Saab Resumes Production

General Motors extends their bid deadline, so Saab starts making cars again

By Brendan Moore

12.30.2009

Saab emblem blue backgroundReuters is reporting this morning that Saab is restarting some production lines after the New Year as a result of General Motors extending the bid deadline for prospective buyers.

GM had previously stated that it would only wait until the end of this month (tomorrow) to decide on potential bids for Saab, but has now set a later date of January 7 for evaluation of the bid from Spyker, the Dutch supercar maker. It is believed that GM may have provided an even later evaluation date to other bidders that entered the bidding process after Spyker.

Saab has taken that respite as a signal to start making cars again, with production of the new 9-5 and the 9-3 Cabrio slated to commence after the traditional winter holiday ends at the factory in Trollhattan, Sweden.

Saab spokesman Eric Geers stated, “We have the orders and we have to deliver them as usual. We also have the orders for the 9-3 and others. The factory has to continue again.” He added, “We are preparing the wind-down process. At the same time we are open to options, to bids that come in. Therefore the deadline has also been dropped.”

The statement from Geers prompts a couple of observations from this writer.

One, if production of the new 9-5 starts and Saab does shut down shortly, anyone who owns a new-generation 9-5 is going to have one rare car in their driveway.

Two, I am curious as to just how many orders the factory has, since Saab sales worldwide went into a swoon in 2009, and all the uncertainty regarding their existence at the end of 2009 cannot be helping sales at this point. I know that some U.S. Saab dealers have stated that they currently have cars that have already had two birthdays on their lot, and I wouldn’t think any of those dealers would be too excited about ordering new Saabs.

But, apparently dealers in the U.S. and Europe have ordered the new 9-5 in fairly substantial numbers, and the factory is going to fulfill those orders. I am, however, curious as to just what kind of volume of orders the company has received.

Spyker’s second offer for Saab on December 20, in which Spyker claimed to have resolved all of GM’s objections to the first offer, has been met with resounding public silence from GM. The Dutch specialty car maker made only 43 cars last year (compared to Saab’s 93, 295 units produced) and is backed by Russian and Arabic investors, and neither of those facts is giving GM much confidence about their bid.

Merbanco, a private-equity group out of Wyoming, USA, is also rumored to be actively bidding for Saab, but no one (Merbanco, GM or Saab) will confirm their interest.

It is believed that there are also other, so- far-unidentified bidders interested in Saab.

BAIC, a large Chinese automaker, recently purchased tooling and technology for the previous generation of the Saab 9-5, as well as some technology related to the 9-3, and is said to be interested in buying the Saab brand if a deal to sell Saab whole does not materialize.

COPYRIGHT Autosavant – All Rights Reserved

Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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8 Comments

  1. If you did get one of the new 9-5 cars and Saab closed right after, it might be tough to get parts in a couple years, unless someone else started making the car

  2. I work at a dealer group that has a Saab franchise as one of our brands and we still have a new 2007 9-7X on the lot, still on the MSO and with 280 miles on it. It’s been here for three years.

  3. Scary stuff about that new old stock 9-7x still sitting around. Beat-Nick, I’d assume that parts for the new 9-5 might be reasonably prevalent since it shares many chassis parts with the Buick Regal (and powertrain parts with the Cadillac SRX).

  4. Saab is a dead man walking.

  5. It’s too bad the workers can’t get it together to buy the company themselves. They could buy it, build it back up to profitability, and then sell most of it off in an IPO.

  6. SAAB saw a 60% drop in 2009 sales compared with 2008. SAAB dealers lay blame with GMACs reduction in lease options for consumers. Well those same limited lease options didn’t stop consumers from buying the Cadillac CTS at near record numbers during the same period. 60,000 CTSs sold to 6000 SAABs.

    Automotive industry pundits can afford to heap all the praise they desire on the new 9-5 model but that alone cannot guarantee sales. They heaped plenty of praise on the Pontiac G8 and look what that did for sales. Nada. You have to be able to get the potential buyer into the showroom. With GM’s official announcement of the “wind down” of the SAAB brand resonating loud and clear in the public’s collective ears that would be a Herculean feat.

    Dealers have to obtain credit from banks to finance that inventory. Without some form of guarantee from GM backing those loans which bank will issue such credit to a dealer? It begs the question of how any dealer would go forward with orders unless they had significant customer deposits on hand.

    BTW there has been no reprieve given for the cessation of SAAB Canada’s sales operations which is effective tomorrow.

    If the SAAB automotive brand is somehow revived it would probably be better off starting with a clean slate rather than picking up the tattered pieces where GM left off.

  7. Let this brand die already. None of you Saab aficionados are going to save this brand. If anything, most of you will either only pine for the “good ole days” of yesteryear’s 900/9000 era or merely wait to get the new ones at a fire sale.

    Even the Swedish government has abandoned their mainstream marques. Quirkiness and catering to the die-hard do not make a successful company.

    @Beat-Nick

    Don’t worry, the Chinese will have something for sure. Might not be the best and might continually break but hey, not much different than a typical Saab right? Only without the added electronic goofery and at a MUCH cheaper price.

  8. Anon – whether it’s naïve or not, I believe Saab could have a profitable future in the right hands. It might not be a future where they sell half a million cars, but I think the right owner could turn Saab around.

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