SAAB Keeps on Slipping, Slipping

To many peoples’ surprise, SAAB was amongst the brands that made the cut when federal bankruptcy judge Robert Gerber cleaved GM in two. Saab was owned by GM Canada. It’s now part of New GM—which is busy negotiating with The Koenigsegg Group to offload the Swedish automaker. Very little has come out of the recent negotiations re: the sale and/or the European Investment Bank (EIB) loan that Saab, GM and Koeningsegg view as a prerequisite for the deal to go down. Meanwhile, last week, SAAB CEO Jan Åke Jonsson declared “we need a cash infusion so we can boost production.” Förlåt?

At the moment, SAAB is building 100 or so cars per day—36,500 per year without holidays—at their main production facility in Trollhättan. In recent years, SAAB have averaged sales of 120,000 – 130,000 cars per year. In 2008, sales of the Swedish cars fell to 93,388, down 25 percent. And it’s getting worse.

Sales of SAAB in Sweden are down 60 to 65 percent so far, SAAB CEO JÅJ revealed in a recent interview. They fell to 4200 units during the first six months of 2009. In the US, sales during May fell 64 percent to a mere 783 units. SAAB sales in Europe dropped 66 percent to 2,191 during the same month.

Since sales of SAAB have plummeted nobody really understands why they want to boost current production levels.

Another conundrum: CEO JÅJ still seems to be talking in terms of using the EIB loans for operational expenses. The Swedish business daily newspaper Dagens Industri reckons any such move would make the loan approval more difficult to obtain. EIB loans can only be used for future projects, preferably “green” projects.

Moreover, it seems the Swedish Government is not impressed by what they have seen of the group who might well become the new owners. Last week, Jöran Hägglund, Deputy Minister of Industry was interviewed by Dagens Industri. “Jöran Hägglund replies with a smile in response to the question of how he views the new owners’ public presence (or absence).

“Then he says: ‘We have met them all, and it seems like some are more shady than others, or whatever the appropriate phrase might be. But we have made it clear to them that if they become the ultimate owners, we will conduct a thorough economic analysis of each and every one of them.’

“This process is said to have begun and evidently Hägglund’s team will be getting help from the outside. ‘We will get help from a varitey of sources, so I am sure we will get the information we need,’ says the government spokesman.”

As TTAC has reported, the deal to save SAAB is a long way from assured.