Our Daily Saab: Bankruptcy Filing And A Hat Trick
The white-collar unions Unionen and Ledarna filed bankruptcy petitions today against Saab, everybody from Associated Press to inside.saab reports. On the same day, Saab announced that it had licensed its PhoeniX architecture to China’s Youngman at firesale prices – a move that could possibly buy another month or two. But first things first:
The Vanersborg District Court confirmed that Unionen and Ledarna took bankruptcy action against Saab, and that a bankruptcy hearing will be held within three weeks. According to a court spokesperson, Saab has to prove at the hearing that it has the money to pay the bills. Alternatively it can delay things for another two weeks if it can show that money is on its way.
Saab can avert bankruptcy by having its bankruptcy protection application approved on appeal, or by finding new money before the bankruptcy hearing. If not: BANKRUPTCY.
Saab is nervously drumming the table, hoping for a €245 million ($344 million) cash infusion from China’s Youngman and Pang Da. This is hinging on approval from the National Development Reform Commission (NDRC) which is not famous for its swift action.
To tide Saab over once again, Victor Muller reached deep into his hat and found another rabbit: According to a press release, Saab sold a non-exclusive license of its PhoeniX platform to a Dutch Special Purpose Vehicle called Swedish Automobile coöperatief U.A. (SPV) for €70 million. A Special Purpose Vehicle is no car, it is a company created for a narrowly defined purpose, in this case to hold the PhoeniX license. Apparently, this license is transferable. According to the release, “Youngman has also signed a technology license transfer agreement with the SPV on purchasing the license and providing a guarantee for its payment of the license.” The price Youngman paid was not released, but something in the neighborhood of €70 million would be a good guess. Maybe a little more. Management fee.
Judging from the oblique language of the press release, this whole sale and licensing business is nothing else than a security for a loan that will probably be coming from Youngman. For €70 million, that’s bupkis in the car business, Youngman got its hands on technology that was scheduled to go retail by 2013. This is probably the first time a Chinese manufacturer gets plans and license to a car years before it goes on sale in the West. For only €70 million. Reuters isn’t completely convinced and writes that Saab “conjured up a promise of 70 million euros ($96 million) in vital financing.”
Those rabbits better have at it in the hat: Everybody who is owed anything will race to the bankruptcy court and file their claim. Looking at the mid-term balance sheet, there were liabilities of over €1.4 billion. Oooops. Someone have a rabbit farm?
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.
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Another day another Saab story. Time for a sobb story: http://www.youtube.com/watch?v=wZdMbdWX0IA
You get weird stuff in the rental fleet. A few years back, the Car lot at Billings, MT was full of infiniti. We got a FX35 with the nice high po six cylinder. The massive Infiniti truck was also rented out. These weren't special or custom.... I don't know if this addressed some production vs. sales issue, or was a "high speed real world conditions" test by Nissan. It sat nicely at 90 on the montanabahn, if thirsty. I had a 900 Classic Turbo. It was fast, frugal and well constructed for the time. The 9-3 (nee GM) was the same flavor, but the Classic was a few inches bigger in all dimensions, violating the unwritten car manufacturer's rule that three inches of back seat room and front seat width cost an extra $10,000.00. The Classic was in many ways an "un car", a spiritual twin to the Volvo 240. Shame about the transmissions though. The 9-3 lasted 180k, at which point I sold it. We still see it around town occasionally. Sadly, saab spent the last few years as the car you leased (few were bought-when GM stopped leasing them one of our local dealers went from 20 units a month to 2, per a claim in a local business newspaper) when you couldn't or didn't want to spend BMW/MB money but wanted something euro and different.