Our Daily Saab: Do Not Resuscitate Order Rescinded

Bertel Schmitt
by Bertel Schmitt

Saab is on court ordered life support. On appeal, the Court of Appeals for Western Sweden has approved Saab’s request for protection from creditors. Saab can now attempt a business reconstruction without the threat of imminent bankruptcy, The Local reports.

The probably most significant part is that Saab does not have to maintain payroll, while unpaid workers can apply for generous Swedish unemployment benefits. A lower court had previously denied an application for protection from creditors.

The Vänersborg District Court will appoint an administrator that oversees the process. Saab is now hoping that China’s NDRC will be getting off their duffs and approve an equity and joint venture engagement on Youngman and Pangda – which under the current climate becomes doubtful.

China’s car growth has slowed, mostly at the cost of the smaller independent makers. They had been a thorn in the eyes of the big, usually government-owned carmaker which are connected to foreign companies via joint ventures. The Chinese government has been calling for a consolidation for a while. There is no need for another new, and in China largely unknown brand.

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.

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  • Akear Akear on Sep 22, 2011

    GM just raided the company and left them to die.

    • Mike978 Mike978 on Sep 22, 2011

      How do you come to that conclusion? The new 9-5 is based upon the Opel Insignia. They were not raided. They were unsuccessful for many years. Someone else bought them 2 years ago - not GM's fault. The 9-4 is also based upon GM architecture and looks pretty good, shame it won`t sell very well now.

  • Trollhattan Saab Trollhattan Saab on Sep 22, 2011

    Bertel, there's a part of this article that you might do well to correct. "The probably most significant part is that Saab does not have to maintain payroll, while unpaid workers can apply for generous Swedish unemployment benefits." Under a reorganisation granted by the court, employee wages and salaries will be paid by a government scheme set up for these exact circumstances. The amount paid to employees under this scheme will have to be repaid by Saab once the company exits from reorganisation. Call it a loan, call it a deferred scheme if you must. But it's not that the company doesn't have to pay for employees at all. it's just that they don't have to be paid by the company right now. Saab will pick up the tab later. That gives certainty to employees and the company a clearer path to re-starting production sooner. Swade inside.saab.com

    • See 1 previous
    • Bertel Schmitt Bertel Schmitt on Sep 22, 2011

      A tip from a veteran of the car propaganda field to a budding veteran: Attempts to influence editorial content by PR flacks is usually frowned upon. Public attempts to do so are a sign that the PR Flack 101 course has not been successfully completed. No, we won't take the yellow Rolls story down, and no, this story will not be changed. Material errors will be corrected. There is no material error in the sentence "Saab does not have to maintain payroll, while unpaid workers can apply for generous Swedish unemployment benefits.” Whether Saab will pick up the tab later remains to be seen. Please let me know when this is the case, and it will be dutifully reported.

  • MOSullivan MOSullivan on Sep 22, 2011

    The Chinese companies were to pay 245m euros for a piece of Saab. Most of it would be needed to pay past due bills. Clearing debts won't make Saab a viable company. It would then need serious money to recapitalize, restart operations and carry it through a period of losses. It quickly went bust on 30k cars a year. The order book of 10k-11k points to resumption of losses as soon as it restarted.

    • See 2 previous
    • MOSullivan MOSullivan on Sep 22, 2011

      @gt40fan It wasn't the Swedish government that approved the application, it was a court. I would be very surprised if the court was communicating with the NDRC. The court presumably decided what it did based on Saab's application and supporting materials. We don't know what they were. Unfortunately Muller has said lots of things that have proved unduly optimistic. I was only trying to point out that even if the 245m euros turns up it won`t be enough to salvage Saab. I don`t know what the long term intentions of Youngman and Pang Da are. Perhaps they are willing to kick in the billions of euros Saab would need to be viable or perhaps they wouldn`t. It`s all speculation.

  • Wheatridger Wheatridger on Sep 22, 2011

    Thanks for keeping us posted in this SAAB saga. You're drilling deep into the political economics of this case, but when can we talk about the product? The question of whether ailing firms should be rescued is pertinent and significant, but I'm tired of it. And the editorializing-- you sound a little like the GOP debate audiences whenever phrases like "pull the plug" and "death penalty" are mentioned. I'm looking for a car, as it happens. A small wagon or large hatchback, much like the SAAB 9-3 sportwagons sitting on the lone dealer's lot here in Denver. Past experience with orphaned autos and SAAB 9000s keeps me at a safe distance, but you wonder about the deals to be had. I'd really like to know, like two other correspondents here, what's your prediction for that ownership experience? How about parts supply, and prices? Depreciation? The collapse of such an innovative independent marque is a big story indeed. So how about taking it down to street level?