BAIC Got Saab Technology On The Cheap

Bertel Schmitt
by Bertel Schmitt

GM netted a paltry $200m for the Saab technology it sold to China’s BAIC. So said BAIC to Reuters today, while desperately trying to keep a straight face. The money bought BAIC the rights to three vehicle platforms, two engine technologies and two transmission systems. A pittance, given the fact that developing a new car typically costs from $1b on upwards these days.

Granted, the IP for the 9-5 and 9-3, and the tooling to make them are not the newest, but you can trust BAIC to make the most of it. Interestingly, BAIC got what they desperately needed:

“The overseas technology takeover by BAIC is not only targeted at simple technology, such as manufacturing blueprints, but also the management systems that will enable BAIC to continuously develop and produce high quality vehicles,” BAIC said today at a Beijing news conference. That alone is probably worth the $200m.

Compared to BAIC’s investment plans, it is chump change. BAIC will invest $4.8bl in vehicle development and production over the next three years, Gasgoo reports.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Mjz Mjz on Dec 23, 2009

    If you think that was a good deal, wait til you see GM's after Christmas door-buster specials!

  • TonyJZX TonyJZX on Dec 23, 2009

    let's look at the flipside... GM are selling outdated technology from a company that hasn't made a profit since the Reagan administration (correct?) they had one single buyer who put a lowball bid in if it was worth so much why didn't GM get another buyer? why couldn't they ask for more? why does GM even need $200 mil.? isn't that like 2 weeks burn? And the comparison to Rolex... ridiculous... madam, I have an Rolex and you ARE no Rolex... Saab is at best a Cartier or some off brand that doesn't sell in the bargain bin at Kmart in summary... old product not in demand, from a 2nd rate walking zombie company, sold by Government Motors for a pittance... bought by the 21st century superpower who really doesn't need it but it's nice to have anyway... If it was worth something Audi or one of the other FWD based makes would have bought it.

    • Accs Accs on Dec 23, 2009

      I definately disagree.. It has GMs filthy paws all over it, ntm Subaru. And any company (if you've noticed) that GM has tried to sell.. hasnt. Because the brand / company is tainted. SA.A.B is the remnants of some poor woman who was beaten and abused almost left for dead by her husband. Now put up to auction to live out the rest of her days. For people who dont know.. They obviously dont know. But for those that do... Another BAAD pothole in the road. In other words.. No one would buy Saab.. cause they are all better competitors, which is why SAAB is in this position.

  • Rusted Source Rusted Source on Dec 23, 2009

    "Take the rest of Christmas off boys, turns out we don't have to reverse engineer this thing after all." Many here are missing the point. Some have clarified that "management systems" don't track which managers are naughty or nice, these are the program guts of how to run a company. Getting a blank copy of the software (such as SAP) isn't hard (purchased or pirated), it's the analysis and customization of the product to actually do what you actually need; that can take years. Was Saab's operations tightly integrated with the rest of GM? Knowing big companies (I work for one) I'd say not likely. Do these systems belie effecient methods of producing/marketing cars? Possibly, but at the same time there's a reason why some products have a secret ingredient because everything else about producing it is dead simple to knock off (like Coke or KFC chicken). Getting an inside look at Saab gives BAIC a benchmark for how a major player does it, to determine what needs to change in their business model in order to penetrate all the rest of the world's markets. It doesn't mean they're going to run Saab the same way GM did.

  • Psarhjinian Psarhjinian on Dec 23, 2009
    And we have Union Labor to thank for that. They took every single opportunity to refuse working for realistic wages + benefits. Oh, yeah, because participating in the managment-lead race to the bottom is such a hot idea. For sure. Sign me up for that sh_t. I don't particularly like the people in organized labour, but I can at least get behind the ideology of betterment for the middle class rather than driving a huge wedge into the income disparity and cracking it open further. Are the rich not making enough money yet? Do we really need to thoroughly destroy all the potential that a sizable middle class gives just so we can enable them to make even more while telling us it's our fault for making too much? I'm always amazed at how incredibly good a job the rich have done in convincing the poor and not-quite-as-poor that the problem is that some poor people are making a little more than they are.
    • Shaker Shaker on Dec 24, 2009

      +1 -- But, not to worry, as corporations are using "free trade" to systematically dismantle the middle class. But those underpaid workers can always quit and open a cheese shop* (to compete with other cheese shops) to stay "middle class". *Or a Scotch Tape shop, or some other lame-ass business that will ultimately fail.