Saab: Money Dispose-All, Made In Sweden

Bertel Schmitt
by Bertel Schmitt

Saab is living off charitable donations and newly issued stock to allow its workers to live from paycheck to paycheck while doing nothing. Over at the Blog of Good Hope every little donation to the cause is praised as the Final Deliverance. According of a Blog of Good Hope post, representatives of the Chinese savior Pangda are in Trollhättan this weekend. One of the questions undoubtedly will be “how long, how much?” Or in the language of venture capitalists “how long until we run out of runway?”

How much does it cost to keep the lights on at Saab? A friend of TTAC (Tack så mycket) pointed us in the direction of an older article in Dagens Industri, which budgets the month running costs of Saab as follows. Being Swedish, Dagens Industri provided a budget in Swedish Kronor, we provided the conversion to dollars, using today’s dollars.

Saab’s Monthly Running Cost

SEKUSDLabor: 250,000,000$38,586,250Production and parts:600,000,000$92,607,000Factory Operation:80,000,000$12,347,600Marketing:80,000,000$12,347,600Development:160,000,000$24,695,200Total1,170,000,000$180,583,650

Now of course, this assumes that Saab actually makes something, namely cars. Dagens Industri charitably assumed that Trollhättan makes 5,000 cars a month. (Volkswagen in Wolfsburg does that in two days.) If no cars are made, because there are no parts, then that’s a big savings. No cars to sell, no marketing. While we are at it, save R&D. Nobody will notice. Voila, we have what is called a “Nuclear Winter” calculation in (American, behind the scenes) financial parlance. And this is what we present to you, again using Dagens Industri numbers.

Saab’s Monthly Ruining Cost

SEKUSDNuclear WinterLabor: 250,000,000$38,586,250$38,586,250Production and parts:600,000,000$92,607,000Factory Operation:80,000,000$12,347,600$12,347,600Marketing:80,000,000$12,347,600Development:160,000,000$24,695,200Total1,170,000,000$180,583,650$50,933,850

Whether the final number is $35 million or $ 45 million does not matter: A whole lot of money is going down the Swedish Dispose-All while not a single car is made. And knowing my Chinese friends, they absolutely hate it if just a little money is wasted.


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="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

More by Bertel Schmitt

Comments
Join the conversation
2 of 25 comments
  • Saabista63 Saabista63 on Aug 08, 2011

    @Bryce, Makuribu et alii: Whether the story of SAAB is a sad affair or not will be determined by the end of the story. Whatever you read - and I've read about dead corpses and/or Zombies so often that I can't even remember - one thing is crystal clear: the end of the story may be near or not, but it certainly has not come yet. Before we know the ending, we can't say if it's sad or happy or whatever. The rest is speculation - some of it on a very, very professional level (thanks to Bertel Schmitt), some of it on a repeating-a-bad-joke-untll-not-even-the-one-who-tells-it-thinks-it's-funny-anymore-level. Admittedly, speculation can be fun, and it can be fun to be proved right by the facts. Some people make a living on that - at the races.

  • NorthwestT NorthwestT on Aug 08, 2011

    If you had been to Wolfsburg, you wouldn't think it was anything to envy.

  • The Oracle Well, we’re 3-4 years in with the Telluride and right around the time the long term durability issues start to really take hold. This is sad.
  • CoastieLenn No idea why, but nothing about a 4Runner excites me post-2004. To me, they're peak "try-hard", even above the Wrangler and Gladiator.
  • AZFelix A well earned anniversary.Can they also attend to the Mach-E?
  • Jalop1991 The intermediate shaft and right front driveshaft may not be fully engaged due to suspected improper assembly by the supplier. Over time, partial engagement can cause damage to the intermediate shaft splines. Damaged shaft splines may result in unintended vehicle movement while in Park if the parking brake is not engagedGee, my Chrysler van automatically engages the parking brake when we put it in Park. Do you mean to tell me that the idjits at Kia, and the idjit buyers, couldn't figure out wanting this in THEIR MOST EXPENSIVE VEHICLE????
  • Dukeisduke I've been waiting to see if they were going to do something special for the 60th Anniversary. I was four years old when the Mustang was introduced. I can remember that one of our neighbors bought a '65 coupe (they were all titled as '65 models, even the '64-1/2 cars), and it's the first one I can remember seeing. In the '90s I knew an older gentleman that owned a '64-1/2 model coupe with the 260 V8.
Next