Our Daily Saab: Chengdu Noodles

Bertel Schmitt
by Bertel Schmitt

There was no better place to clear up some questions about Saab than in Chengdu. After all, nowhere can you find the CEOs of all major Chinese carmakers and government officials all under the same roof, or even at your dining table. There also was no better place to get entangled in the messiest web of facts and fiction. Here is some local color:

When on stage, nobody made any public announcements or mentions of Saab. Even when a lone moderator of a group discussion dared to say that “Saab certainly is a hot story,” he was ignored by Pangda’s chairman Pang Qinghua, who was one of his panelists.

Did I say no one? I lied. Representatives of BAIC, from Chairman Xu Heyi on down, never missed a chance to weave Saab into public comments. It was usually branded as “cooperation.” Once, the “cooperation” mutated to “joint venture,” but that could have been a slip of the simultaneous translator. BAIC had bought tooling of previous generation Saabs, and appears to be quite happy with what they received.

Any remarks coming from Chengdu were made, as they say, “at the sidelines of the conference.” When Chairman Pang had said “now that Saab is in bankruptcy protection, all previous pacts are invalid. It’s up to the court to decide. It can also find a new partner,” he had said it. The quote still sits on the little black recorder Reuters reporter Fang Yan had stuck in Pang’s face. There was no room for a “misunderstanding.” Both are Chinese and literally saw eye-to-eye. The later “what I meant …” correction was no correction. It was damage control.

Interestingly, Chairman Pang was the lone Chinese voice that warned against introducing new brands to a China that already is knee-deep in brands. Ever the boss of a car dealer, he warned that new brands require huge investments (also) from dealers, that customers treat unknown brands with suspicion and reservation, and that his dealerships don’t have the room to show all these new brands. Those were not the words of someone who is about to introduce another unknown brand to China. Saab has no brand equity in China.

When word spread that Youngman had (finally) sent money to Saab, it was quickly noted that nobody had said when, how much and for what. On Wednesday, Youngman had denied any comment. Conference participants were divided in their comments. Some called it downright “crazy” to send money to Saab under the circumstances. Some noted that paying a little money, even if it is paid for not completely clear intellectual property, establishes an interesting legal position that could take many years to challenge, especially in a Chinese court. Intellectual property cases already tend to be lengthy. By the time it is sorted out who bought what, who cheated whom, and who misunderstood when, that PhoeniX platform probably will be ready for cremation.

As for the NDRC decision, there was no one at the conference that would not have questioned the sanity of a person that hopes for an impending decision. People who have seen the NDRC in (in-)action suggest immediate medical care when someone thinks that the NDRC will approve the Saab deal within days, or even months. At a conference that was very serious, predictions of quick NDRC action always was good for laughs. It’s the end of October 14 in China, for when a decision of the NDRC was expected and predicted. There was none.

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  • MOSullivan MOSullivan on Oct 14, 2011

    Wouldn't any payment from Youngman be the loan secured by the Phoenix platform? If Youngman wants the technology it has to make the loan. The question is whether it wants Saab or Phoenix. If Saab needs 1-2 billion euros to make it a viable company (assuming there are buyers for its vehicles) are the Chinese companies able and willing to kick that much in? The Youngman web site avoids financial information like it's radioactive. The Pang Da site says it had "35.5 billion of income, 1.01 billion profits" last year. If that's renminbi it's approximately 4.3b euros and 121m euros. Pang Da doesn't have deep pockets and Youngman is a closed book. Perhaps more investors could be found but there's a limit to the number of interests trying to steer the company before it becomes unmanagable.

  • Charles T Charles T on Oct 14, 2011

    Sounds like Pangda is getting bearish.

  • Sayahh Is it 1974 or 1794? The article is inconsistent.
  • Laura I just buy a Hyndai Elantra SEL, and My car started to have issues with the AC dont work the air sometimes is really hot and later cold and also I heard a noice in the engine so I went to the dealer for the first service and explain what was hapenning to the AC they told me that the car was getting hot because the vent is not working I didnt know that the car was getting hot because it doesnt show nothing no sign no beep nothing I was surprise and also I notice that it needed engine oil, I think that something is wrong with this car because is a model 23 and I just got it on April only 5 months use. is this normal ? Also my daughter bought the same model and she went for a trip and the car also got hot and it didnt show up in the system she called them and they said to take the car to the dealer for a check up I think that if the cars are new they shouldnt be having this problems.
  • JamesGarfield What charging network does the Polestar use?
  • JamesGarfield Re: Getting away from union plantsAbout a dozen years or so ago, Caterpillar built a huge new engine plant, just down the road here in Seguin TX. Story has it, Caterpillar came to Seguin City council in advance, and told them their plans. Then they asked for no advanced publicity from Seguin, until announcement day. This new plant was gonna be a non-union replacement for a couple of union plants in IL and SC, and Cat didn't want to stir up union problems until the plan was set. They told Seguin, If you about blab this in advance, we'll walk. Well, Seguin kept quiet as instructed, and the plan went through, with all the usual expected tax abatements given.Plant construction began, but the Caterpillar name was conspicuously absent from anywhere on the site. Instead, the plant was described as being a collective of various contractors and suppliers for Caterpillar. Which in fact, it was. Then comes the day, with the big new plant fully operationa!, that Caterpillar comes in and announces, Hey, Yeah it's our plant, and the Caterpillar name boldly goes up on the front. All you contractor folks, welcome aboard, you're now Caterpillar employees. Then, Cat turns and announces they are closing those two union plants immediately, and will be transporting all the heavy manufacturing equipment to Seguin. None of the union workers, just the equipment. And today, the Caterpillar plant sits out there, humming away happily, making engines for the industry and good paying jobs for us. I'd call that a winner.
  • Stuki Moi What Subaru taketh away in costs, dealers will no doubt add right back in adjustments.... Fat chance Subaru will offer a sufficient supply of them.