebart did a good job on that Blazer. All three of his sons learned to drive in it, and it was only sent to the boneyard when the area above the windshield had rusted to the point it was like taking a shower when it rained. He now has a Jeep that he's put a ton of money into. He says he misses the S10's reliablity a lot these days, the Jeep is in the shop a lot.
  • Jeff S Most densely populated areas have emission testing and removing catalytic converters and altering pollution devices will cause your vehicle to fail emission testing which could effect renewing license plates. In less populated areas where emission testing is not done there would probably not be any legal consequences and the converter could either be removed or gutted both without having to buy specific parts for bypassing emissions. Tampering with emission systems would make it harder to resell a vehicle but if you plan on keeping the vehicle and literally running it till the wheels fall off there is not much that can be done if there is no emission testing. I did have a cat removed on a car long before mandatory emission testing and it did get better mpgs and it ran better. Also had a cat gutted on my S-10 which was close to 20 years old which increased performance and efficiency but that was in a state that did not require emission testing just that reformulated gas be sold during the Summer months. I would probably not do it again because after market converters are not that expensive on older S-10s compared to many of the newer vehicles. On newer vehicles it can effect other systems that are related to the operating and the running of the vehicle. A little harder to defeat pollution devices on newer vehicles with all the systems run by microprocessors but if someone wants to do it they can. This law could be addressing the modified diesels that are made into coal rollers just as much as the gasoline powered vehicles with cats. You probably will still be able to buy equipment that would modify the performance of a vehicles as long as the emission equipment is not altered.
  • ToolGuy I wonder if Vin Diesel requires DEF.(Does he have issues with Sulfur in concentrations above 15ppm?)
  • ToolGuy Presented for discussion: https://xroads.virginia.edu/~Hyper2/thoreau/civil.html
  • Kevin Ford can do what it's always done. Offer buyouts to retirement age employees, and transfers to operating facilities to those who aren't retirement age. Plus, the transition to electric isn't going to be a finger snap one time event. It's going to occur over a few model years. What's a more interesting question is: Where will today's youth find jobs in the auto industry given the lower employment levels?
Next