Autosavant’s Saab Fanatic Weighs In On Reorganization
By Kevin Miller
People who know me well- and even people who know me just a little bit- know that I’m a Saab fanatic. Saab, Saab, all the time. I take my classic 900 three-door to local Saab gatherings. I try to cover as much Saab news as I can, and review as many Saab vehicles as I can for Autosavant. I read other websites (gasp!) to catch up on Saab news beyond what GM’s media group publishes. I consider myself to be fairly well plugged-in to what is going on with Saab.
In the past several days, since news broke about Saab being dumped by GM, followed quickly by news about Saab’s subsequent reorganization, I’ve gotten a number of emails and phone calls from family, friends, and acquaintances, telling me they’d heard about Saab’s bankruptcy filing, heard that Saab was going out of business, heard whatever. Everybody wanted to know how I was doing with it, what my opinion is.
Last month before all of this news came out, I was in Detroit at NAIAS. While there I tracked down Saab’s PR head Jan-Willem Vester to ask him what GM had in store for Saab, as rumors had recently been circling that Saab would have to be sold or be closed. Mr. Vester assured me that Saab was a valuable, integral part of GM’s operations, GM’s only premium European marque, a brand that attracted customers who wouldn’t shop other brands in GM’s portfolio, and that because of the technology Saab continues to develop for GM, the Swedish brand wouldn’t be going anywhere.
When I wrote that bit of news in an article here on Autosavant, TrollhattanSaab.net’s author, Steven Wade (Swade), left a comment telling me that I’d been fed Mr. Vester’s standard answer, that was straight from GM’s corporate playbook. As it turns out, he was right on. Swade happens to publish the best site for Saab news, period. Earlier this month he changed his site’s name to Saabs United, but the comprehensive Saab news that he publishes on his site seldom fails to impress me.
In any case, media reports of Saab’s proceedings have been of varying quality, and varying… veracity. Consumer Reports is among the media organizations that have reported that Saab filed for bankruptcy. I even heard one misinformed morning radio DJ state that Saab was going out of business. That is not the case.
Saab has filed for reorganization. The text of the Swedish Company Reorganization Act states that it is for companies that foresee that they will soon be unable to pay their debts. The reorganization allows the company to look at debts and work out different payment plans. According to Saab’s press release, the purpose of the company reorganization is to create a short-term stability that will make it possible to develop a long-term solution for Saab. The Swedish Company Reorganization Act says that an application shall not be approved unless there is reasonable cause to assume that the purpose of the reorganization will be achieved. In Friday’s decision, Sweden’s Vänersborg District Court has found that such conditions exist.
In general terms, Saab’s reorganization plan consists of the following steps: (1) bring engineering and manufacture of Saab vehicles back to Trollhattan, (2) separate Saab from GM, (3) focus on completion and funding of three new vehicles currently in development, and (4) find new investors in the company. The reorganization papers forecast a return to profitability in 2011.
Although Swedish manufacture of Saab vehicles is the goal, the upcoming 9-4X crossover will be manufactured by GM in Mexico, there is no practical way to produce that vehicle in Sweden. The other two vehicles mentioned in item (c) above are the replacement 9-5, and a replacement for the 9-3; both of those vehicles would be produced in Trollhattan.
Even though Saab’s reorganization plan has been approved by a Swedish court, the company still has an uphill battle moving forward. Sweden’s Enterprise and Energy Minister, Maud Olofsson, believes that the plan is “unsustainable”, making Saab unable to take advantage of the loan guarantees the Swedish government has offered. As stated in my article last week, Olofsson and the Swedish government are unwilling to pitch in and help try to clean up the mess that GM has made of Saab, they believe it to be GM’s responsibility.
All of that said, it is clear that Saab is in a lot of trouble. The Swedish government seems reluctant to give financial assistance to the company. Their current financial situation has caused a lot of dealerships in the US to close, so that even when the promised new vehicles are available, there won’t be very many places to buy and service them. That same shortage of retailers will make the Saab less appealing to other car companies who might consider investing, partnering with, or buying the Swedish company.
It’s pretty easy to see that Saab has exactly one shot to make this work at all, so they need all of their proverbial stars to align. The upcoming 9-4X and 9-5 need to be uncompromisingly great. So does the replacement for the 9-3. In order to make those vehicles appealing, Saab needs to focus on what they’re really good at. Historically, their strength was in designing and manufacturing very versatile, useful cars.
The 99 and classic 900 ranges were incredibly roomy and well-thought out vehicles that kept their occupants safe and comfortable, while delivering good driving dynamics, performance and efficiency. The 9000 built on those strengths . Even the later 900/9-3 and 9-5 offered space and efficiency, but by the time the current 9-3 rolled out it had lost the versatility of the hatchback body style as well as a significant amount of rear seat room, becoming “just another” safe, near-luxury sedan. Much of the reason for that is because the car was based on a GM platform, which was also used for cars like the Pontiac G6.
Make no mistake about the fact that I really hope Saab will survive, and thrive. It’s history of technical innovations and sturdy, long-lasting vehicles may be overshadowed by recent events, but no other vehicles I’ve owned have been as well thought-out as my Saabs. From their basic layout to subtleties of controls that are appreciated more as time passes. If they have put the same design principles into their upcoming vehicles that went into prior models, Saab’s engineers will have done all they can to make the new vehicles successful. The rest is in the hands of the markets, Swedish government, potential customers, and potential investors. I’ll be keeping my fingers crossed.
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