Thoughts on today's press release – cessation of agreement with Pang Da and Youngman

My first thought was to recover from the punch in the face it felt like I’d just received.

It was a blow, for sure.

The agreements that Swedish Automobile made with Pang Da and Youngman promised much in terms of future development for Saab. To have those agreements end in a flurry of last-minute activity like this is disappointing in the extreme. As employees, I think I can say that we all had faith in those agreements and what they could mean for the future of the company.

It’s a difficult blow, especially given the time constraints that the company faces. It’s not terminal, though. If you think you can write the script for the scenes that are to follow in this drama, then you haven’t learned a thing in the last six months.

A few things to remember here…..

Swedish Automobile NV had binding agreements in place, which it honoured exclusively with the parties involved, excluding other parties who were interested in the company. With the dissolution of these agreements, that exclusivity is now gone and there are others interested in what Saab have to offer.

Swedish Automobile NV has a board and a supervisory board who took this decision for considered reasons. It is not, as one automotive writer suggested, a matter of them wanting to have their cake and eat it, too. There are multiple stakeholders in this and the offer made to take over Saab didn’t reflect the value in the company, nor did it reflect the agreements that went before it, some of them less than 10 days old.

Saab doesn’t have a debt crisis. We have a liquidity crisis. Our debt is manageable if we are producing and selling vehicles. In that scenario, the value in the company is much greater than our present market capitalisation.

We are a fantastic company, building great cars designed by fantastic people and we have a market for them. What we don’t have at this second is the lubricant needed to get the machine moving – cash.

There are other entities out there who recognise this and will be attracted to investing in Saab and that scenario is better than a lowball offer such as the one that our board has just said no to.

We have time pressures, for sure. But it ain’t over yet. Not by a long shot.

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48 Comments

  1. Thank you for the update. In American Football this would be called running out the clock. I guess that makes this overtime. Cowboy Up.

  2. I spent the day outside thinking this was a “no news” day, being Sunday and all. Goes to show nothing is predictable with Saab. It sounds bad but there’s possibly a silver lining — I sure hope so.

  3. Trying to stay optimistic here. Saab owner and was going to purchase another one for the Mrs. but none have been manufactured for half a year. I remember reading in Motor Trend¬†Victor Muller’s goal of selling 80,000 units worldwide in 2012 or 2013, yikes.¬†At this point I’m waiting to see Swade’s site come up as, “503-Service Unavailable” THEN you’ll know this plucky little carmaker is done – till then the Mrs. will have to make do with her current car ūüôā GRIFFIN UP!

  4. http://www.rescue-saab.com/en/index.html used to run a campaign for Saab owners and fans to invest in the company in order to save it.¬† That was back at the time when GM threatened to shutter the company.¬† In the end, this initiative from the owners wasn’t required because Spyker emerged to save the day.

    I suppose the move could be resurrected if Saab ever need it, if Mr. Muller doesn’t mind the dilution of his ownership if there are suddenly thousands of Saab shareholders.

  5. Thanks Swade. As someone like you who also has access to behind the scenes info, I know just how frustrated you are by all the doomsday predictors, knowing what’s actually happening. In the end, this might actually have turned out for the best.

    1. If they manage to stay in business, you’re right.¬† Otherwise, they just sold out current Saab owners¬†because if they don’t find another viable investor, they’ll be out of business and the brand will be gone.¬†

  6. Help me out here: The Chinese ordered a fleet of Saabs and paid for them. Did they¬†just become one of Saab’s debtors?

    1. The pre-payment for the ordered cars is secured by a lien on the assets of Saab UK. So, yes, Saab owe them the cars or the money but not out of pocket if it comes to the worst.

  7. I live on a small pension and I’d buy shares in Saab if it would help the company stay afloat and build Saab cars again.

      1. I doubt that Rem… as I understand it they are at present suspended.
        I would like to buy the shares to support Saab , NOT make a profit of 35%, personally not being a greedy person IF I got my share price plus costs I’d be a happy person ūüôā

        1. There has been trading all day. Not suspended at all. It is not about greed. But it could be a way to upgrade your pension. ūüėČ

          1. Rem,
                   Sorry but on the London Stock market it shows Saab(Swan) shares as suspended.
            Now, I can live on my pension if I am careful BUT if I am frugal, I can also buy shares in SAAB. As I cannot buy or lease a SAAB car right now, due to other reasons that I cannot or will not go into … then surely buying shares is the only thing I can do, even if its only a small amount per month.

  8. I will either find a way, or make one.
    Latin proverb, most commonly attributed to Hannibal in response to
    his generals who had declared it impossible to cross the Alps with
    elephants … Nothing else would describe SAAB situation at this moment … Sell shares to fans ūüėÄ I’ll buy as much as I can ūüėÄ

  9. So what amount of  money would the suppliers be satisfied with to continue shipping parts?  50% payment, with the rest payable in the future?  And what about a marketing strategy to get the pubic interested again????

  10. You should go talk to warren buffet, if he’d throw his money at a turd like Bank of America he’d be willing to throw investment capital at a well run car company like Saab.

  11. Heh! I would too!

    I do wonder if it’s enough though. The deal with Pang Da and Youngman was for (correct me if I’m wrong) 200 million krona. And even if we had 5000 enthusiastic and willing supporters of Saab around the globe, they would each have to drop 6,000 USD, or 40,000 SEK into the cash stream to equal the chinese deal.
    I’d like to think us fans can do something financially to help… but I fear it’s out of the scope of normal individuals.

  12. So meany questions¬† and so little information , so we wait .¬† Your spot on Steven ,¬†good cars , good¬† company no cash . In the US we can only buy shares in SAAB through a 3rd party¬† “pink sheets ” listing and there is no volume ,¬†I’ve tried . I buy about $45,000 USD in dealer OEM¬†parts each year . I buy dealer parts for as meany things for SAAB cars as I can , but the backorder list is killing me and keys are at the top of the list at this time . I guess in a sence I’m part of the issue I keep the cars on the road and the customers happy . Miles and miles of smiles , I so wish I had the cash to sell new cars , people want them but like the rest of the market people are just¬†in fear of buying anything . WE need a long term solution . I have faith but I also feel so confused .¬† Dave ¬†

  13. BUMP UP THE MARKETING. Im sorry to say, but i havent seen SAAB “try” to sell any of their cars since being pulled from the hole, that they fell back in. SAAB needs to shove its product to the consumers face, and over do it. Start making commericals and ads…. alot of them, something sassy, informative, something targeting the 25-60yr old crowd. You know why other brands are doing so well? AD’s AD’s AD’s. I sat at home and watched the new commercial for the new Hyundai Veloster, and i thought wow….i got up and went to the dealership to check it out, am I going to trade in my 01 9-3 Vert for it? HELL NO. But it got me up and thinking about that car. SAAB….pull your head out of your ass and get moving on speaking out to the U.S. market and over do it….its the only option you have at this point….get people to the dealership….get them to buy the car. I would like to see the 2012 9-3 in the future…dont screw it up.

    1. It’s pretty amazing that every time I hear about ‚Äúmore ads‚ÄĚ, it’s from someone in the US. True, here in Sweden we don’t have to be reminded that Saab still exist, as some in the US might think it’s all gone.

      I think Tim Colbeck, at SCNA, said that with ads you often pay for a lot “uninterested eyeballs”; i.e. you’ll have to focus on where and how, and especially under current circumstances. Using the Internet, using events etc. building up an awareness, experiences of what it is to drive a Saab, showing it etc.

      But I guess that some US guys would like some Super Bowl ads, or similar, but such things cost plenty! So it has to be done with some very good thoughts about how and where.

      That said, I agree with you and the general gist in the comment, we wish the very best for Saab.

      1. Tripodis:¬† Audi runs “more ads” and so does BMW, Mercedes, Volkswagan, Hyundai, Kia, Subaru—–the list goes on.¬† What do all of these companies have in common?¬† They all sell a lot more cars in North America than Saab.¬† You know who didn’t run enough ads?¬† Peugeot.¬† They’re now out of North America.¬† Suzuki doesn’t run enough ads.¬† If they don’t rethink that, they will be out of this market by 2020.¬† I don’t disagree with you that it’s a lot of¬†unitended eyeballs you’ll reach—–but you need to do that sometimes to reach the intended ones.¬† Advertising—-a lot of it—-is still a great way to move product.¬†

        1. Angelo, ¬†the other thing they have in common is absolutely huge economic bases to draw resources from. ¬†We don’t and won’t have that. ¬†We have to think smarter about how we can reach the exact target audience that we need to reach. ¬†A scattergun approach would be nice if we had the resources, but we won’t.

          Peugeot, Renault, Alfa Romeo, etc, have all been out of the North American scene for a long time now, two decades at minimum (for Alfa). ¬†My understanding is that they had to leave because they 1) had reliability issues in the 80s and 2) made cars that were just quite far removed from the norm in the USA. ¬†They’ve probably addressed the reliability issues sufficiently, but the costs of re-establishing their brands would be astronomical for a return of very marginal sales. ¬†We’re fortunate in that we still have a faithful base to talk to, but we’ll need to do that quick and do it well.

          1. I understand the need to do guerrilla marketing when working with limited resources, so I’ll agree with you that Saab won’t be buying commercials during the Super Bowl anytime soon.¬† But in addition to not doing ENOUGH advertising, Saab, most recently, wasn’t sending the right message, at least not in the U.S.¬† Avant garde, obscure “Born From Jets” references did not and will not draw new customers to the showrooms.¬† They needed to run simpler advertisements, pushing the virtues of efficency, reliability, safety—-and more graphics of the cars—-close ups of the interiors (which people seem to love in Saabs—even non-owners).¬† Also, in the product line, they sorely needed an entry level car, perhaps a small wagon or hatchback, to bring in newer, younger buyers.¬† For a true turnaround, Saab will need to focus on the low end, like they did when they were first in business and first in the U.S.¬† They¬†have to offer a car, in today’s¬†U.S. dollars, around 20,000.¬† Small but space efficient.¬† Doesn’t need to be a performance car—-a normally aspirated 4 cylinder would be just fine.¬† Later, a¬†couple diesels (sourced from companies that have already met U.S. diesel regulations) would be nice.¬† Compete with VW and Subaru and stop trying to chase BMW—it won’t work.¬† This is why I see so much opportuniity in involving the Chinese.¬† Saab could really reinvent themselves.¬†¬†¬†¬†

    2. OK, Bryan. Since I work for a small, humble family owned dealer in New England and we aren’t advertising,¬†I thought I’d start¬†a direct marketing campaign, starting here with you!. I¬†hope this will¬†get you up and bring you into¬†our Saab dealership.

      -I can’t offer flashy, in your face advertising.
      -I can’t overdo things,¬†like the cars I sell and drive, I tend to be understated.
      -I can’t be gaudy and trendy but rather timeless with an understated cutting edginess (again, like the cars I sell and drive).

      Here’s what I can do….
      -I can offer a product, a Saab vehicle, that arguably represents the most car for your money compared to everything else on the market even though we don’t like to be compared to anything else on the market. (our cars, our style and our views are rather unique)
      -I can make the case for my statement above
      -I can offer extraordinary service, before, during and after the purchase
      -I can promise you’ll be treated with decency and respect.
      -I can offer an individualized sales process tailored to you.
      -I can work on your terms and at your pace without pressuring you.
      -I can offer as much product information as you can handle.
      -I can promise easy, stress free pricing.
      -I can’t offer BS
      Now get your head out of your ass, stay out of the Hyundai showrooms and come buy a Saab!
      (I can offer some sassiness, but only if you want it)

      1. Saab never offered what you just did in their advertising.¬† They offered “Born From Jets” and obscure references that North American audiences didn’t have a clue about.¬† Their ad agency failed them in some ways—-but really, even the ads might have worked had Saab committed to more advertising.¬†¬†I guess maybe it’s unfair to be so critical of the ad agency when their message didn’t reach enough people, enough times.

      2. Tom, i know what YOU can offer me (probably the best), but its the point of the rest of the public. THEY DONT KNOW what SAAB has to offer anymore….. I support you and all other SAAB dealers and Indie-Shops alike, and thank you for all you guys are doing, stickin in there. Im not saying the dealership is the one screwing it up, its SAAB in general, im glad others see what im trying to say too….The public has almost forgotten about SAAB. They need to be reminded of what the SAAB Brand is all about, what it represents, what it has to offer….with out advertisement, how is that word suppose to get out? Last time i saw SAAB on T.V. was about it going under, infact…you talk about SAAB with anyone and they say “Oh yea!….arent they done now?”…..its sad.

    3. In the U.S., their advertising has been anemic.¬† Instead of focusing on “Born From Jets,” they should have been talking about reliability, practicality, economy of the turbocharged engines, etc.¬† Like Peugeot, Saab has been cursed with not understanding how to sell cars in North America.¬†

  14. I¬īve tried to make a swedish bank interested in opening an investing fund where Saab fans cound make a contribution and make themself usefull in the process. The fund will not be¬†driven out of greed but out of passion for cars. The number of investers have to be about 200-300′ so if every Saab-owner i Sweden signed up we could say “This is it”¬†¬†¬†

  15. Everything you write is true—-except for one catch:¬† If this company goes out of business and the brand dies, dealerships close, etc.—-the fact that the takeover was denied is a REAL punch in the gut to the legions of Saab owners—-who will see resale values hit rock bottom, parts in short supply, even fewer places to get their cars serviced—-and more terrible issues.¬† If there is truly a plan, a realistic¬†alternative¬†for a new lifeline and financial support, fine, go for it.¬† But if this was a matter of being insulted by the offer and the company goes away in the coming weeks, it was a really poor decision by Saab’s management.¬† ANOTHER really poor decision.

    1. To judge about that, as you do, one has to know what the deal meant, and also what kind of deal Swan (Spyker) signed with GM et al; if Saab, as we know it, can be sold to a new 100% owner, I’m thinking about IP, brand name etc. etc. and still being Saab. I assume that is the end result you would like; it still being a Saab.

      That said, if what I have heard is true, it was also a really, really low offer.

      It’s so simple to say, oh my, why didn’t they sell it then it would survive. Well, if one doesn’t know some of the things I mentioned above, and more, then it’s pretty bold to say that it was “ANOTHER really poor decision”. There might be complex issues, and if one doesn’t have knowledge, I think one should be careful before judging other.

      1. Trpodis:¬† I’m looking at it from a historical perspective—-recent history includes the GM years.¬† My saying¬†“ANOTHER” when talking about questionable decisions and non-decisions is quite accurate.¬† If there hadn’t been a series of poor management decisions, the company wouldn’t be on the verge of going out of business¬†right now.¬† They have largely ignored the lower end of the market, where first time buyers are captured and maintained.¬†¬†Their advertising has been both infrequent and non-effective—-a bad combination.¬† They ignored the virtues of their cars that would capture positive attention, and showed more airplanes/jets in their ads than cars.¬† I’ve seen this trouble coming for years—-like watching an ievitable train wreck.¬† Hopefully they can work their way out of it.¬† I would love to see them reinvent themselves and get back to their roots.¬†

    2. Angelo,

      If they declined the offer simply out of spite and greed, I’d agree. ¬†The reality, however, is that it wasn’t an offer that could fly in any case. ¬†Victor Muller spoke about it in the Swedish press today. ¬†It was absurdly low, to begin with, but it also had a raft of conditions attached that made it unfeasible. ¬†They know this, which is why the parties are still talking.

  16. I’d also buy some SAAB shares if there was a quick and easy way to do that. I’m sure there are enough SAAB fans out there to raise part of the money that is necessary to keep things afloat…

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