Monday 14th November 2011

Saab parent may collapse even if Saab sells

The Saab Saga rolls on - and this time it's parent company Swedish Automobile that's struggling

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Swedish Automobile (Swan), the company which owns Saab and the Spyker sports car business (which it is also in the process of offloading), may have to liquidate even if it succeeds in selling both brands.

GM is currently promising to block the sale of its former brand Saab to a pair of Chinese carmakers, but even if the sale goes ahead the offloading of the two car companies would only raise 132 million euros (£113m). Swan, meanwhile has debts of 136.5 million euros (£117m).

Of course the matter of a £4m shortfall in liquidity could be a moot point for Swan, as its sale of Saab - beyond the protestations of GM - still has to be cleared by the Chinese and Swedish governments, as well as the European Investment Bank.

Even the sale of Spyker Cars isn't a done deal yet - Swedish Automobile is 'continuing talks' with prospective buyers of Spyker, US private equity firm North Street Capital, but hasn't yet nailed the sale.

[sunsurfer]

Win
Swedish automobile sells Saab to a group that will invest and develop the brand and the company

Lose
Swedish automobile goes bankrupt and Saab is closed down with a fire sale of assets and intellectual property

Win or lose, Victor Muller - Chief Executive of Swedish automobile and majority shareholder - should be proud that he and his company fought so long and so hard to keep Saab alive.
Cheers to you Mr Muller!

[Zebede29]

So let me get this straight....Swedish Automobile consists of Spyker Cars and SAAB. They now plan to sell off SAAB to the Chinese (assuming they still want it, after so much bad, seriously sales-damaging publicity) and then flog Spyker off to these private investor chappies....so what exactly will be left of SW.A.N then?!?!

Seems to me they will be left with just the shell of a former company and not a lot else. Unless they plan on buying some other struggling niche/minor-player auto company and "helping" it out too....?

[pcn1]

It would be a sad day if the Saab brand is lost for ever.

Really great cars back their day if you wanted to be a bit different from the herd.

I had a classic 900 turbo and a 9000 LPT. Bullit proof engines, felt so solid.

[cookie1600]

[kingboyk]

It doesn't matter one iota if they collapse, provided they offload Saab and Spyker first!

[Zebede29]

pcn1 said:

It would be a sad day if the Saab brand is lost for ever

Couldn't agree more...the new 9-5 is a truly different car, with a style all of it's own and certainly not the generic smaller-model-in-the-range-just-blown-up-a-bit of the competition, but it seems buying something "different" equals "burning £50 notes" which will always kill a model. Residuals either make or break a car - no matter how good it is.
Citroen C6, anyone?!?!?!

[B10]

Moral: do name your car company after a bird....Swan, Phoenix

[Frimley111R]

The big challenge is clearly that GM won't let the Chinese buy the company but no-one else wants to anyway.

[chopper602]

Zebede29 said:

Couldn't agree more...the new 9-5 is a truly different car, with a style all of it's own and certainly not the generic smaller-model-in-the-range-just-blown-up-a-bit of the competition,

Hands up all those people who own a 'new' Saab 9-5

<waves>

It's had a long list of faults and I'm currently waiting for parts for it (steering lock assembly and some other 'stuff'), only been a week so far but I don't know how long it will be before the dealers get the delivery. It's a great car to drive and excellent for covering distance, but the problems with it are starting to cloud over the silver lining . . .

(I told the missus to buy the Mazda 6, but she wouldn't listen . . . )

[dvs_dave]

So let me get this straight. Why exactly do GM have a controlling stake in who SAAB is sold to? They don't own them so how do they have this control over the sale? Also, what exactly is GM's beef with selling it to the Chinese? Are they worried that the Chinese will start churning out copies of GM products?

[mikEsprit]

I hope Saab makes it, but I really, really, really hope that Spyker makes it through this intact.

[Twincam16]

Zebede29 said:

pcn1 said:

It would be a sad day if the Saab brand is lost for ever

Couldn't agree more...the new 9-5 is a truly different car, with a style all of it's own and certainly not the generic smaller-model-in-the-range-just-blown-up-a-bit of the competition, but it seems buying something "different" equals "burning £50 notes" which will always kill a model. Residuals either make or break a car - no matter how good it is.
Citroen C6, anyone?!?!?!

I know, but I don't get that thinking at all, seeing as though residual values only really matter on a car of this particular class - regardless of who actually makes it - within the first few years. Once a car is, say, ten years old, unless it's some sought-after classic it'll be bought almost entirely on condition.

So in short, residuals only really matter when a car is under ten years old. If people looked after their cars and kept them longer, rather than really burning £50 notes in the form of chopping in new cars every few years for another one, they'd get a lot more use for their money. Citroen, Saab and several others (big Renaults, for example) used to appeal to this kind of buyer, but for some reason the only business model considered viable in the automotive market right now involves this near-constant rate of massive sales. Given the current economic climate, it seems unsustainable to me and I reckon some car companies would do well to concentrate on getting the buyer to keep their cars for longer and making money through parts and servicing. Kia, Hyundai, Fiat and Vauxhall know this and have adjusted their warranties to suit. Result? Those firms now top a number of sector sales charts. Vauxhall, though PH would prefer it not to, sells more Insignias than BMW sells 3-series.

[360pete]

pcn1 said:

It would be a sad day if the Saab brand is lost for ever.

Really great cars back their day if you wanted to be a bit different from the herd.

I had a classic 900 turbo and a 9000 LPT. Bullit proof engines, felt so solid.

I also had a 900 Turbo, then a 9000 Carlson - both absolutely brilliant with a dealer service second to none and as you say, 'bulletproof' - then a 9-5 estate which I adored and kept for 10 years with no dramas. Just traded in for an Audi A6 Allroad and wish I hadn't. Over the years I've been through various BMW, Mercedes, Audi variants but none had the same charisma or excellent dealer service as the Saab. It is the only car I truly loved with a passion (other than my week-end Ferrari) and in which I could do long continental journeys without back or bum ache. I miss those wonderful Swedish cars so much.
Oh, and by the way, when you buy a new car don't ever be fooled into buying Auto Glym Lifeshine - it is an expensive con that does not work - stick to the regular polish.

[skwdenyer]

dvs_dave said:

So let me get this straight. Why exactly do GM have a controlling stake in who SAAB is sold to? They don't own them so how do they have this control over the sale? Also, what exactly is GM's beef with selling it to the Chinese? Are they worried that the Chinese will start churning out copies of GM products?

GM kept "some skin in the game" when they sold Saab, in the form of a few hundred millions of 'preference shares' (essentially debt). In addition, they hold the IP upon which Saab's current range are built (it is only licensed to Saab), are a major supplier of parts inlcuding such minor items as engines, and they build the 9-4x under contract.

They can't stop the sale, but the change of ownership would trigger various provisions of the deals which could allow the, to:

• terminate the IP licenses;
• cease supplying parts;
• stop supplying 9-4x models;

etc. So they Saab would be sold, but it would be a husk, without models to sell or parts to build with.

[Twincam16]

skwdenyer said:

dvs_dave said:

So let me get this straight. Why exactly do GM have a controlling stake in who SAAB is sold to? They don't own them so how do they have this control over the sale? Also, what exactly is GM's beef with selling it to the Chinese? Are they worried that the Chinese will start churning out copies of GM products?

GM kept "some skin in the game" when they sold Saab, in the form of a few hundred millions of 'preference shares' (essentially debt). In addition, they hold the IP upon which Saab's current range are built (it is only licensed to Saab), are a major supplier of parts inlcuding such minor items as engines, and they build the 9-4x under contract.

They can't stop the sale, but the change of ownership would trigger various provisions of the deals which could allow the, to:

• terminate the IP licenses;
• cease supplying parts;
• stop supplying 9-4x models;

etc. So they Saab would be sold, but it would be a husk, without models to sell or parts to build with.

That may not be a completely bad thing if they can find a manufacturer to latch onto who understands them in a way GM never really did. They would be free of the 'overpriced Vauxhall' jibes.

[ptopman]

Twincam16 said:

That may not be a completely bad thing if they can find a manufacturer to latch onto who understands them in a way GM never really did. They would be free of the 'overpriced Vauxhall' jibes.

That's not very likely, unless the buyer already has access to a sophisticated platform and none of the parties that might fit that expression have so far wanted anything to do with Saab. As it stands Saab cannot make it without access to somebody's parts bin and GM is the only one that will let them in.

[Frimley111R]

chopper602 said:

Hands up all those people who own a 'new' Saab 9-5

We've got one at work and the guy who bought it only did so because it was cheap. He'd have bought anything.

[Frimley111R]

ptopman said:

Twincam16 said:

That may not be a completely bad thing if they can find a manufacturer to latch onto who understands them in a way GM never really did. They would be free of the 'overpriced Vauxhall' jibes.

That's not very likely, unless the buyer already has access to a sophisticated platform and none of the parties that might fit that expression have so far wanted anything to do with Saab. As it stands Saab cannot make it without access to somebody's parts bin and GM is the only one that will let them in.

Its not looking very optimistic is it? GM will pull the only good bits out of the company.