Our Daily Saab: The Chinese Deal

Bertel Schmitt
by Bertel Schmitt

At Saab, which is working (well, not really working) under court protection from creditors, the big question is: “Did the money come in?”

The money is the €70 million ($93 million) promised by the Chinese bus manufacturer Youngman as a bridge loan. Saab needs cash desperately. Court protection means no new loans. Cash is king. No cash has arrived from China. Saab is not the only party in Sweden that is waiting for answers from China. Sweden’s National Debt office is waiting for answers also. Let’s have a look.

Reuters reports that Saab “has not yet received the 70 million euros ($93 million) worth of bridge financing it needs to survive while it restructures under court protection. This according to Saab spokesman Eric Geers who told Reuters:

“The money has not come in yet. We originally thought it would take about two weeks. The process is ongoing, and we will give information as soon as we have the money. It is hard to say exactly when this process will be finished. But it will be soon.”

The loan is in exchange for a non-exclusive license of Saab’s (unfinished) PhoeniX platform. The money was expected by September 25, but it’s not here. Not much will happen in China this week. It’s the October holidays where anybody who is somebody in China celebrates the birthday of the PRC by traveling to the beaches of Thailand, or shopping in Tokyo. The only one seemingly left is your solitary scribe.

Also waiting for word from China is Sweden’s National Debt Office. They want to reach an opinion on Youngman, needed to approve a $320 million investment into Saab. For that, the NDO needs financial information. Said Anna Petre of the National Debt Office to Dagens Industri:

“It is slow. A family-owned Youngman is not accustomed to disclose sensitive information about economic figures such as sales and profits. I asked to get revised financial statements from them. And they asked what I mean with ‘revised.’ They work in different ways than we do.”

I can only imagine the terror that request caused at Youngman. Many Chinese companies don’t even publish a list of their products out of fear that the competition will find out what they have. A foreign government agency asking for an updated P&L? Horrors! Everybody, hide!

That information is crucial. Dagens Industri says:

“By the end of this week, the information must have reached the Debt Office to enable it to make a decision before 14 October. This is when a decision is expected from China to allow Youngman and Pang Da to invest $320 million and become the majority owner of Saab.”

By the end of this week people start coming back from vacation in China. Slowly.

Saab’s schedule, as compiled by Dagens Industri, is tight, very tight, and it does not allow for the customary Chinese delays. Never negotiate with the Chinese while looking at your watch or calendar.

NDRC approval in two weeks? Sure.

I don’t have Victor Muller’s balls.

If that timetable would apply to me, I’d stay in Thailand, and buy a new phone.

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.

More by Bertel Schmitt

Comments
Join the conversation
4 of 11 comments
  • Jeff_vader Jeff_vader on Oct 06, 2011

    Its being reported this morning by the Swedish newspaper Dn.se that Youngman are out and Geely are asking both the NRDC and Saabs administrator about replacing them. Talk about last minute.

  • Paul W Paul W on Oct 06, 2011

    "... or shopping in Tokyo." Since when did it not become a MAJOR hassle for a Chinese citizen to get a Japanese visa, especially for something like a little shopping trip?

    • Bertel Schmitt Bertel Schmitt on Oct 06, 2011

      Get with the program. Chinese tourists are in high demand in Japan. Announcements in department stores are in Japanese and Chinese. There are stores in Akihabara that have only 220V equipment, sold by Chinese sales folk to Chinese. Visas to Japan are handed out like candy to any Chinese with a job and a credit card. It's easier to pull money out of a Japanese ATM with a Chinese Unionpay card than with a Citicard. I am a regular commuter on the Peking-Tokyo route, flights are frequent and full.

  • Carson D I hadn't seen a second-generation Courier with a Mazda engine before. I've seen a few with Ford engines. There was one at the Cox Driving Range that they used to collect golf balls. Golf would definitely be more entertaining to watch if they used moving targets.
  • Tassos ooops, Tim, you missed this one. Would make a lovely "Tim's used car of the day". It satisfies all the prerequisites except the wildly overpriced bit.
  • Tassos ASTON AND BOND BY A MILE. While Aston Martin sells a TINY FRACTION of what even the rarified Ferrari and Lambo sell, it is unbelievably well known. Credit the idiotic, but hugely successful and sometimes entertaining James Bond Movies.
  • Tassos 1988? Too young for me. It's all yours, Tim... BAHAHAHAHA!
  • Gray Awesome. Love these. But, if I had the money for a Fox-body, there is a clean '84 GT 350 here for little more than half the price.
Next