Saab Restarts Production

Edward Niedermeyer
by Edward Niedermeyer

With €30m from PangDa and €30m from Gemini Investments, Saab restarted production today at its Trollhättan factory. According to SaabsUnited, the line will run at 80% speed today and Monday, before moving to 100% (over 200 cars per day) by the middle of next week. Speaking at a press conference, CEO Victor Muller reflected:

It’s been an interesting lesson. A company like Saab, that lives in a glass house, should never be caught in a situation where there is not enough cash to withstand the storm as the one we have seen now. What happened seemed like a very insignificant situation became a very significant situation, and next thing you know, you are losing six weeks of production… it was very, very tough and we’ve had some very adverse circumstances that we’ve had to live with, but we got out of it. I think that if you got through 2009-2010 as Saab has been, anything else is relatively easy. We will definitely ensure that this will not happen again. This means that we will be on a quest to ensure that we have sufficient funds at all times to overcome adveersities like this because we can’t afford to have another production stoppage with all the relating downsides, such as disappointed customers, upset suppliers and media attention… that is definitely not in our interests.

Muller went on to say that he had expected orders to drop off during the interruption, but that they had continued… albeit at only 40 percent of their previous levels. The FT reports

The production hiatus has left Saab with a sizeable order backlog. The total of around 8,100 cars includes 6,500 outstanding orders for markets worldwide and an additional 1,300 cars ordered by Pang Da as part of its rescue package. Saab said that €30m in respect of the latter was paid up front.

Muller said that he anticipates a two-to-three-month wait for Chinese government approval of a further tie-up with PangDa, and insists that Saab has the cash to get through that period. But with Vladimir Antonov’s share purchase still pending approval and Chinese approval of the PangDa deal far from certain, the WSJ notes that “Saab’s long-term prospects remain uncertain.” Despite Muller’s insistence that the production shutdown had taught him to keep enough cash on hand, his “quest for sufficient funds” clearly continues. Though it’s hurdled a significant obstacle, the battle for Saab’s survival continues…

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  • Tommy Boy Tommy Boy on May 27, 2011

    I just happened to be at a SAAB dealership getting some work done on my wife's 2002 9-5 (which overall has been a great car). They had a couple of new 9-5's there, and besides the initial sticker shock, I was surprised at how unimpressive the dash was -- hard plastics befitting a 20k car, but not a 45-50k car. But then I realized that the "new" 9-5 is really a GM product that (unlike my wife's car) was designed after GM had taken full control of SAAB. So the new 9-5 (and new 9-4) is going to offer inflated European prices for pedestrian GM-spec components, GM-deficient pre-production testing and GM's notorious beancounter corner-cutting (besides the aforementioned cheapish interior, lowest bidder components designed to last only through the warranty period). I hope that SAAB survives, and does so long enough to someday offer vehicles that are excised of the GM influence, and instead offer true quality engineering, component quality and assembly.

  • Paul W Paul W on May 27, 2011

    Trollhättan running even at 100% equals to a normal car factory running at what, 50%? 30%?

    • Athos Nobile Athos Nobile on May 27, 2011

      If we take 200-240 cars/day as mentioned in other articles as 100% capacity, and considering an 8hr shift, it may be normal or 50% capacity of a "normal" factory. I'd expect around 40-60 cars/hr in a mass production factory. Not bad for Saab.

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