Monday, January 9, 2012

A sad end to Saab’s story

A sad end to Saab’s story
Sean Gallup / Getty Images fo;e

The logo of Swedish automaker Saab.

By Paul A. Eisenstein

With the filing of bankruptcy papers this week it’s all over for Saab but the funeral. Or is it? 

Few automakers have existed so long and so close to the precipice -- or shown the uncanny ability to come back from the seeming dead.  But this week’s developments would suggest that the Swedish automaker will soon wind up on the automotive rust heap.

The news leaves a lot of folks wondering what will happen next, among them Saab car owners, the maker’s creditors and its employees. There’s relatively little in the kitty left to cover the carmaker’s debts, and a Saab spokesperson today told us warranty service has been “temporarily suspended.”

Even after filing for bankruptcy on Monday, Dutch businessman Victor Muller -- who purchased Saab from General Motors in early 2010 and who has been serving as its chairman -- remained surprisingly optimistic, telling the Dow Jones newswires:

“With a bankruptcy, it is now possible to start with a clean slate.”

Exactly what that means remains to be seen, as the bankrupt firm’s parent, Muller’s Swedish Automobile, or SWAN, said it would write off its investment in the automaker. 

There are signs others may see gold amidst the rust, however. The Swedish Ministry of Enterprise says it has received a “number of calls” from potential buyers of Saab’s remaining assets. Among those interested is Zhejiang Youngman Lotus, the ambitious Chinese automaker that had hoped to strike a deal with Saab to head off the Swedish company’s bankruptcy.

It ran into a brick wall in the form of General Motors, which made clear it didn’t want to create a new competitor for its own Chinese operations -- GM being the largest automaker in the booming Asian market. Though it had sold off Saab in 2010, the U.S. company remained one of its biggest suppliers, providing engines and other parts for Saab’s 9-3 and 9-5 models and assembling the new 9-4X crossover vehicle at a GM plant in Mexico.

But Youngman could purchase Saab’s other assets -- if it can figure out precisely what those are. There are the designs for the current Saab models, though it’s unclear what value they would have without GM’s cooperation. There’s also the next-generation Saab 9-3, which was going to migrate to an engine provided by BMW. 

There’s also the Saab name itself -- although industry analysts see it as severely tarnished in light of the maker’s long-running death spiral. And a purchaser might still have to get approval to use the brand name from Swedish defense company Saab AB, which sold the automaker to GM a decade ago.

Saab started out as an aircraft manufacturer, originally known as Svenska Aeroplan Aktiebolaget. A group of the company’s engineers, looking for ways to keep busy as defense spending collapsed, put together the company’s first automobile shortly after World War II.

Saab never developed a solid financial foundation. GM bought a 50 percent stake in 1989, acquiring the rest of the company 11 years later. GM decided it close or sell off Saab -- along with three other North American brands -- after emerging from bankruptcy in 2009.

Saab was set to close when Muller stepped in later that year. The deal was completed early in 2010 and gave Muller, among other things, Saab’s headquarters and assembly plant in Trollhattan, Sweden.

The Swedish carmaker earlier this year had raised some preliminary cash by selling its factory and other properties. What use they will be to anyone remains unclear. While the Saab assembly plant was one of GM’s most modern it is located far from the center of European automotive manufacturing and in a country with some of the Continent’s highest labor costs.

Part of the challenge for anyone interested in purchasing Saab assets is that it would also have to deal with both the Swedish government and the European Investment Bank, the latter having provided a 400 million euro loan to back the sale of Saab last year to what was then known as Spyker Cars.

The Swedish courts have already appointed two trustees to try to rescue whatever is possible from the ruins of Saab. Muller hinted he would like to see workers -- who have gone unpaid for months -- get something in time for the holidays, though that seems unlikely.

Despite its problems, Saab has maintained a small core of loyalists; U.S. sales totaled almost 4,000 units this year. The question is what will happen to those and previous buyers. Vehicles sold when GM owned the company should qualify for warranty service at GM dealers, according to several industry sources, but there could be hiccups in the short-term, and as for vehicles -- like the new 9-4X -- purchased after the sale, that could be another matter entirely. 

But for the moment, the news is bad for all Saab owners. Saab USA spokesperson Michele Tinson noted that, “all warranty coverage is now being suspended until we have further direction from the [bankruptcy] trustees.”

Even those older GM-built models are facing delays. Should a customer have an immediate problem, Tinson said, it will be “up to the discretion of the dealer” to decide whether to provide covered repairs or charge the owner.


0 коммент.:

Post a Comment