By on November 4, 2011

While the flagwavers at Saabsunited wallow in the good news that the Swedish king announced at an annual moose hunt near Trollhättan that Victor Muller is a great guy, far away in Detroit, GM spokesman Jim Cain issued to Reuters what sounds like the death sentence to the sale of Saab to China’s Youngman and Pangda:

“GM would not be able to support a change in the ownership of Saab which could negatively impact GM’s existing relationships in China or otherwise adversely affect GM’s interests worldwide.”

The exactly same statement was sent to the Wall Street Journal, and GM will send it to anyone who asks what GM thinks of the deal. If Muller would have asked before announcing the sale, he most likely would have received the same answer.


In Shanghai, GM has a joint venture with China’s largest car company SAIC. A lot of the technology that is in current and future Saabs is in current and future Chevys and Buicks made by GM’s joint venture with SAIC. It is a good guess that GM’s existing relationships with SAIC could be negatively impacted if SAIC has to pay a lot in licensing fees for that technology, and suddenly a car dealer and a small busmaker from the middle of nowhere gets it for chump change. I can imagine that SAIC is adversely affected, make that mad as hell because of this. And if you are GM, you don’t want your partner in your most important market to be mad as hell. The Chinese media is already full of opinion pieces about SAIC’s unhappiness with the deal. These pieces don’t get written by themselves, they usually receive some encouragement.

GM sold 2.3 million cars in China last year, more than back home in the U.S. About a third of GM’s global sales are in China, with the trend going up. Without China, GM would be dead. GM depends on China and GM won’t jeopardize its future to help a small busmaker in China and a neardead Saab in Sweden. GM is happy to be rid of Saab. They don’t need that aggravation again. If I would be GM, I would do nothing, and Jim Cain just announced that GM will do just that.

The sale of Saab needs the go-ahead of GM. Any technology transfer needs a lot of go-aheads by GM. The Chinese want technology, free and clear. No technology, no deal.

Yesterday, Sverigesradio tracked me down in Japan and I had told them the above – minus the Jim Cain assessment which is just in. If  they will ever send the interview, it will be old hat, and Saab’s moose will be cooked.

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27 Comments on “GM Issues Death Sentence To Saab Deal With China...”

  • avatar

    I wonder if Saab fans will achieve the level of crazy reached by EV1 fanatics when GM killed their dream cars.

  • avatar

    well I guess thats the nail in the coffin for SAAB. Oh well another day another brand gone.

  • avatar

    Bertel – I agree with your logic, and with GM’s apparent self-protection on this matter.

    I think GM acquired Saab with their beer goggles on, but they’ve been pretty sober about Saab lately – good. Saab fans can try to blame GM, but Saab was in trouble long ago.

  • avatar

    Some of you may have read Edward Lapham’s piece in Automotive News this week where he almost eulogizes Victor Muller’s automotive career. He compares VM’s statement that the recent Chinese deal “secures the future of Saab” to Neville Chamberlain’s infamous “peace in our time” statement.
    With GM owning the technology behind the 9-5, 9-4X, and the current 9-3, we always knew that going forward, all Saab had was the Phoenix platform to build on. However, even the super-fans at SU admit that the Phoenix platform has some GM technology as well. Thankfully, my interest in Saab is with the pre-GM models. The current Saab situation can only be left to prayer.

    • 0 avatar

      “The current Saab situation can only be left to prayer.”

      The Kiwis agree with you on the religious aspect of raising the dead:
      Unless somebody has changed it, the headline read:
      “Chinese calvary rides in for Saab”

      (Hint: Calvary is not the same as cavalry.)

  • avatar

    To paraphrase the bard, I come to bury the Swede, not to praise him

    I currently own a copy of the first lovechild of the GM-Saab mashup, a 2003 Saab 9-3. Is it a great car? probably not. Will hordes of half-drunk middle aged guys huddle around one on the auction block twenty years from now and outbid each other to relive their early-aughts automotive fantasies? definitely not.

    However, with 110,000 miles on the 9-3 it has been a reliable (gasp, say it ain’t so) and pleasant car. It’s a roomy & comfy midsize sedan with more than a hint of faded eurotrash panache, sporty pretensions, and a turbo four with a stick shift, which routinely returns 35 mpg on the highway (real world at 80 mph with the AC on). When you start talking about 10 year old sedans, it’s a pretty small selection set of cars that meets that criteria. There’s certainly bad to go with the good, most notably NVH levels so poor that they would make Nissan and Subaru blush, and the oft-mentioned torque steer. Those could be fixed by adding weight and reducing power, but that would in turn diminish the good points considerably.

    You could argue that it was the best car GM made at the time, though that’s again damning with faint praise. The car has been passed through my wife (who wrecked it), to my daughter (who trashed it), and now serves as my daily driver on bad days, and it soldiers on without complaint.

    Look I even made it through the comment without mentioning quirky, Vonnegut, airplanes, two-stroke engines or center mounted keys. I’m not going to shed any tears over the griffin’s crash, but you have to admit the automotive landscape with be just a little less interesting without Saab around.

    • 0 avatar

      “I currently own a copy of the first lovechild of the GM-Saab mashup, a 2003 Saab 9-3.”

      The 1994 Saab 900(NG)shared the GM2900 platform with various Chevrolets, Opels, Saturns, and Vauxhalls. GM bought Saab in 1990, over twenty years after Saab’s last in-house developed car platorm. The Saab 600 was a rebadged Lancia Delta developed by Fiat and the Saab 9000’s platform was developed with Fiat’s help as well, being shared with the Fiat Croma, Lancia Thema and Alfa 164.

      • 0 avatar

        Yeah I remember that auto show back in ’94 when we got our first look at that GM V6 and that clutch cable. Dont recall ANY repeat V6 Saab buyers.

        Then when Saab and Opel teach GM Detroit how to build respectable 4 cylinder turbo-motors and Saab gets FISTED in return and now GM dosent want to let whose technology slip into the wrong Chinese hands? Again FUGM!

  • avatar

    As anyone who has followed this saga from the begining will know, it won’t be over til the big blue folders are swopped with Muller smiling for the cameras.
    If this positioning by GM, I wonder what they will suggest?
    “Sure you can have Saab but you can’t have the new 9-5 or the 9-4X as they are packed full of our stuff. Here, have the crappy old 9-3 and the PhoeniX, see what you can do with those,”
    And if they are angling for a position, will it finish in time for the deal still to go through? Isn’t right the deadline is the 15th?

  • avatar

    Have a wander over to the Site Of The One True Saab tonight. There would appear to be some leaked snippets from SWAN about how they are going to pitch the GM veto.
    They would appear to be in the early stages of briefing the idea that GM found out something nasty about Youngman and that they are out for about the 3rd time. SWAN would seem to be positioning themselves to claim that its excellent news that GM discovered this before it was too late. And it would also appear (reading between the lines.) that a GM approved partner has been found to buy SWAN/Saab & to supply the cars to PangDa.

    I wonder if its North Street Capital & Mr 6pack Racing Driver?

    Whatever, one of the Swedish trade federations who supply Saab has announced tonight that whoever takes them over, its going to be C.O.D for spares shipments for at least a year.

  • avatar

    Dear TTAC, Re: Saab
    What is your seeming fascination with Saab? Serious question.
    I have been a delighted reader of this site since I discovered it six or so months ago. So, having noticed two or three updates per week on the company, I confess to bafflement.
    Obviously people care, so I ask myself: why? What am I missing? Should I care? Even if I should, I just don’t think I can.

    • 0 avatar

      Storied, international automotive marques like Saab dying are certainly newsworthy items for an automotive news site, and few brand-deaths are as dramatic as this. The stories would likely not be as numerous if the situation were less bizarre.

      Either way, if you don’t care, there’s certainly nothing wrong with that.

    • 0 avatar

      You should. Schadenfraude is such fun! :)

    • 0 avatar
      John Horner

      The drama of it all keeps people curious. There are few other big business dramas going on in the auto world right now, so Saab gets the posts.

  • avatar

    As Bertel said, I think this is the final nail in the coffin. Because IP is Saab’s only valuable asset right now, and if they did not have that, what’s the Chinese buying for? Factories and car-making capabilities, they got plenty of that already. Plus why would they want a car plant in Finland with wages among the highest in the world, if they can have one in China? Without IP, Saab has nothing to sell. The emperor has been shown to have no clothes.

  • avatar

    SAAB never had anything to sell its been a rebadged GM car for so long now the only thing left is the name.

    • 0 avatar

      Yet, the SAAB name must be worth something. Any speculation who will buy that name from bankruptcy?

      • 0 avatar

        No one. The brand itself is owned by Saab AB, the aircraft company. Saab Automobile only lease the brand and all associated IP (logo, lettering etc.) from them. Saab AB have a clause that means they can cancel the agreement if the brand is sold on & have already inferred that may not approve any new owner who takes the majority of manufacturer out of Sweden.
        It has already been posted on several car sites by people who work in aviation spares that they have had people ringing up saying “I heard Saab were going bust?”. I would imagine Saab AB will be taking a good hard look at whoever buys Saab Automobile to make sure no further damage is done to their good name.

  • avatar

    Your all forgetting one thing and that’s the reaction of the Swedish Government who will want the deal to happen. My guess is that GM’s veto will be quashed by the Swedish government on competition grounds and so the deal will happen. Sweden will make it happen now there is a deal in sight.

    • 0 avatar
      John Horner

      Sweden has almost no leverage over GM. Any resulting court battles would likely play out in China or the US.

    • 0 avatar

      The Swedish Government really don’t give a damn what happens to Saab. If they did, don’t you think they might have suggested nationalisation?
      Also they have no legal right in any shape or form to overrule GM either in Sweden or in the States. The only interest the Swedish Government have in Saab is a small part of the EIB loan and that gives them a very limited say in what happens. It looks to me that you haven’t even read the article at the top of the page because if you had you’d realise that the one thing you don’t do at the moment is annoy your Chinese trading partner. When they say “Bend over!” you say “How much?”
      Plus at the start of all of this one Swedish Government minister said that it might be a good thing if Saab went bust because then the factory could be converted to make windmills for wind farms.

      The Swedish Government is just like the rest of Europe at the moment, not even remotely interested in Saab.

      • 0 avatar

        The Swedish Government really don’t give a damn what happens to Saab. If they did, don’t you think they might have suggested nationalisation?

        There’s nothing to nationalize. The brand belongs to the separate SAAB aircraft company. GM still holds much of the IP. The real estate was dumped for a sale-leaseback. The inventory, what there is of it, is of minimal value.

        That basically leaves Saab the automaker with a real estate lease, a payroll and some unpaid bills. The essential problem with any deal involving SAAB is that it carries only liabilities, while providing no assets of any value. Without operating cash flow or assets, what’s left is a big black hole that sucks in cash.

  • avatar

    I tried to do the math. Since Victor Muller’s appearance (Jan. 2010) Saab has sold approx. 38,000 cars. Saab borrowed 220 million euro from the EIB and owes 150 million to its suppliers, according to CLEPA. SWAN invested approx. 170 million according to Muller. I did not include the money it still owes GM and the fact that Muller sold off various Saab assets and leased them back. I would not be surprised if Saab is 600 million euro in the negative. That’s about 16,000 euro per car sold over the 2010-2011 period. That’s almost $22,000 per Saab. To put this in perspective, in Saab’s last USA sales promo, August 2011, 9-5’s were going for approx. $30,000. If I am right about these figures, then the picture looks gloomy indeed.

    A couple of scenarios come to mind. GM blocks any deal and forces Saab into bankruptcy. Or GM squeezes every last drop out of any deal. Victor Muller has not seen the end of his financial hemorrhage and the Chinese partners have to bring more cash to the table. GM, eager to strengthen its Chinese foothold and to earn some extra income, forms a joint venture with Pang Da and Youngman, and appoints the former Saab CEO Muller to be its creative director.

  • avatar

    Ugh…this makes me want to yank my hairs out. Shut the damned thing down!

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