Michael R sent me a link earlier in the week, to a big feature article on Saab published in the Swedish paper e24.se. It’s a long article, way too long for me to try and translate using my dodgy web translation tool.
Thankfully, ctm has come to the rescue!! When you see the length of this article, you’ll understand the effort that goes into translating it – thanks ctm!
There’s a lot of interesting stuff in here. I’m getting some things filtering through as well, and this article confirms some of the things I’m hearing.
Enjoy the reading.
Jan-Åke Jonsson, CEO Saab Automobile, admits that there have been some big mistakes that delayed product development at Saab. Now he faces two tough years before the arrival of new models. And the Trollhättan plant is about to be rationalized. No earlier than 2009 can Saab be profitable again.
Jan-Åke Jonsson is in deep concentration, working on a laptop in a small conference room. There are six chairs around a small table, nothing else. It is the Stockholm office for the Saab Automobile CEO, located in the buildings of GM Nordic in one of the suburbs. He looks up at the empty walls.
– “It is not very glamorous. But neither am I,” he says with a smile.
He was 22 years old when he started working at Saab. Now he has been CEO since 2005. And he faces some demanding challenges.
Probably the toughest of them all is one of the smallest model lineups in the auto industry. Its basically just the 9-3 and the 10 year old 9-5 – which, in the auto industry world, is ancient and losing sales. The low volumes mean that Saab loses money. Every day. Since GM became the sole owner of Saab in 2000, some 3 Billion USD has been put into the operation. During all this, GM has undergone what is maybe the biggest crisis ever in the auto industry. But, Jan-Åke Jonsson is tired of questions about whether or not GM still has confidence in a Saab Automobile that is bleeding.
– “We have that,” he says and adds that the restructuring of GM is working as planned – despite a reported heavy loss in the last quarter
– “Its was just a bookkeeping technicality. The most important thing is that the sale figures are good, especially in the US.”
If GM fails in its restructuring, the only thing that can save Saab could be in jeopardy: new models.
First in line in 2009 are the very important new crossover 9-4X and the new 9-5. With them, Saab should be able to reach the magic number of 150,000 sold cars per year and have sustainable profitability. Last year, Saab sold 133,000 cars. Simply put, from now on its all about making something from nothing. To continue to put polish on current models. And try to avoid heavy losses.
– “Since 2003, we have cut 1/3 of our structural costs by being more efficient.”
Now to the burning question: Why does it take Saab so long to bring new models to the market?
– “There have been some mistakes.”
He talks about the difference in opinions between Investor and GM during the 10 years with shared ownership. Periods of more or less paralyzed product development. Then the first 5 years with GM as sole owner, until 2005. A period when numerous projects were scrapped, among them the next generation 9-5. Suddenly, he becomes more cautious and careful with the words.
– “The product strategy was staggering,” he says.
Saab lost 15 years.
A new strategy was put in place in the beginning of 2005, part of it aimed to broaden the model lineup.
– “It’s firmly in place.”
At the moment, it’s almost all about ethanol. Saab’s investment in ethanol was one of luck and skill, remarkably well timed. Rick Wagoner, GM CEO, praises Saab’s ethanol cars. The Saab brand has gained in reputation and markets ouside Sweden are starting to show positive signs.
– “In France, 40% of the orders in October were for cars with ethanol engines,” he proudly states after digging through some Excel-files.
But a heated debate about the negative effects of ethanol has started, with opinions on competition with food production and harvesting of rain forest.
– “No matter how you look at it, from a CO2 standpoint it’s better to use ethanol than petrol or diesel. The ethanol is here today, and so is the infrastructure, so why not use it?”
But he emphasize that ethanol is only one part of the solution. There is an extensive development of hybrids going on in Trollhättan, something we probably will see in the new models in 2009. But that is something Jan-Åke Jonsson will not comment on.
– “The next 5 to 10 years will see a variety of solutions from GM to meet the CO2 regulations,” he says with a smile.
Saab has been criticized for the ethanol engines high fuel consumptions – taxi drivers tell stories about 1.6 liter per 10 km.
– “We are working hard to lower the consumption. We will make cylinder volumes smaller – but with the same effect.” And he mention 1.6 l ethanol engines with 150 bhp and 20% lower consumption.
But there are more than the cars that are about to be transformed. The Trollhättan plant, more than anything representing Saab in Sweden, faces some challenges. Today, 2453 people are working there.
– “We will have fewer people employed in a couple of years, that is absolutely clear.”
The current production of mostly 9-3 and 9-5 will be replaced with the new smaller Saab in about 2009. (The new 9-3 and 9-5 will be made in Rüsselsheim.) In the process, there will be rationalizations. Big time.
– “Today we build around 100,000 cars – but have the capacity for 150,000. Obviously, the floor area is too big.”
The production today is complex with a mix of several different models – which means large floor areas. The new smaller car is easier to produce – which means less space.
– “We are targeting a production of about 100,000 cars in a much smaller factory.”
But in the next moment he states that they must be flexible and be able to produce more.
– “If we can show that we can have an effective production, then we are “on the list”. Then, we can get more production to the plant.”
But it’s a delicate balance.
What happens if Rick Wagoner calls and ask if you can produce 150,000 cars when you have downsized all the way?
– “It’s a balancing act. We are not all the way into this question yet. We have to be flexible in a reasonable way.”
IN SIDEBAR OF ARTICLE
Saab 9-3: Premiered in 2003. Face-lifted this year. Built in Trollhättan. Makes up 2/3 of Saab’s production.
Saab 9-5: Premiered in 1997. Face-lifted in 2001 and 2005. Makes up 1/5 of Saab’s production.
Saab 9-7X: Large SUV based on Chevrolet TrailBlazer. Production will probably end next year. Built and sold in the US.
2009: The crossover Saab 9-4X and the new 9-5. To be premiered about the same time. 9-4X will be built in Mexico and 9-5 in Rüsselsheim.
2009-2010: Saab 9-1, a smaller Saab based on Opel Astra. To be built in Trollhättan.
2010-2011: Rumors about a bigger SUV to replace the 9-7X.
About Jan-Åke Jonsson
Residence: central Stockholm
Family: Marries, two children
Favorite team: AIK
Favorite movies: Mash and The Godfather. “Maybe not very good to say this, now that all the Dons have been arrested.”
Education: computer engineer
Employed by Saab in 1973 at age 22. Worked as a computer engineer. 1991-93 he held the position as Vice President, Sales and Marketing, USA. After that, he has held several positions before being President and CEO, Saab Automobile AB.
Soccer experience: played as a forward in Södertälje Sportklubb.
About the government funded research programs that are about to end in 2008: – “We could get even more of GM research to Trollhättan. But we need some firm decisions from the government for the years to come. We need to have them as a partner.”
About the pink dashboard in his first car, two-stroke 96 from 1964: – “I bought it for SEK 2.000 from two ladies that thought the dashboard looked dull and grey – so they had just painted it pink.”
NOTE: the official profile of JAJ can be found here: