Saab Sells Factory, But Sweden and EIB May Be Killing It Off Anyway

Edward Niedermeyer
by Edward Niedermeyer

Saab has reached a deal to sell 50.1% of its real estate holdings to a consortium led by Hemfosa Fastigheter AB, for about $40m, and has also received an order for $18.4m worth of vehicles from an unnamed Chinese firm according to AN [sub], giving the dead-alive Swedish firm the faintest, cruelest glimmer of hope. The real estate deal was for about a third less than the property had previously been valued at, and still needs to be approved by the Swedish Debt Office, the EIB and GM. Meanwhile, the real struggle is ongoing, as a Saab spokesperson tells Reuters that

Today’s news takes us a good way in the right direction, but it is the agreement (with suppliers) that matters and only then will we be able to communicate a date when we can restart production

But suppliers aren’t even the first in line for Saab’s much-needed cash injection: that goes to workers who are promising to take the company into bankruptcy if they aren’t paid soon. These two recent deals should be enough to pay worker salaries through July, but if suppliers aren’t brought back as well to restart production, the bulk sale and an earlier order from PangDa will never be filled. And those suppliers are currently mulling over an offer of ten percent of what they are owed until the Chinese inject more cash later in the year… not the greatest deal ever. Meanwhile, Saab says

There are other initiatives still being pursued. There is not much we can say about that until we have something concrete to communicate

Like what? What could there possibly be to communicate? reports that GM is increasingly sympathetic to Vladimir Antonov’s case, and that approval of his stake in the firm could come “within days.” But the problem, it seems isn’t GM but the EIB. A rumor reported in goes something like this: the EIB “found something” in its research on Antonov, and with Swedish elections coming down the line, the government wants to let the EIB take the fall for “killing” Saab by not giving approval to Antonov. This is very much a rumor, but given how important confidence is in any kind of cash crisis, not to mention the fact that an eventual Antonov investment has been a key confidence builder for struggling Saab, this is shouldn’t be dismissed out of hand. In any case, there’s got to be a reason for the EIB’s continued non-approval of Antonov’s investment, and even if there isn’t, every day that goes by without approval, these rumors will only grow and further undermine confidence in Saab as a going concern. Ironically, the EIB cites Saab’s lack of viability for refusing to pay out further installments of its loan as well, further aggravating the vicious cycle that we call “circling the drain.”

And the problem, ultimately, all comes back to production. Some of Saab’s suppliers, including dashboard contractor IAC, are refusing to go along with Saab’s plans to restart the line next week, saying they are not cooperating with the factory at all. And though is trying to put political pressure on the Swedish government to force the EIB’s hand and get a deal together, there seems to be relatively little leverage for that argument. After all, Saabs employees aren’t working now, and observers seem to believe that many current employees could keep working even in bankruptcy. How? Give up the building cars thing and become a dedicated engineering and consulting outfit. After all, that strategy has kept even smaller firms (like Lotus) afloat before now…

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  • Sam P Sam P on Jun 29, 2011

    When Saab eventually ceases to be a going concern, I wonder how much of a depreciation hit late-model Saabs will take.Saab produced a 280 horsepower AWD 9-3 with a 6-speed manual gearbox in 2007-8 and brought a number of them to the US market. I bet parts will be pretty much unobtanium after the company's demise, though, and reliability will probably make my Bimmer look like a Corolla.

    • Bryce Bryce on Jun 29, 2011

      Parts are easy its just a Vauxhall VXR with a Saab badge but the dealers think theyre worth real money though customers are few and far between

  • Meccano Meccano on Jun 30, 2011

    And you would loose that bet. SAAB's part division is a separate entity; a subsidiary legally protected from the sins of the parent. SAAB goes under, SAAB Automobile's parts division lives on. They have their own contracts with suppliers, their own inventory, their own lines of credit, their own warehouses and their own distribution chain. Perhaps most importantly they are profitable. There are millions of SAABs out on the road (despite your presumed unreliability), so they have plenty of business for many years to come even if the last SAAB has already rolled off the assembly line. There is nothing mystical about repairing a SAAB either and any competent mechanic can work on them. Most independent mechanics that specialize in Volvos also gladly work on SAABs as well.

  • FreedMike Race car drivers are all alpha-types. Aggression is part of the deal. I think you see more of that stuff in NASCAR because crashes - the end result of said aggression - are far more survivable than they would be in F1 or IndyCar.
  • Analoggrotto Only allow Tesla drivers to race, we are the epitome of class and brilliance.
  • Wjtinfwb When my kids turned 16 and got their Operators, we spent $400 to send both (twins) to 2 driving schools. One held by the local Sherriff was pretty basic but a good starter on car control and dealing with police officers as they ran the school. Then they went to a full day class in N Atlanta on a racetrack, with the cars supplied by BMW. They learned evasive maneuvers, high speed braking, skid control on a wet skid pad and generally built a lot of confidence behind the wheel. Feeling better about their skills, we looked for cars. My son was adamant he wanted a manual, Halleluiah! Looking at used Civics and Golf's and concerned about reliability and safety, I got discouraged. Then noticed an AutoTrader adv. for a new leftover '16 Ford Focus ST six-speed. 25k MSRP advertised for $17,500. $2500 above my self-imposed limit. I went to look, a brand new car, 16 miles on it, black with just the sunroof. 3 year warranty and ABS, Airbags. One drive and the torquey turbo 2.0 convinced me and I bought it on the spot. 7 years and 66k miles later it still serves my son well with zero issues. My daughter was set on a Subaru, I easily found a year old Crosstrek with all the safety gear and only 3k miles. 21k but gave my wife and I lots of peace of mind. She still wheels the Subaru, loves it and it too has provided 7 years and 58k miles of low cost motoring. Buy what fits your budget but keep in mind total cost over the long haul and the peace of mind a reliable and safe car provides. Your kids are worth it.
  • Irvingklaws Here's something cheaper, non-german, and more intriguing...
  • Wjtinfwb Happy you're loving your Z4. Variety is the spice of life and an off-beat car like the Z4 intrigues me as well. More than anything, your article and pictures have me lusting for the dashboards of a decade ago. Big, round analog gauges. Knobs and buttons to dial up the A/C, Heat or Volume. Not a television screen in sight. Need to back up? Use the mirrors or look over your shoulder. If your Z4 had the six-speed manual, it would be about perfect. Today's electronified BMW's leave me ice cold, as do the new Mercedes and Audi's with their video game interiors. Even a lowly GTI cannot escape the glowing LED dashboard. I'm not a total luddite, Bluetooth streaming for the radio would be nice and I'd agree the cooled seats would be a bonus on a warm day with the top down. But the Atari dashboard is just a bridge too far for me.