Our Daily Saab: Are These People Serious?

Bertel Schmitt
by Bertel Schmitt

Yesterday, we reported that Saab was waiting for some $93 million to arrive from China. The matter has not changed. Now, people on the inside get the impression that yellow knight Youngman wants out. This morning, Swedens’s Dagens Industri cited an inside source that says that Youngman wants out, and another Chinese maker wants in. Yeah, sure.

Youngman had agreed to give Saab the $93 million in exchange for production rights to the PhoeniX platform. Money is needed to tide Saab over while they are in reorganization. During that time, no new liabilities may be incurred, said Dagens Industri yesterday. The money was promised for end of September. It has not arrived.

An inside source cited by Dagens Industri expressed its wonderment about Youngman:

Without the promised money from the Chinese, there could be a breach of contract. The fact that the money is delayed suggests that Youngman may no longer be interested in Saab. Are they even serious?”

What also is in doubt is that China’s NDRC will approve the deal on time. On that, Dagens Industri got ahold of one of the best experts available: Bengt Hamsten. The Swede is a professor of Mechanical Engineering at the Chongqing University in China, was CEO of the MAN Truck and Bus division in China, and member of the board of directors of MAN Nutzfahrzeuge. Hamsten knows Youngman’s owner, who wanted Hamsten as a director of Saab once the deal is consummated.

Saab’s wishful calendar said NDRC approval would come by October 14. No way, Hamsten says to DI:

“I do not think that the NDRC will render a clear decision on 14 October. There will likely be a partial decision that may untie some knots, but not all. “

Government support is needed above and beyond an NDRC decision. Hamsten doubts that Youngman has the money needed to develop Saab:

“No, they do not, even Geely did not have the money to buy Volvo Cars by themselves. These guys are not billionaires, they get money by bringing in partners such as the provinces and the Chinese government.”

Someone who was picked as a director by Youngman is willing to have his name in the paper while dispensing doubt. He doesn’t seem to think the job is still available.

As Youngman becomes doubtful, other rescuers are being floated. The source familiar with the matter told Dagens Nyheter that Volvo owner Geely has shown interest in Saab. This hit the Dow Jones Newswire ( via Fox News) and immediately made the rounds. “According to the paper’s source, Geely has shown “genuine interest” in the carmaker and contacted lawyer Guy Lofalk.” A little later, Dow Jones called up Geely, only to hear from its executive director Lawrence Ang: “We have no interest in acquiring Saab.” Scratch that one. Geely already has Volvo. They don’t need a Saab.

The trotting-out of Chinese suitors has become routine in these soap operas. People who know the Chinese (and Hamsten does) know that they are very reluctant investors. Investing in foreign companies doesn’t have a rich tradition in China. They are used to foreigners bringing money. Giving money to foreigners is still a bit alien.

There is one problem few want to admit: Saab cannot be saved with a few hundred million. It takes many billions that probably are invested better elsewhere. Just to develop one car can cost a billion bucks. GM brought more to the table than money. They had platforms, engineering, a bank, a distribution network. Nevertheless, they failed.

Of course, say the faithful, GM failed because they did not know what they were doing. And the people who are in charge now do?

Postscript:

“Again, I don’t think we should be too worried about either of these issues, just that this is what is going on behind the scenes yet reported publicly. There’s also a healthy amount is going on that we can’t really report on that gives us enough confidence not to report on this story as breaking news.”

(Final chapter of a long article on the matter, appearing today in fanzine Saabsunited. )

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  • Sen Moloney Sen Moloney on Oct 07, 2011

    GM didn't fail because they didn't know what they were doing. GM failed because they didn't DO anything. If GM was serious about making Saab a true competitor to BMW Audi and Mercedes they would have allowed Saab to develop new models. Saab 900 1993-1998, This car was based on an old Opel platform from the 80's Saab 9-5 1997-2009, Again based on old Opel platforms Saab 9-3 1998-2002, Nothing but a face lifted 900 Saab 9-3 2002-Curent, the first time GM actually invested any kind of money into Saab. And it showed, Saab had it highest selling year at the beginning of this model selling what I think was around 130,000 units. Saab 9-3x 2009-Current, Saab had the 9-3x near ready in 2006 when the 9-3 SportCombi was launched, however GM canned it deciding that the Epsilon platform would not get XWD (AWD), only to back flip in 2009 when the 9-3x was finally launched. Saab 9-5 2010-Current, In actual fact Saab had an all new 9-5 ready to go in 2005. GM however, put it on hold, instead opting for a cheaper facelift for the already 9 year old 9-5. But the 2010 Saab 9-5 shows that GM could have done well with Saab, sure it might not be the best car around. But give it a few tweaks here and there and it could very well be worthy of being a competitor to the German 3. Saab 9-4x 2011-Current, Again this shows that GM could have done wonders with Saab. People say that the 9-4x is nothing but a Cadillac dressed up. Well the guy who developed the Cadillac and the Saab worked for Saab at the time. Of course Cadillac got to launch theirs first, after all its American and is therefore one of GM's golden children. Oh and lets not forget about GM's laughable American exclusive Saab's. 9-2x and 9-7x, because that was pure engineering genius. In the land of academia we call that plagiarism which would result in an automatic F GM did nothing to help Saab, and by the time they realised that they needed to develop new products to help keep the company modern and competitive the global financial crisis hit and well here we are. Will Saab succeed to realise its full potential? Only time will tell. GM however is an old, slow moving dinosaur, their time has passed. In terms of big automotive groups Volkswagen is the way of the future.

  • Jeff_vader Jeff_vader on Oct 07, 2011

    I'm becoming increasingly convinced that Muller's actual plan is to confuse everyone so much, that Saab will stagger on because nobody will be bothered enough to wade through all the red tape & dis-information. ttela (Trollhattens local newpaper.) is today saying that the Geely deal is still a goer. Saabs Untied say that they have talked to Youngman and the Chinese company's spokesperson has no idea where the story about them wanting to drop out has come from. DI is now reporting that the government are thinking about helping out Saab. Unsurprisingly Saab/SWANs share price has leapt 16% this morning and is now trading at over one euro for the first time in months. Round and around it goes, where it stops only Muller knows...

  • ToolGuy Seems pretty reasonable to me. (Sorry)
  • Luke42 When I moved from Virginia to Illinois, the lack of vehicle safety inspections was a big deal to me. I thought it would be a big change.However, nobody drives around in an unsafe car when they have the money to get their car fixed and driving safely.Also, Virginia's inspection regimine only meant that a car was safe to drive one day a year.Having lived with and without automotive safety inspections, my confusion is that they don't really matter that much.What does matter is preventing poverty in your state, and Illinois' generally pro-union political climate does more for automotive safety (by ensuring fair wages for tradespeople) than ticketing poor people for not having enough money to maintain their cars.
  • ToolGuy When you are pulled over for speeding, whether you are given a ticket or not should depend on how attractive you are.Source: My sister 😉
  • Kcflyer What Toyota needs is a true full size body on frame suv to compete with the Expedition and Suburban and their badge engineered brethren. The new sequoia and LX are too compromised in capacity by their off road capabilities that most buyers will never use.
  • ToolGuy Rock crushes scissors, scissors cut paper, paper covers rock, and drywall dents sheet metal.
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