Why GM ain’t such a bad daddy….

GM, in a perfect world, wouldn’t own Saab. In a perfect world, Saab would be self-determining. They would build vehicles according to their own philosophy and they would sell enough of them to keep investing in themselves and developing their craft.

Of course, we don’t live in a perfect world. Given that that’s the case, GM may or may not be the ideal owner for Saab.

But they sure beat being owned by Ford.

There’s been a train of thought that Ford have treated Volvo well because they’ve let them develop their own vehicles, ones that use a generic platform that Volvo have been allowed to build on in order to maintain their individuality. And indeed,this is a good thing. Volvo have grown and if and when Ford sell them they’ll likely provide themselves with a cushion for the loss they’ll take on Jaguar.

But the fact that Ford are in a position where they almost have to sell Volvo speaks more about the company as a whole than what their success with Volvo does.

Here in Australia, Ford announced today that they will be shutting down an engine plant that builds six-cylinder engines for the large-size Falcon range and Ford Territory SUV. There’s been a huge outcry over this today and calls for the government to step in, etc etc.

It’s not the government’s fault, though. It’s a business decision, based on the fact that business here ain’t been that good – and Ford have got no-one to blame but themselves.

Several years ago, GM took a decision to invest in Australian vehicle development, and the ultimate outcome of that decision has been plenty of vehicle exports from Australia to the US and the Middle East, as well as a few to the UK and other markets. GM’s Australian operations have also been recognised as an area of expertise for RWD architecture. Basically, we build great hoon-mobiles and people seem to like them.

Similarly, Toyota invested in their operations here and also export vehicles from Australia to other markets overseas.

Both companies have relatively secure operations here. But not so with Ford, as this latest bit of news shows.

Whilst GM have watered down some of Saab’s identity in the last few years, they’ve also begun to discover the things that the Swedes are good at. Saab have been entrusted with responsibilities for turbocharging, development of E85 capability and more recently, the implementation of XWD for GM’s coming new vehicles.

Here in Australia, Holden have been rewarded for their expertise by being able to bring out a new Commodore sedan that’s regarded pretty highly by the press and public alike.

In Sweden, Saab have just released a refreshed 9-3 that made real, tangible steps. My mate Par Brandt from Auto Motor and Sport in Sweden referred to it as being how the 9-3 should have been right from the start.

I feel pretty sure that we’re going to see Saab’s model range, and their role, grow in proportion to the increasing impact they have on vehicle development within the GM portfolio. The trick will be to get the mix of identity, character and engineering correct.

I met enough determined guys in Sweden to feel confident about that happening. Here’s hoping it’s the case.

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  1. I think the ‘center of technical excellece’ or whatever they GM calls it is lip service. The best turbo in GM’s inventory is the 260 hp Solstice engine, and I’m not aware of any connection between Saab and that engine. Is there one?

    I sincerely hope it isn’t just marketing but I haven’t seen much evidence that it isn’t.

    I really like the quote about ‘how the 9-3 should have been right from the start’. It’s exactly right. Of course, that’s another way of saying Saab is 5 years late. Or maybe that’s good, relative to how late a 9-4 and 9-1 will be…

    I still think Saab would fit better in the BMW portfolio than the GM portfolio, based on size and overlap (good and bad) with sister product lines.

  2. I’ve heard it said that the OG9³ is what the NG900 should have been from the start. By having two models in a row with this problem (ship it now, fix it later, a la Microsoft) they acquire a bad reputation that’s often difficult to shake.

    It’s a bit off-topic, but I found it interesting that in the current issue of Consumer Reports they feature a “2008 Car, SUV, and Truck Preview”. I was amazed to see that though competitors AUDI and ovloV have vehicles featured, there’s no mention of SAAB.

    I don’t know if Consumer Reports or SAAB dropped the ball, but this is unacceptable. Maybe early July was too late for SAAB to get the MY2008 9³ information to CR’s editor? You’d think at the least SAAB could send the pictures they released early and a bit of non-specific information so it could be included in the feature. It’s not like the feature is info-packed anyway, it just shows a pic of the upcoming model and a little blurb of info about each.

    There’s also a thicker magazine on newstands called “Consumer Reports Car” with the same cover story. The feature looks a bit different, but it is also missing any mention of SAAB.

  3. The fact that Ford has always maintained a distance between systems integration with Volvo and the rest of the Ford empire has long given fuel to the idea that Ford’s masterplan was always to sell Volvo as a going concern some way down the line, and at a profit.

    This is at odds with the GM-Saab approach where Saab is gradually being swallowed into the larger organisation with lip-service being paid to the “Swedishness” of Saab design whilst being designed alongside Opel in Germany, the running down of parts stock for older models (thing five years old or more!) and the pushing for greater economies in production at Trollhattan, getting them and then removing Saab production anyway.

    Perhaps Ford was right all along with Volvo?

  4. Here’s a really nutty idea: would it be worth GM’s while to purchase ovloV should it hit the market? I know it would seem at odds with GM’s ownership of SAAB, but the two product lines could be designed to complement each other, with SAAB basically being a luxury version of Opel (Saturn in the U.S.) and ovloV being the family transporter they are. SAAB would be the more performance-oriented premium brand.

    I know speculation has been that Bimmer has had an interest in possibly acquiring ovloV should Ford sell, so maybe that’s reason enough for GM to buy ovloV, to keep it away from BM?

  5. Whoa, Grip, that is nutty! If that ever happened, I bet a few years down the road some bonehead at GM HQ will decide to merge Saab into Volvo – “they’re both Swedish, right?”

  6. Are you sure the bonehead will know they’re Swedish?

    The last thing GM needs is another brand.

    Does anyone understand BMW + Volvo? I don’t. Volvo is vanilla front drive and BMW is spicy rear drive, or so we believe, right?

    BMW: Saab is a natural bridge between Mini and BMW. Mini = small front drive; Saab = midsize front/all drive; BMW = mid/large rear/all drive; all are sporty, cool brands of managable size. Please make GM and offer.

  7. I believe Ford is a better ‘daddy’ to Volvo than GM will ever be to Saab. For starters, Ford had the right approach; “don’t fix, heck dont touch something that isn’t broken.” The only reason why Ford is selling Volvo is to free up some cash. Volvo generates 500 million in profit, thats right profit. In fact it’s the only division of Ford that makes them money. The worst part in all of this is the fact that Ford is so desperate they going to undersell (at 5-6billion)for what they paid for it (nearly 7billion $US)

    If GM had the same approach, we would see better cars, better technology for the American market, and our brand back. And if we were lucky enough, GM would be in the same position as Ford, by selling a lucrative swedish brand. With a few prayers, some swedish family will snag them up before the chinese do. Unfortunately this will all happen for Volvo (rumors are out there). When GM needs to sell Saab in 5 to ten years no one is going to want a “built from jets” brand name…well maybe the chinese market. sigh.

  8. It always annoys me, this talk of ‘brands’ by marketing departments. I see that the term is filtering down into more common usage.

    to my mind:

    – a ‘brand’ is a badge on something. Change something slightly and put a different badge on it and that is a different ‘brand’.

    – a ‘marque’, on the other hand, is the whole philosophy behind a carmaker. The spirit, the innovation, the reasoning, the unusual way of doing things, these are all part of the ‘marque’.

    SAAB used to be a marque. So was SAAB-SCANIA. I fear that the last ten years has seen Saab become merely a brand in a portfolio of nice looking emblems that The General has been collecting.

  9. Why o why do Saab fans beat themselves up about Ford and Volvo? Any old timers I speak to see the current range in exactly the same light Saab owners see Saab, and complain the cars are just Fords underneath.

    The exception being that the new Mondeo is an S80 underneath.

    Volvo is profitable because it has a very long history of joint ventures – the 340 was built by DAF in Holland in the 1908s, they had a big tie up with Renault for their engines right up to the Ford take over and the first generation S40 was a Mitsubishi joint venture (it shares a platfrm with the charisma). This really cut the cost of development.
    The reason Ford wanted Volvo was for the new crash simulator Volvo had just built and the S60 platform.

    The current Volvo design ethos was set by a brit who heads up Ford global design so I think claims that Saab desigh is being destoyed by being done in Germany is not correct and Saab production will continue in Trollhattan, just not all of it. Is the Saab ‘vert not really a Saab?

    Is it not also true that the current 9-3 is so much Saab that GM were a little bit upset? That says to me Saab is (ok was) more independent than Volvo were.

    Jaguar is a better indicator of where Saab would be with Ford – in the s**t. They would handle brilliantly though…

    Anyway, the future of car building for smaller manufacturers is to design and develop in house and sub contract production as per the 9-3 convertible and the Porsche Cayenne. Volvo and Jaguar / Landrover will end up at private equity companies.

  10. It seems like private equity companies are buying up everything. There was the recent sale of the Chrysler Group as well.

    I’m wondering who the heck would want to own a marque that loses amazing amounts of money? I mean, Daimler-Benz basically PAID to have Chrysler taken off their hands so I understand why that equity group which “bought” it would do so. They could turn it around and sell it in a few years for a huge profit. The Jeep brand alone is probably worth more than they paid for it.

  11. Good. I can’t wait too see volvo curl up in a ball and suffer. every volvo owner i know talks about how saab isn’t swedish anymore compared to volvo. and how much more indep. they are, regardless of ford’s ownership. i hope the chinese buy it. i guess the grass isn’t so green on the other side of the ford empire, now is it volvo.
    Now while volvo is trying to find a new home ,saab will be sitting by the pool with GM drinking champagne. (like i’m doing right now.)

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