Saab delay submission to creditors in order to continue negotiations

Re-posted

As the day in question is tomorrow and there are still a few headlines going around about this, I thought it wise to bring it back to the top of the page.

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Despite the sound of the headline, this is not a press release.

The purpose of this posting is two-fold: to talk of the delay in the submission to creditors that was planned for November 22, and to clarify what was going to happen on that date.

As has been mentioned in the media already, Saab/Swan and Guy Lofalk have taken a decision to delay submitting their composition proposal to creditors. According to the time plan mentioned at the Creditors Meeting on October 31, this proposal was due to be submitted on November 22. As with much of what’s happening as part of this process, however, that date on that October plan was a preliminary date, and subject to change depending on the prevailing circumstances.

Right now, the prevailing circumstances include ongoing negotiations with our partners and stakeholders. We submitted a purchase proposal to General Motors, which they rejected. We are now negotiating a proposal with a view to getting an outcome that will be acceptable to all parties and it was held that the November 22 submission should be delayed in order to facilitate those ongoing negotiations.

There’s been a fair bit of anxiety over the November 22 date and what it might entail for Saab. It has been described in some reports as another Creditors Meeting, which implies a decision point in the process. This is not actually the case.

What was actually due to happen was the submission of what is referred to as a composition proposal. This is a proposal sent to creditors by Saab for their consideration, one that specifies how Saab intends to pay back outstanding debts, as well as a proposal on future payment and delivery terms. Our creditors and suppliers have been notified about this delay by Saab’s purchasing department as part of our ongoing conversation with stakeholders.

There is no replacement date for November 22 at this stage, but obviously everyone concerned would like to get this process moving as soon as possible. We also have to get it right, however, and the first crucial step in getting it done right is to get a purchase proposal together that all parties can approve, which is what we’re working on right now.

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2 Comments

  1. Keeping our fingers crossed—-that this wonderful brand survives and that many of the thousands of good people working for Saab stay employed and get back to work soon.  It will be a terrible injustice and very disappointing outcome if that state of the art factory closes—-and this brand, with its rich history—-ends up relegated to history books.  Saab’s employees deserve better.  Saab’s customers deserve better.  For many of us, the anxiety is trying to figure out what new car to buy next if Saab isn’t an option.  It seems to me, there are two solutions to the GM objection:  1) Greatly curtail the amount of GM technology allowed to pass through in the sale and lower the purchase price to the Chinese partners.  They will still get a brand with loyal customers and they’ll still get an established dealer network.  For a time, model offerings will be slim, bordering on none.  But quickly enough, they can form partnerships to get Saab branded cars in showrooms.  Then, later, “true” newly developed Saabs will join the fray.  2)  The buyers and seller must pool some resources to make a decent financial offer to GM to keep the technology/cars in the mix for the sale.  I think it always comes down to money—-and if enough is offered to GM, their shareholders might be satisfied.  Perhaps some of the money earmarked for R&D for new Saabs (amounts in the hundreds of millions have been reported) can instead go to GM for this up front need.  That means less money for new model development—-but survival for Saab.  Perhaps for a reasonable amount, GM could license this for 5 years or so, at which time Saab will need to stand on their own or have new partnerships arranged.  SOMETHING has to happen to settle this in a positive way.  

  2. Oh, and if there’s no way to maintain the GM lifeline/models, here’s a question:  What happened to all of the tooling for the 1980s era 900?  Or, the 1960s era 96?  I mean, if that tooling is sitting around in a hangar or warehouse somewhere, take it out of mothballs, spend a couple hundred million in only the most essential updates and go retro!  We’d have the “New 96” as a competitor to the Mini and the Beetle and we’d have the “900 Classic” with NO COMPETITION!  I’d consider buying one of each.  That would buy at least a few years people, wouldn’t it? 

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