'The Deal' and the future

This is a long one….

Another week of work has begun here at Saab. Another week to be patient whilst the deals that are in the pipeline are worked out and negotiated. It’s certainly not an easy time for people here. They are anxious, for sure, but they’re still here; that’s the most important thing.

We remain in somewhat of a holding pattern at the moment. We’re waiting for The Deal. While we’re waiting for The Deal, employees are returning from their customary summer vacations, arriving at work and going about whatever business they can. The carpark here at Saab was more full this morning than at any time over the last five or so weeks, a sight that was a pleasure to see on this cool, rainy Monday.

The Deal that our executive team are currently working on is the one that will carry us through this near-term liquidity shortfall and into the future, so that we can re-start production and get back to being a car company again, which would be a nice relief from our present role as a corporate piñata.

Coverage of the situation has been interesting. There are now day-by-day accounts of the legal mechanisms that are in place for our stakeholders in this situation. Those mechanisms are a matter of procedural fact. We’re aware of them and the deadlines they involve, we address them as best we can, as methodically as we can, as the various situations arise. We want nothing more than to be rid of them, to re-establish normal relations with our stakeholders. This is why we’re negotiating The Deal with such vigour.

It’s as frustrating for us as it is for any other interested parties that we can’t talk about it more, but such is the nature of these negotiations. Our stakeholders are either waiting and going about their other business, or in some instances, taking advantage of the various mechanisms available to them to safeguard their futures. We hope to be able to help them set those mechanisms aside in the near term.

In the meantime, there are rumours about this, and rumours about that. One such rumour sent our corporate parent’s share price up 40% last week – which is one reason why we have to restrict communications about ongoing negotiations: we are a listed company. The other reason is that if we respond directly to this rumour, then we have to respond to the next rumour as well. The press can keep taking pot-shots until they get the response they’re looking for. My advice is to be very cautious with what’s written in the press, especially if it is un-sourced.

As an employee, I wait and I look towards the future because whilst the immediate situation is urgent, it’s not one that I can influence (we have people far more qualified on the case already). And despite the urgency of the immediate situation, if one were to calm down and consider the bigger picture, there is still plenty of untapped potential at Saab:

1. The Brand

The Saab name has taken a bit of a beating in the last 18 months but at it’s core, it’s still a very desireable brand.

If you’re a young, emerging company, you can’t create 60+ years of history and achievement overnight. As one of my colleagues here at Saab pointed out a week or so ago, if you were ‘doing a Lexus’ – creating a luxury/premium arm from nothing – you would most likely commission a study into what that new brand should represent, what its typical clientele would look like, where it should be positioned, etc. After spending those millions of dollars, you would end up with a document that more or less would describe Saab.

This company has an intrinsic value that’s boosted even further by our new products, our modern plant and our excellent technical capabilities. When you’ve got all of those things, you’ve got something you can build on, something that will be of interest.

2. The present stuff

For those of you who think I’m living in dreamland, the following are immediate releases that would hit the market just weeks after the factory starts rolling again. All have been mentioned in the past, but their respective launches have all been overrun by our current situation to some degree. We will need to ‘re-launch’ many, if not all, of these products.

The first of these is the Saab 9-4x, which is being produced under contract and distributed right now around the United States. Our ability to effectively market this excellent first entry into the crossover market has been stifled by news surrounding our current situation. This is a huge release for the North American market and should do very well for Saab when we can support it more effectively.

Then there is the low emissions TTiD versions of the Saab 9-3 range. The Sport Sedan version has been out since late last year, but the big news for many of our European markets is that the sub-120kg/km CO2 model is now also available in the popular SportCombi body style. The tax concessions for this low-emissions vehicle are significant and Saab has managed to achieve these concessions with no reduction in power or vehicle size. You cannot overestimate how important this is for many of our markets, particularly Sweden and Great Britiain (two of our top three markets). The low-emissions SportCombi release has been completely lost in news surrounding the business.

And finally, we also have the much-anticipated release of the Saab 9-5 SportCombi. This launch should be happening right now, but of course has been delayed thanks to other matters. Again, the sportcombi body style is of huge importance to many of our European markets in particular, and was growing in importance in the US now that other manufacturers have discontinued their wagon bodied vehicles there.

Three essentially new offerings for our markets – all of which are outstanding achievements and all of them are ready right now. Not next year. Now. This is one of the reasons I remain extremely optimistic about the value of Saab.

3. The future stuff

We have some of the best automotive engineers/partners in the business and there is plenty going on that will come in the near/medium term as well:

ePower fleet to go out – our ePower test fleet is scheduled to go out soon, although the program has obviously moved at a much slower pace in recent months, working with existing resources rather than additional resources.

eXWD – a tentative title, but more importantly, a very exciting innovation due on the new Saab 9-3 when it is released, developed by eAAM, a body owned jointly by Saab and American Axle.

IQon – Android-based connectivity and functionality for your car. This is not just displaying your phone’s internals on a screen. It’s integrated with the car and will transform information and control systems within the automotive sector.

New Saab 9-3 under development – this is the pinnacle. Our new releases in the Saab 9-5 and the Saab 9-4x are both excellent vehicles, but it’s our new entry-level vehicle that many are anticipating. It will feature our new powertrain co-operation with BMW, our new eXWD system, our new IQon system, all wrapped up in a package designed by our award-winning design team.

4. A few other things

Partners in China and new distribution in Russia. – We have several key markets already, but our entry into growth corridors like China and Russia is of significant importance. We have fantastic partners in both regions and the growth potential for our company in the medium term is outstanding.

Victor Muller – It has been extremely disappointing to read some of the material printed about our Chairman and current CEO. Many seem to forget the obstacles he had to overcome to acquire Saab in the first place. Some even suggest that he is draining the company of funds (which doesn’t quite explain why employees have still been paid over the last months) – the defamation that he’s endured has been phenomenal. Victor Muller is part of a team – he’s a key part of that team, but a team member nonetheless – that is working around the clock on this situation. You bet against my boss and his team’s capabilities at your own risk.

Lessons learned – We’re in a tough spot. And if you think we haven’t learned things to apply to the future operations of this company, then think again. The people who work here, they love working here. Maybe their intestinal fortitude is being tested in the current situation, but generally speaking, under more normal circumstances, people want to come and work for Saab. And we all want to do everything we can to ensure the company’s success into the future.

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48 Comments

  1. Great article.  They say “No news is good news” but “no news” often means speculation and rumors presented as facts.  And “no news” from Saab is even more difficult to digest.  I think we’re all anxiously waiting for that news about The Deal.

    2011 is just going to be a memory of bad dream when Saab is a profitable and successful company again in a few years, churning out new Saabs at a steady rate from the factory in Trollhattan.

  2. If Saab can make it through this year, it will be here.  We are all hoping for the best.  I don’t want a Lexus – my friend who has one said her ex-husband was less trouble.  I want a new Saab.

  3. Excellent writing.  Of course journalism abhors a vacuum, they must fill their space with rumor and innuendo in the absence of hard data while we patiently wait for The Deal to be done.   

  4. Once again your presentation of the facts, along with your take on things, have given me hope that this will all work out in the end. If The Deal comes to pass, the future Saab should generate even more passion than the first 60+ years did. 

  5.  Hang on my friends…Saab will make it through this. The groundwork has been set for a great future, and those of us with at least an ounce of intelligence know that Victor Muller is the best thing that’s happened to Saab in many years! It’s outrageous to see him maligned by the less than reputable tabloid press. It’s only a matter of time before they’re forced to eat their own words, and they’ll realize how distasteful their comments have actually been!!Happy Saabing Swade…and thanks again for all your hard work!

  6. Very good writing as usual, Swade!

    I’ve been pretty much out of the loop for a month. Has there been any actual news regarding The Deal during this time? (I’m sure there’s been plenty of media speculation, but that I really DON’T need to hear about.)

    1. Hi Börjesson,

      No specifics about The Deal have come forth, which is one of the reasons so many people are frustrated.  But right now it’s about the ongoing process.  The biggest question is time – how much will it take?  We remain very hopeful and optimistic for all the reasons stated above.

      1. OK, thanks! Situation basically unchanged, then. Is production still scheduled to restart on the 29th? Or is that a moving goalpost, X days after the signing of The Deal?

  7. At least, Swade, you’ve confirmed that a deal is a possibility.  Before, it was all rumor and speculation.  This gives me great hope that Saab will pull through.  Thanks for giving us a little news to chew on.  My spirits are raised considerably.

  8. Thanks Swade about this post, I have better sleep next night. I also think, going through times like this Saab is stronger than ever! Go Saab Go!

  9. Great piece of work, Saab’s future is definitely bright, all companies face some form of difficulty at certain periods, Saab will emerge a stronger brand than before. 

  10. Ah! So there is indeed a major deal in the pipeline – presumably at the stage of drawing up the contracts, or you wouldn’t be allowed to talk about it it? However, this is all rather last minute stuff don’t you think? I think that you could perhaps forgive some questioning of faith amongst the congregation.

  11. Gosh, I hope the Deal is a big deal. I sometimes wonder why you guys have not pleaded with a larger player for a buyout that would supplement them (eg: Porche for instance). That’s what is really going to solidify things. Either that or a huge loan or the backing of the Swedish government…which as an American over here watching this story unfold, should be embarrassed by their lack of empathy and concern. 

  12. Today I had the experience of driving a “Audi A5 Sportsback 3.0 TDI quattro”. Now I’m sure Saab has to survive. It can’t be that everyone wants to drive such a car.

    As the time passes by I get more and more the impression that the question is no more IF but WHEN.

    Swade, thank you for refreshing my memories on why Saab will survive.

  13. Hi Steven,

    I know you know, that so many Saab people (builders & buyers) listen to you….and rightly so.

    Critic are ten a penny (I’ve had my 1/2 penny’s worth, as well), but genuinely I think most of it has been because of the long slog, that now takes us to Mid August & Autumn 2011.

    The old saying ‘silence is golden’, also breads the ‘I know the answer’ crowd, when in fact it is all hearsay.

    I look forward to the day, when the headlines read….’SAAB, The line is rolling again’, as no doubt you & all the Saab people there do too.

    To this end, keep the pressure up & thank you all for your due diligence……….. 

  14. Yes … Go Saab Go!

    The 9-4x is brilliant.  Too bad this piñata phase at Saab is detracting from it and other great products like the new 9-5 sedan and upcoming 9-5 ‘Combi.  I spent some time this past Saturday with Chad at Just Saab Dayton OH and their showroom floor 9-4x Aero.  Wow.  The owner of the 9-4x reported as a sale on July 23 over at SaabsUnited pulled into the lot as we were talking.  Wow.  Just wow.  The 9-4x looks even better in motion. 

    … I really need to hurry up and pay off my 2009 9-5 Combi …

    Griffin Up!

    1. The 9-4x is definitely a cracker, Mitch.  People probably thought I talked it up too much, but it really is that good to look at and more importantly, to drive.  A great, great vehicle.

  15. Hi Swade…. José Galvão here, from Portugal ( Saab Portugal Clube ).

    I have to leave a word in behalf of “owr” Chairman and CEO Victor Muller. I know he doesn´t need no defenders but i have to speak my mind…

    You are spot on on your review about him.
    I (personally) didn´t like either the negativity around him in the web and personally in some blogs were we thought it shouldn´t be. But that´s my perspective.
    Anyone else in VM shoes surely had been long gone by now facing all of this.
    But that´s the thing you get when you are too exposed to the public and things don´t go smooth as silk.
    And as we all know, Saab brand generates lots of emotions in people… there for we are some of the most passionate followers.
    VM must be shielded. He have on his back an entire brand to rescue and he need to be focus.
    The huss and fuss around him today it can only be as a lesson for the future preventing him from this sittuation.

    We are all keeping owr fingers crossed. Here in Portugal, Saab brand is seen as an super-premium brand veeery expensive and almost dead ( some say it´s already dead ). We as an club are trying to reach out and tell people WE WERE SAVED and WE ARE ALIVE but this clube is only 6 years old and is “active” since ´07… nevertheless we make some gatherings with some dealers to help them tell in their towns that saab brand lives…

    All this to say i know that carring this (SAAB) plane alone isn´t easy… and VM is taking all the bullets as Chairman and CEO.
    As i carry my (club) aircraft alone i know that all the efford isn´t recognised – as it happen to VM.
    Please keep him motivaded and shielded…

    Bring “The Deal” …

    Yours trully:

    J.Galvão
    Saab Portugal Clube

  16. I´m so full of admiration and respect for what you do and how you act.

    And cannot imagine a life without driving SAAB…

    Actually me and my husband have been praying for the company and its employees for eight months now – daily.
    God bless you and please do not give up!

    We are about to have our cares striped with: “SAAB. We did it.”

    Move your mind, folks 😉

    1. Cheers, Painter.  Please make sure your colleagues there in the paintshop get to see it as well.  I get concerned about the level of spread we’ve got even within Saab itself sometimes.  And I’ve got to get there and watch you folks work some time.

  17. I could not agree more with every words and I would appreciate if some other popular blogs would have a more accurate look upon Saab even if it is understable to have doubts about an automotive that has stopped production for 5 monthes. What has done VM since december 2009 for Saab, nobody has. Saab is still alive and has a future.

  18. Hi Swade

    I´ve been driving SAAB for all of my life. Got a 9-5 Griffin from 2009 now…but need to change it before new year since I have it for 3 years now…a leasing car as you understand.

    Do you have a clue about the delivery time of a new 9-5 Sport Combi when (if) the production will start again ? I guess they have some cars to deliver to Kina as well since they already got paid for that 🙂

    I really, really don´t wanna change brand…so i cross my fingers the prodution will start again 29/8 so I can order a new 9-5 Aero that will come with santa later this year 🙂

    Keep up the good work !!!

    // Svansen

  19. Once again it is good to read your level headed comment upon Saab’s situation; an excellent piece of inspirational writing when all around there is rumour and speculation.

  20. First I want to say that I am a true Saabist at heart and have two classics in mint condition after 10 years of maintenance and upgrade investment.  A 900 Turbo Convertible and a 9000CSE, which I have no plans to sell to anyone ever, as I still love their quality so much.  But, Swade, what you and no one seems to be addressing is something a doctor of mine brought to my attention during an office visit recently which turned into a referendum on which car to buy – one of his choices was the new 9-5, and that is the very real and almost insurmountable obstacle now and for the foreseeable future – the new customer’s fear that after a purchase, even after a few years, that Saab will go under and then parts and supplies will drive the cost of ownership to unaffordable levels for most everyone.  No matter what, you can’t prove to these people that Saab will be here to stay, because even you don’t really know.  So, very sadly, I predict that sales will be slow even if the Deal is reached because of the public dragging through the mud of the brand and therefore the doubts about company stability and longevity.

  21. The best I heard/read for a long time! Keep up the good work! During the GM time there where much longer time between the good product news than during this first time of independence. I lift my hat for Muller and “the SAAB team”!

  22. This is
    very well written and excellent public relations but it does not explain why
    the company totally ignores its dealers. Even a listed company has an
    obligation to communicate with its partners and therefore any critics on Victor
    Mueller are self-applied. The Dealers have an obligation towards their
    customers which they cannot fulfil at the time (ordered cars, missing parts)
    and they cannot even explain to their customers what’s happening – this simply won’t
    do.

  23. You mention the e-power car – this bears similarities to the Chevy Volt and Vauxhall Ampere. Presumably, this car was developed during GM ownership. What was SAAB`s input into the whole concept?

    1. Tony, the Saab ePower car is fully electric, whereas the Volt/Ampera use a range extender to prolong the charge.  ePower is still an experimental vehicle at the moment, using battery technology from Boston Power (US) and battery management systems from True Electric (Sweden).  We had an ePower vehicle, essentially an electric Saab 9-3 SportCombi, at Almedalen Week here in Sweden last month and a fleet of around 70 of them will be trialled, starting soon.

      You can read about it more at that link, and I should have some video of it in action, coming very soon.  

    2. Saab engineers played a key role in vehicle development of the Volt powertrain.
      However that does not explain why it has a Saab hood.

  24. I switched from a ubiquitous BMW 3 series to a new model Saab 9-5 in April. The main reason was for what the brand stands for: individuality, understatedness and integrity (sorry if it sounds a bit cheesy but I really believe it) but also to square the circle as my dad had a Saab 99 in the late 1970’s which he and I remember very fondly. I can honestly say everyone who has seen it thinks the car is eye catching in a way that sets is apart from the corporate car masses and all think it is much more expensive than it really is. With all that in mind I really believe that Saab has a great future once this current hump can be cleared so will be keeping everything crossed that ‘The Deal’ will happen and vital cashflow secured. Good luck Saab.

    1. Congratulations to you, iainch, and thankyou, too.  And no cheesiness at all – there is indeed an integrity to this brand that’s quite unique and that we’re determined to rebuild and preserve.

  25. Swade,

    Thanks for everything that you do for Saab and please pass on to Victor that are a lot of us who understand he is working 24-7 to pull off the financing for Saab and just how much effort that is taking.  I can’t think of a better person right now to head Saab. Just one more thing – I believe. GO SAAB!

  26. I’m interested in the new 9-3 if and only if you offer something better than the puny 1.6L.  I love my 9-3 but it is seriously lacking in power compared to the competition. Next time around the ergonomics won’t offset the performance issue no matter how fantastic the ergonomics may be.

  27. SAAB
    marketing needs to move away from the current esoteric tree’s, ice and wind
    blowing and get back to the high tech; dare I say sexy “Born from Jets
    reference”. Yes, I can speak as a new owner of a 9-5; and as one of the first SAAB
    9-5 buyers in South Florida. Yes, I love my car for its performance, safety,
    and technology. The “Born from Jets” reference  I am told is to be dropped. Hey the Born from Jets is/well was brilliant – my wife
    is not a car nut but, remebers the SAAB ads with the Jets flying and the SAAB racing underneath. It called image and maybe wishful persona. Look we almost bought a Volvo
    for safety and a lot more dealers but they seemed dull. Also look at the new Infinity
    M35, this car is close in shape and luxury and price. Drop the whole BioPower label’
    which is on the back of my car and means zippo to anyone; all BioPower means is
    flex fuel which is on just about every GM care somewhere. Try and find an E85
    pump in Palm Beach county , good luck..I found 1 E85 station in Coral Springs,
    FL.

    So let’s
    re-start  the Image of “Born from Jets”;
    vs BMW the Ultimate Driving Machine, and Porsche – “there is no
    substitute” – Also, brilliant bring the SAAB Performance team to key US
    key markets. The Barrette Jackson Auto shows bring out the buyers in the market
    segment your trying to attract for cars in the high $30,000 to $50,000 this is
    not your Honda Accord, Camry, and Mazada buyers guys..

    Hey, if I
    am wrong then why aren’t the new shiny SAABs 9-5 selling and the new Hyundai Genesis selling, same prices guys. I checked out the Hyuandai and those fake Bently like wings cost an additional $800.00 …so people like the car not the name and yet they sell…

    Hey, if I
    am wrong then why aren’t the new shiny SAABs 9-5 selling and the new Hyundai Genesis selling, same prices guys. I checked out the Hyuandai and those fake Bently like wings cost an additional $800.00 …so people like the car not the name and yet they sell…

  28. If the reviews are to tell the tale, this freshly released brand will do well in the SUV class. It even has Android-based connectivity and functionality! This high-tech feature will definitely draw in consumers.
    Tyra Shortino

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