By on September 21, 2011

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.

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29 Comments on “Our Daily Saab: Do Not Resuscitate Order Rescinded...”


  • avatar
    TrailerTrash

    Here is what I say…Go for it, Sweden!

    OK…so today Sweden finds itself with a little bit of money.
    They are keeping their nation’s money from the hell of the Euro and have decided NOT to continue to support the crap going down in Europe.
    So they are pulling back and looking for ways to use this huge pile.
    OK…spend it on YOUR industry, your country.

    I say it is all good. Do NOT try to fix Italy or Greece…you ARE better off fixing one of your own.

    So force reorganization. Force a new design direction and management or engineering.

    So who cares? This has to be better than betting the garbage driver in Athens will submit to reason, right?

    I say it is all good!

  • avatar
    GS650G

    Has SAAB tried The White House for a few billion? it’s not like we would actually notice a few hundred million dollars being pi$$ed away in a foreign country these days. It can be easily justified by saying if we don’t bailout the Swedes they might resort to violence and not like us anymore.

    I’m waiting for the plan that details how they are going to get customers to spend money on product. The best way to actually have a company is to make money, although lately auto makers are seen as entities and extensions of the public instead.

    • 0 avatar
      TrailerTrash

      You do understand that Sweden is chock full of money.
      In fact, IF you are looking for areas to invest…the north of Europe is a very solid market.
      I applaud the Swedes for their position.

      And I think the move is good IF they can reinvent the company.

    • 0 avatar
      HerrKaLeun

      well, giving money to Sweden would be a better investment than giving Pakistan billions of $ to help us catching bin Laden (they helped catching him, just forgot to tell they had him…)

    • 0 avatar
      GS650G

      Plenty of places are full of cash and resources but we still give millions. Sweden happens to be more culturally aligned with ours than most so I’m OK with my children’s future being sent there.

  • avatar

    It’s just prolonging the inevitable. It’s highly doubtful the Chinese investors will be approved and without them there’s no one left except the Swedish government themselves.

    It looks like I’ll be sitting on the sidelines waiting for bankruptcy to find out what will really happen to new Saab warranties and the real fire sale.

    I’m looking at 9-4s and 9-5s right now but I would like to know if there will be money to cover warranties when Saab goes under or if people who buy them will end up getting Daewoo’d.

    • 0 avatar
      Seán Moloney

      “It’s highly doubtful the Chinese investors will be approved” People have been saying this over and over and over again. Victor Muller is not an idiot, the CEO of Pang Da is not an idiot, and the CEO of Youngman is not an idiot. If they didn’t believe that this deal would come to fruition then they never would have started the process. I think that these people know a little more about the automotive industry then you, being CEO’s of a few sizeable companies and all. Further to this, the application has been approved at the local and regional offices of the Chinese NDRC, and from reports coming out of Beijing, there is no indication that the national office would deny the application. But we will see the approval or denial in a month or two I’m sure.

  • avatar
    saabista63

    Being surprised myself, I can imagine this also comes as a little surprise to the zombie-watchers on TTAC.
    Of course, it’s just “prolonging the inevitable”.
    There is no doubt at all “that the Chinese investors can’t be approved”. By who, I’d like to know?

    Of course, this is not the moment to rejoice. SAAB is still in a precarious situation. But most surprisingly, it is a lot less precarious than the more realistic saabistas might have thought on Monday.

    So, with a little breath of relief, let me give expression to my hope Bertel Schmitt will have to write about SAAB again – and again. I’ll be a devoted reader – I promise!

    • 0 avatar
      plattform

      So true Saabista. If the NDRC approves the deal on Saab, Pang Da, and Youngman’s timetable (sometime in October), I wonder what BS’s excuse will be for being wrong about nearly every step of this process? The only thing dead will be his credibility as a Chinese market expert :)

      • 0 avatar

        Even if all of that happens it does nothing for Saab’s sales or high production costs, which are what put it here in the first place. To be a viable entity people have to want and purchase your products. I don’t mind joining the Saab fold and like the current crop under GM, but I have no illusions about the company. I’m just a little worried if I get a lemon that needs Swedish parts that I could be up a creek. I’m also thinking the prices of the vehicles will continue to fall as this drags on and they produce less and less and dealers bow out.

      • 0 avatar
        plattform

        Trishield, you’re as well read about Saab as anyone on the internet, you seem to post on every single news item about them on the net. Surely with that informed opinion you’d have seen that Pang Da and Youngman plan to invest hundreds of millions of Euros to stabilize the company, while using the modular phoenix platform to build a whole new range of cars. The technology is there. Once the money is there to prop it up, and the legacy costs of the dead wood is cleaned out of the company as Saab announced they’re doing in their press release, you’ll see an even leaner company that can handle the swings of the market, while the Chinese Joint Venture provides the volume sales needed to give long term financial stability to the company. There’s plenty of reasons for optimism, it’s a very sound plan. It’s not like Saab is shacking up with unproven auto companies in China, they’re with the country’s largest dealer group and largest bus company. Not exactly slouches.

      • 0 avatar

        They’re going to need serious marketing (not unlike the kind bestowed on Chrysler brands under Fiat) to rebuild their image in addition to new products. I actually think the product is there now, the 9-4 and 9-5 are true sweetheart vehicles but still bear a brand name most people wouldn’t pay the asking price for. If they survive it’ll be interesting to see what does happen productwise.

    • 0 avatar
      Pig_Iron

      Hoping for the best for SAAB and all concerned.

  • avatar
    philadlj

    I’d really like to see Victor Muller personally get out of a limo and march up to whatever building serves as the headquarters for the NDRC, knock on the door, and not leave until he gets an answer from them one way or another. One man against the implacable bureaucracy. Sure, he’d probably get arrested on the spot, but no one could say he didn’t try! Is he even sure the NDRC received the paperwork? Do they have a twitter account for customer service? C’mon now.

  • avatar
    cfclark

    I can’t be the only one who sees “Youngman” in these articles and thinks, “take my bankrupt Swedish car company–please!”

    (Thanks, I’ll be here all week!)

  • avatar
    obruni

    Saab is trying to launch the 9-4X in Europe WITHOUT a diesel option.

    pure, unadulterated fail.

  • avatar
    saabista63

    obruni,

    the 9-4X is primarily aiming at the American and Asian markets, where a diesel option is not what the majority of purchasers are going for. As we all know, the 9-4X is built in a GM facility in Mexico, and it is quite likely GM who decided years ago whether a diesel engine will be installed into these vehicles or not. For SAAB, the costs to adapt the drivetrain for a rather limited number of cars – because the 9-4X even WITH a diesel option would be a niche car in the SUV-range – quite likely do not match the slightly better market chances at all – EVEN IF the owner of the production facility (which is GM) would agree to the necessary changes to the production.

    • 0 avatar
      jeff_vader

      As far as I’m aware Audi don’t consider the Q3 or the Q5 as a niche car. In fact try ordering one in the UK at the moment and see what kind of deliivery time you are quoted for a factory build. But over 70% of those being ordered are diesel. For Saab to be ignoring such a large market as Europe (in fact up until 2 years ago the UK was Saabs second largest.) is commerical suicide. Dealers in the UK were saying that the car must have a diesel option even before GM pulled out.

      Remember Saab will make every dealer register at least one in the UK, will throw money they hardly have behind its promotion and order them to send staff on expensive training courses. The whole situation with the 9-4X reminds me of the UKs experience with the Nissan Cube. Great selling car in Japan but to everyone in the UK it looks exactly like Postman Pat’s van (Childrens TV programme in the UK, google is your friend.).
      Result? Sales disaster, no one buys it, dealers have to sell off their demos at £4k off, Nissan take it back off the market within a year.
      Nissan can swallow that (just). Not sure that Saab can.

      P.S. When did the Nissan Murano start selling in European markets? When it was re-launched with a diesel.

  • avatar

    GM just raided the company and left them to die.

    • 0 avatar
      mike978

      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.

  • avatar

    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

    • 0 avatar
      jeff_vader

      That certainly is the case within Swedish law. However, just this morning SWAN announced ‘Operation Cheetah’ where “Saab might have to decrease the amount of employees at the company now that the reconstruction work has started”. So I would imagine that this will start asap so as when the invoice comes in from the government it will be reduced some what.
      It seems a shame that the Unions didn’t move a little quicker in filing their bankruptcy petition now because if the company had gone, under Swedish law the government would have paid the workers wages for three months anyway. Now some of those same workers will be lucky to see one months salary after not being paid by the company for nearly two and still be out on the street. Still that’s where loyalty gets you in the motor industry these days…

      Saab has one vehicle that no-one has wanted for over three years (9-3), one vehicle that according to most reviewers is already out of date compared to its prinicpal opposition (9-5) and one vehicle that because it has no diesel option will be virtually unsellable in the European marketplace (9-4X). To talk of “it will all be great when the new 9-3/PhoeniX platform arrives” is wonderful but what are they going to sell outside of China til then?

      The basic problem with Saab is that the cars aren’t good enough and haven’t been for some time, no-one knows what the brand stands for anymore & its got to the point now where no-one outside a few saabistas on a couple of fan sites actually cares.

      There are too many cars being made in the world for too few customers. If you make a product no-one wants to buy then you should be allowed to die with diginity, not stagger on like some bad-guy in a Julia Roberts movie who won’t stay dead.

    • 0 avatar

      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.

  • avatar
    MOSullivan

    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.

    • 0 avatar
      gt40fan

      Think of the 245mm Euro as an entry fee into Saab. Youngman and Pang Da know what they’re doing…They know it will take A LOT more $$ to get Saab rolling. I’m not so ignorant to think that the ownership stake won’t shift shift considerably toward Youngman / Pang Da. The 53% combined ownership will likely be significantly increased to where they have controlling interest (individually, not combined). Youngman seems to be in the best position to assume that role.

      Another way to look at this whole thing:
      Do you think the appeal to reorganize would have been approved if Sweden got the feeling that the Chinese NDRC was doubtful on approving the JV after their meeting?
      I think the approval of the reorg is a very good indication of what the NDRC will say come November.

      • 0 avatar
        jeff_vader

        I’m sure it is a good indication. But some might say that Peugeot having to wait 6 months for approval for their JV is another good indication. If thats going to be the case with Saab, that will be far too late to save the company.

        And talking about saving the company, whatever happened to The Endevour Group who were supposed to be riding over the horizon with extra investment by the end of last month? Who now owns the factories now that have been mortgaged up to the hilt with an outside contractor? Who now owns all the tooling? Whats the story with the inter-company loans between Saab Cars, Parts & Tools? Why would it appear that no funding was ever recieved when Spyker was ‘sold’ to CPP Global Holdings Ltd? What will happen if Saab AB (the aircraft company) decide they want the rights to the brand back, especially if the company is sold in full to the Chinese? Why were such bonuses paid to the board of Spyker for ‘consulting work’ last year when the company was in trouble then? Where are Saab going to get the seats for their cars now Lear have closed their factory in Trollhatten due to non-payment of invoices? The last two batches of cars that came down the production line and were showed off so proudly on youtube (one as recently as the end of last month); why were they lifted off the line on fork-lifts and not driven off like any other manufacturer?

        And now the latest one, why have the rights to the PhoeniX platform been sold to Youngman/PangDa via a holding company registered in the Ukraine? And have the directors of that company got any links to any other companies apart from PangDa/Youngman that have been involved in this soap opera?

        All these questions to be answered and that’s before you get to the big one; How are they ever going to sell, within the next three years, enough cars to make the company even solvent, let alone recover any losses?

        But as I said on the post above, I don’t think the consumer actually cares anymore.

      • 0 avatar
        MOSullivan

        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.

  • avatar
    Wheatridger

    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?

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