The Saab Thread

[IVR007]

Interview with Victor here.

I have no time to translate so google is your friend: Google trans.

[OnTheLam]

Google translate was worth it for the "if I doze off" comment alone.

[amzamz]

... Merry Christmas, Saab!

+ YouTube Video

[IVR007]

15 min ago, SWAN/Victor requested voluntary bankruptcy for Saab at the court house in Sweden.

addition:

Saab Automobile Files for Bankruptcy
Zeewolde, The Netherlands, 19 December 2011 — Swedish Automobile N.V. (Swan) announces that Saab Automobile AB (Saab Automobile), Saab Automobile Tools AB and Saab Powertrain AB filed for bankruptcy with the District Court in Vänersborg, Sweden this morning.
After having received the recent position of GM on the contemplated transaction with Saab Automobile, Youngman informed Saab Automobile that the funding to continue and complete the reorganization of Saab Automobile could not be concluded. The Board of Saab Automobile subsequently decided that the company without further funding will be insolvent and that filing bankruptcy is in the best interests of its creditors. It is expected that the Court will approve of the filing and appoint receivers for Saab Automobile very shortly.

Swan does not expect to realize any value from its shares in Saab Automobile and will write off its interest in Saab Automobile completely.

[F Spider]

So, where does that leave Spyker

[IVR007]

I have no idea, we know that this is about a bankruptcy for Saab, not SWAN but if SWAN's shares in Saab become worthless, what is left of it is a holding company with the Spyker business and a lot of debt (mostly to Antonov, and he is due to court). We know that Spyker needs investments to survive as well. There is a potential buyer for Spyker in the form NSC but personally I'm not expecting much out of that.

[IVR007]

Some hope? Victor said:

Jag har fortfarande Spyker. Jag kommer fortfarande att vara inblandad där, "it's my baby".

I still have Spyker, I will still be involved there, it's my baby.

[amzamz]

... good comments, almost like an obituary...

Saab reaches the end of the road

Eternal optimist chief executive Victor Muller fails to save iconic Swedish automaker

Reuters December 19, 2011



No one can say Victor Muller didn't try to save Saab.

A racing car enthusiast with the skills of a deal maker, firefighter and diplomat, the Swedish Automobile chief has spent most of 2011 flying from continent to continent trying to stitch a deal to save the iconic Swedish car.

He tapped a network of potential investors, including friends, businessmen, companies and fund managers, from Russia, China, the United States and the Middle East. He even tried to sell his "baby" luxury niche sports car company Spkyer - twice - and use the proceeds to help keep Saab in business.

But despite Spyker's motto "nulla tenaci invia est via" - "for the tenacious, no road is impassable" - Muller's dream is over. Earlier on Monday, Saab asked a court in Sweden to declare it bankrupt, after General Motors vetoed a plan involving Chinese investor Zhejiang Youngman Lotus Automobile.

"He has shown an ability to try to turn every stone to solve this and he should be commended for that," Fredrik Amlqvist, a 17-year veteran Saab car builder, told Reuters on Monday.

"Some think he should have thrown in the towel earlier but one should not give up until all possibilities are investigated. He has done a good job, I think," said Amlqvist.

Others however, including fellow Saab factory worker Stefan Karlsson, believe Muller could have handled things better.

"Muller has done what he can, but he should have acted a lot sooner, when money was drying up. They should have tried to secure financing before they had to stop (production)."

Muller, who prefers to communicate with the press by text message, told reporters in Sweden on Monday that GM's "complete lack of co-operation" and problems with Saab's court-appointed administrator were major impediments to saving it.

A former M&A lawyer who made a fortune from Dutch fashion brand McGregor, Muller, 52, has a reputation in the Netherlands as an eternal optimist, who likes design, style and cars, both racing them and collecting classics.

He was heralded for rescuing the loss-making Saab in January last year, when his sports car company Spyker, whose cars have appeared in Hollywood films including Basic Instinct 2, bought Saab from General Motors in an 11th-hour deal.

In the wake of the 2008 financial crisis, which brought GM to its knees, it had decided to close down the loss-making Swedish brand, which it had bought in 2000.

Saab, which started selling cars in 1947, gathered a following who enthuse at length about the cars' eccentricities and early innovations, from pioneering turbocharging to ignition placement and heated seats. But many became disillusioned, particularly during the GM years.

"If you were driving a 9-5, not even the newest, you were not driving a Saab but a GM car," said Eric van Nimwegen, a 46-year old film maker who helped organize a Saab support tour last year.

Cheered by crowds in "Saab city," or Trollhattan, the Swedish home of the Saab factory, a sprightly Muller had jumped onto a podium in jeans and a leather jacket in January 2010, and promised to resume production and turn the business around.

But Saab's production fell short of target, and the company struggled financially.

Infamous for quips including "I'll never give up," and "there's always a plan B, C and D," Muller tried for months to stave off collapse, seeking new investors and selling off assets to pay suppliers and employees.

Almost two years on, Muller faced the same group of workers in Sweden on Monday, to whom he apologized, and said he worked "like a lion for them."

One worker, who declined to be named, told Reuters Muller said very little, other than: "Thank you and goodbye."

[Swisstrader]

Amazing how quick the rise and fall.

[OnTheLam]

GM was poison. Both before and after divestiture. It is too bad.

I hope Victor has the energy left to return to Spyker!

[Spyker 007]

Press conference by Victor:

TV: Mullers presskonferens - Saab - www.ttela.se

[IVR007]

Just heard Victor about Spyker here, he says they are still trying to sell Spyker but North Street Capital has left the deal in silence and there are talks with a 'fairly large party from California' among other possible investors. He also says about 12 or so Spyker have been built this year.

[Swisstrader]

More...

Saab drops warranties on cars here, GM to cover older ones

[amzamz]

... British humour and cynicism can be found here.

"The Chinese have played their usual game. It's now been kept alive and run down so badly no-one can buy it as a going concern. They will now get the tooling for $3.20 and a prawn cracker and will ship production to China, where IP laws are irrelevant (when it suits them)."

"If Saab dies now, as it would appear to have, it's gone forever now as a car brand. There are no pieces for anyone to pick up, as you rightly point out the name belongs to Saab AB, and the IP for anything currently made belongs to GM.
The factories were even sold off, so there's nothing left..... apart from the poor bloody workforce"

"The whole thing is fairly extraordinary. GM have effectively written-off over $300m (the preference shares) plus all of the Saab debt to GM (another $50m?) plus all of the future revenues from Saab parts purchases and IP royalties, in order to protect what? IP which really is purchasable elsewhere for similar money to Youngman's proposed investments in Saab."

"All we're left to wonder is to what degree the GM contracts provide a route to SWAN suing GM. After all, I'd have thought that the oft-used phrase 'not to be unreasonably withheld' must have made an appearance somewhere in the change of ownership clauses, and it is this reasonableness which will no doubt be tested in the courts."

"GM didn't have to sell Saab; they chose to do so. With that comes a responsibility not to just pocket the cash and then pull the plug, don't you think?"

"Cant believe we thought VM could pull off a deal. There was never any outs."

"Sadly I suspect you're right. VM's biggest failures seem to have been that (a) he expected other people to behave reasonably, and (b) he expected other people to honour contracts. On both counts he was wrong, and upon those rocks have foundered the hopes of many."

[amzamz]

... see another opinion here.

Monday, December 19, 2011
Saab died three years ago
Today will be remembered as the day the car brand Saab died. But don't let anyone fool you. Saab died more than three years ago in an office thousands of miles away from Trollhättan.

The Saab car division was established after WW2 when Saab needed to find new products to produce and sell. Saab was originally a war plane developer and manufacturer and when the war was over the company needed one more leg to stand on. After experimenting with a few other products, the company developed its first car, the UrSaab in 1947.

From there on Saab was a car company. The first car to hit the market was the Saab 92 in 1949. A two door aerodynamically shaped car with a two cylinder two stroke engine and front wheel drive. It was a small revolution in the car world. Saab improved the car year by year and during the 1950s and 1960s Saab became a victorious car brand in rally competitions.

Saab was always an engineer driven company and did not always do what was the financially best option. It was all about the cars, and the founder and car guy Marcus "Dodde" Wallenberg made sure that the development of the Saab cars could continue despite financial statements written in red.

In 1977 Saab shocked the world by introducing the Saab 99 Turbo. The world's first family car with a reliable turbo powered engine and sports car performance. A few years later the Saab 99 was developed into the Saab 900 which saw to it that Saab turned into a successful company with record sales and nice profits.

Then at the end of the 1980s things started to look difficult. Saab needed new and modern platforms to develop new cars and partners to share the costs. At the end of 1989 Saab-Scania was in the last stage of selling the car division to Fiat. Then General Motors showed up. GM had just lost Jaguar to Ford and was desperate to buy an European premium car brand. In the eleventh hour GM bought Saab, without any thoughts about what it wanted to do with the brand.

Unfortunately GM never paid much attention to its odd Swedish car brand and even worse, instead of giving Saab the needed money to develop a competitive car portfolio, it found it better to use that money to cover the yearly losses.

When GM itself was on the brink of bankruptcy in 2008, the company decided to clean up its car brand portfolio. And in that office thousands of miles away from Trollhättan it was decided that Saab would have to go. And if GM could not have Saab, no one else would either.

And so every other week we could read in the news yet another GM executive putting Saab down. Saying that the brand was a disaster. It never had made money. Saab had lost piles of money year after year. Saab would never be a success, etc etc. Was that the way to sell an asset? Would you describe the house you are selling as full of ants, mold infested and falling to pieces? Of course not! If you are serious about selling, you keep your mouth shut if you have nothing good to say! Just look at how elegantly Ford sold Volvo.

GM was (unfortunately) saved by the tax payers of the USA. The biggest car company in the world was itself in need of charity and good will from some one bigger than itself. Charity and good will it decided in 2008 that it was not willing to show Saab.

To GM big surprise several parties turned out to be interested in buying Saab. As mentioned already, GM did all it could to discourage any buyers, but the lure of the Saab brand was stronger than the warnings from GM.

Among the twenty or so parties interested, there was Geely, which was the second biggest automaker in China. We also had a financially powerful US company called Renco Group, which among other things produced the Humvee military vehicle. There was even a tiny Swedish super car company called Koenigsegg.

In June 2009, to much surprise, GM announced that it was negotiating with Koenigsegg Group. A consortium spun from the small Swedish company producing the Koenigsegg sports car. GM had chosen not to negotiate with Renco Group and Chinese Geely (which ended up buying Volvo), despite their offers being better than the one from Koenigsegg.

Why did GM chose tiny Koenigsegg? For at least two reasons. First, the company was too small to constitute any threat to GM in the future. Secondly, because GM did not believe the deal would be followed through. It was all an act by GM to have an alibi when people later would look for someone to blame when Saab was to be liquidated. Then GM could say that it had tried to sell Saab without luck.

In November tiny Koenigsegg gave up just like GM had foreseen. And GM announced that Saab would be liquidated, all according to plan.

But something happen that screwed up GM's plan. An even tinier Dutch company called Spyker Cars entered the field. And this company had a tenacious CEO that never gave up. Spyker handed in bid after bid and at the same time the pressure from fans and press became too much even for GM.

And in February 2010 GM sold Saab Automobile to tiny Spyker Cars. But GM had at least avoided selling Saab to a competitor, and had added several clauses in the deal with the buyer Spyker Cars which said that GM would have to approve any future changes in the ownership of Saab.

Not surprisingly, Saab soon ran into financial problems. It turned out to be harder than expected to rebuild the brand. A brand GM had damaged almost beyond repair with all the negative comments from the GM executives during 2009. Saab's CEO and Chairman Victor Muller then negotiated a deal with China's and the world's biggest car distributor Pang Da and the upper class coach builder Youngman. This was a fantastic deal. A deal that had the potential of making Saab an important player in China, the world's biggest market.

But GM did not like this deal. China had overtaken the US as GM's biggest market. If there was something GM did not need, it was another premium competitor in China. Especially one that could produce high quality cars locally and distribute them through the biggest dealer network in the country. And so GM decided that if Saab finalized any deals with the Chinese, GM would stop supplying Saab with technology and cars.

Saab had been developing its own vehicle architecture since 2008. But this architecture was still 1 – 2 years from market launch. And in the mean time Saab was totally dependant on GM's technology. GM knew this and insisted that it could not supply Saab with technology should Saab's deals with China be finalized.

Don't let GM or anyone else fool you. This was never about protecting technology. This was all about protecting its market share in China. The technology Saab uses in the Saab 9-3 is old (pre 2003) and has not been unique for several years. The technology Saab uses in the Saab 9-5 is still unique, but within two or three years even this technology will be widespread. And the Chinese would need at least two or three years to make use of this technology in their own vehicles. And that is assuming that they would "steal" the technology, which is an outrageous assumption in the first place.

And so the company which crawled to Washington D.C., went down on its knees and begged for mercy and money to be saved from bankruptcy and extinction, held the axe that killed Saab. The mercy GM was shown in 2009, it could not pass on to Saab.

And so Saab did not die today. Saab died three years ago by the hands of GM.