300 million reasons

Despite slashing costs over the last few years, Saab Automobile AB is now being reported to have made losses of up to US$300 million during 2005, up from US$200 million in 2004.  GM appear to be standing firm behind Saab but this result can only lend more strength to Jerry York’s arguments for GM divesting itself of the Saab brand.

Not.  Good.  News.

I’ll let Reuters tell the story:

The Handelsblatt daily cited company sources saying Saab’s loss widened from nearly $200 million in 2004, but a GM Europe spokesman said the company does not break out earnings for individual brands and would not comment further on earnings before its quarterly report on January 26.

The spokesman said Saab had its best ever fourth-quarter sales at the close of last year and its highest annual sales in Europe in 2005.

"Having its best year ever from a volume standpoint, having the 9.3 Sport Combi (estate car) for a full year, having the new 9.5 (sedan) and the 20th anniversary of convertibles for the 9.3 in 2006 should bode well for the Saab brand and we expect that we will continue to gain momentum," the spokesman said.

"There is no question that the company has got a commitment to Saab," he added, citing its progress in cutting costs and in launching a new model offensive at the brand.

GM Europe President Carl-Peter Forster said at the Detroit car show last week that if orders continued at the pace of late last year, Saab could boost volume by between 10,000 and 15,000 units. It sold 82,100 in Europe plus more than 38,000 in the United States in 2005.

"I think (for) Saab there is potential for a step up in the cycle of performance," Forster said.

Thanks to Stefan for the initial tip about the results…. 

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7 Comments

  1. I’m no accountant or anything but I wonder. When they tally up the results for Saab, does Saab get credit where credit is due. For example, when they sell a Chevy Malibu Maxx, does Saab get any credit due to their help. Does Saab get any credit for technology of theirs that might be in other GM cars that sell well. Course, GM might lose money on every car they sell.
    Looking at the numbers for Saab, I don’t think selling an extra 10 or 15 thousand will offset the losses by more than a piddling amount–depressing.

  2. I wish Saab would push their safety record and IIHS gold medal a lot more in their ads. They are one of a very few cars that get both good crash test ratings and good real-world results. It makes me sick when I hear an ad for some mediocre brand safety-wise proclaiming they get the “highest possible” crash test ratings.
    Saabs provide real safety as evidenced by this story where a woman got broadsided on the driver’s side by a Honda Accord (apparently her fault) with this result:
    “There wasn’t a scratch on her,” Police Sgt. Christopher Corbett said. “I guess that’s a commercial in itself for a Saab.”
    See:
    http://www.rep-am.com/story.php?id=1206

  3. I suspect at least $100 million of the loss was caused by abandoning the 9-6X, as from what I understand, it was pretty close to production. Plus they had a couple of recalls which always eats up the cash.

  4. Thanks for the web address of the Forbes article. This is the first time I have seen an article quoting a GM management source saying SAAB might not be a part of GM in the future. I for one am ecstatic! I know the next person who posts will say that “without GM there would be no SAAB by now.” I would argue that with GM owning the company there will be no SAAB in the future, at least SAAB as we know it. What has GM done with the brand that makes you want them to maintain ownership. I can think of nothing. I will take my chances with a new owner.

  5. Hey Johnny, I wanted to make sure the next entry after yours WASN’T someone saying “without GM BLAH BLAH.” You echoed my own feelings on the matter clearly and concisely. And the Forbes quote confirms what some acquaintances of mine with contact inside SAAB told me in spring 2005. You may have noticed an item Swade is running about SAAB sales – or lack, thereof – in Russia. Last April I sold my 1995 9000 Aero with 200,000 miles to a Ukrainian immigrant to the U.S. who was ecstatic about being able to own the car of his dreams. “We could not buy SAABs in my country,” he explained, paying me $3,000 before happily driving off with his equally happy pregnant wife and young son following. He wrote several appreciative Emails, one stating, “in couple years I’ll be looking to buy your current Aero-who else is taking such a good care of his Saab? Reason I said that is because I read about possibility Saab being dumped by GM. It might work out good- I’m hoping Saab will buy it back from GM and soon we’ll see new products made by Saab engineers only. Let’s hope for the best!”
    The reason I share this is to show how widespread the desire for SAAB to say “bye” to GM is. It’s a view not well reflected in the blogs, but I find the feeling strong in day-to-day encounters with SAAB owners. So I will now happily click on that welcome Forbes link. Regards, and “let’s hope for the best,” indeed! Don’t worry: GM has just been posturing; they want out, big time!

  6. For the record, folks – I would absolutely love for Saab to be a 100% independant company again, producing their own vehicles of their own design. But I’m also a realist and sadly, that dream ain’t likely to happen. I’ll gladly pop the champagne corks with anyone if it does. It’d be a dream come true.

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