GM Lost $5k On Every Saab Sold In The Last 8 Years
by Thor Johnsen
November 17th, 2009 10:05 AM
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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.
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I quote TJ "...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. " Why would the current exchange rate be used to determine a loss for what was sold over the past eight years? Wouldn't the real financial impact be calculated using appropriate exchange rates as they varied over time? If anyone is interested in what Saab owners think of their vehicles, check it out on Kelley's Blue Book some time. Anecdotally, I can say that whenever anyone gets in and drives a 9-3 or 9-5 with a four cylinder turbo, they are always pleasantly surprised at how fun those cars are to drive. Acceleration off the line is great, cornering is awesome, highway driving is like floating on air - and for some reason those engines just find their own groove around 80-85 mph. And yet FE is a good 30 MPG highway. Full disclosure - I am a GM employee whose hubby has bought 3 9-5 Sedans over the past nine years (he likes to drive new cars) and I bought the 2008 9-3 Convertible. But my anecdotes above are from men who live/ drive in Manhattan, Long Island, New Jersey, SE Michigan. Just like most GM vehicles, went a person gets in and drives a Saab, they like it.
I owned a 9-3. It was a lot of fun. My MG Midge was a lot of fun too, but I'm glad Leyland is dead, too.
Lests not forget the badge-engineered abominaiton that was the Saabaru. How much did that cost Subaru in lost WRX sales and brand degredgation?
Accounting trickery can shift income from one year to another, but not perpetually unless Sweden's tax authorities are completely hapless. Saab's history of losses exemplifies the old saw, insanity is doing the same thing over and over, while expecting a different result. GM's "Board of Bystanders"--how very true.