True story: I remember a time when I was a young kid growing up in Melbourne. I was playing in our front yard. It was a summer’s day and the ground was dry, but the clouds were menacing. I heard a noise growing louder in the distance and as I stood up, I could see hard rain falling on Mrs Groves’ house, on the other side of the street. The rain moved slowly across the road towards our place and soon I was running towards the house, but I was soaked before I got to the door.
Sometimes you can see stuff coming but try as you might, you still can’t avoid it.
There have been a few interesting articles in the last few days that make a few interesting statements when it comes to Saab’s situation – if you’ve got the eyes to see and the memory to put them in context. They speak not only to Saab’s current sale status but also to the way some things happened as Saab struggled for life in 2011.
I should write to Saab’s bankruptcy administrators and ask for a commission. Every time I write that the sale to NEVS is imminent, Youngman submit what one has to presume is an improved offer. It’s not helping, though, because the process just drags on even longer and the only people acting as if Youngman are still a realistic prospect in this process are Youngman themselves.
Everyone else is acting and preparing for the fact that they won’t be buying Saab. Saab Parts AB provides one example.
The head of Sweden’s National Debt Office, Bo Lundgren, was happy to talk on the record last week about what they’ll have to do as Saab Parts AB’s long term owners if that’s how things turn out. They’re even looking at expanding into selling parts for other brands so as to prolong the life of the business. The presumption underpinning all this is twofold: 1) That Saab Parts AB will not be sold (as NEVS don’t want it), and 2) there won’t be any new Saabs like the old ones and therefore, Saab Parts AB’s major pool of customers will dry up within the decade.
Of course, it’s prudent to plan for both scenarios – Saab Parts AB being sold or being left unsold – but every article I read about this last week pointed to the unsold scenario.
Another article shown to me today comes from Bloomberg and is written by Ola Kinnander (who, personally speaking, is my most trusted journo in Sweden). The article is concerned with discussions over the use of the Saab name by a prospective new owner.
I can’t find an online link, but here’s part of what I received via email today:
Saab Brand Said to Be Final Hurdle in Carmaker’s Bankruptcy Sale
2012-06-11 13:09:20.826 GMT
By Ola Kinnander
June 11 (Bloomberg) — The right to use the Saab brand name is the last major hurdle in the sale of bankrupt Saab Automobile to a group led by a Japanese investment firm and a Chinese energy company, two people familiar with the situation said.
The bankruptcy administrators leading the disposal of the Swedish carmaker are trying to secure the right to use the Saab name and logo from defense company Saab AB and truckmaker Scania AB on behalf of the Chinese-Japanese group, said the people, who declined to be named as the talks are private. Saab AB, Saab Auto and Scania, once a single company, own the brand name together and must approve of its transfer to a new party.
“Regardless of who buys Saab Automobile, we need significant information about the plans that any potential new owner may have as it’s crucial that the brand name is taken care of properly,” Erik Ljungberg, Scania’s spokesman, said. “We’ve gotten some information, but some is still lacking.” Scania has met with representatives of the consortium to discuss the brand issue, Ljungberg said, declining to say whether it has also met with other bidders.
Perhaps importantly, in terms of an outcome……
“It’s important that the future owner of Saab Automobile has a similar view of the brand that we do and that the use of the brand name doesn’t conflict with the businesses that we and Scania represent. We still lack some key information to be able to proceed with this.”
Once again, you have a key player in this whole scenario acting like it’s a fait accompli in terms of a sale to NEVS. The only question is whether or not me writing those words again will trigger another raised bid from Youngman 🙂
At the top of the article I mentioned not only indicators, but also some memory triggers. Let’s get to those. Please note, this section might make some people unhappy, which is OK. Everybody’s unhappy with something when it comes to this whole debacle. This might simply add to a long list for a few readers.
First of all, let’s head back to that article about the NDO preparing to own Saab Parts AB for the long term.
The NDO is an arm of the Swedish Government. That’s the same Swedish Government that basically did nothing to help Saab during the company’s troubles and yes, it’s the same Swedish Government that vowed not to end up owning a car company.
OK, this is a parts company rather than a car company, but the principle remains intact. Not only do we see them now owning the parts company, they’re planning on expanding its operations so as to prolong its life.
On one hand, I’m quite happy for them to be thinking this way. I have former colleagues and friends who are now working for Saab Parts AB and their associated offices around the world. I’m pleased that the NDO is doing something that will secure their collective futures. I also accept and understand that the NDO owns this company not by choice, but by necessity. It’s right that they try and build value into the company.
However, it’s ironic that a government so opposed to helping Saab for the sake of gaining some political capital now owns, and will seek to build up, part of the Saab business that they were so reluctant to get involved with.
Saab didn’t want, and never asked for, government ownership in Sweden. All Saab wanted was some help and cooperation. The cost of that help and cooperation would have been many times less than the costs now incurred by the Swedish Government having to support, subsidise and/or re-train so many displaced Saab employees. The only scenario under which the Swedish taxpayer would have been out of pocket was a failure by Saab, which is exactly what the government helped to bring about by their politics and to no small extent, by their negligence.
The Swedish Government? May the fleas of a thousand camels infest their armpits!
The second article that interested me was one that included a quote from FKG, a supplier industry body in Sweden.
The head of the Swedish automotive suppliers’ association FKG, Fredrik Sidahl, told Sweden’s Sveriges Radio that he would be disappointed if Saab’s new owners planned to build electric cars.
“We had hoped that it would be a buyer who intended to continue to build some Saab models,” he said. “If it is electric cars, there is no volume production.”
Again, I had some friends that worked for companies that were suppliers to Saab. They suffered along with Saab employees when the bankruptcy came, some of them losing their jobs even before it came.
I personally find it hard to sympathise with Mr Sidahl about FKG’s situation. I don’t have time to look back at all the articles from the time to see if it was FKG or CLEPA (or both), but my memory is seared with statements by supplier groups just after Saab’s factory shut down back in April 2011. Statements to the effect that Saab/Spyker couldn’t be trusted. Statements saying that the company was unreliable, etc.
There was one particular representative from one of these supplier groups who seemed to relish every opportunity to talk our business down. This hurt a lot because the Swedish press reports were already at a fever pitch when it came to Saab stories. Saab had a cash shortage at the time and payments did fall behind. We acknowledged that, took responsibility for it and tried to rectify the situation (remember, it was a much smaller and much more manageable problem at the time of the initial shutdown and could have been fixed).
The response to our attempts? The Swedish government stonewalled prospective deals that could have assisted our cashflow and our suppliers decided, acting in solidarity as a single group, that they wouldn’t deliver any parts to Saab.
Of course, the longer it dragged on, the more precarious the situation became and as that happened, suppliers could be justified for their position.
But in those initial stages after the shutdown, a time when Saab could have traded their way out of this problem (sales were starting to grow again and new models were imminent), what we got – amongst other things – was an endless thrashing from the head of one supplier group and a group action from suppliers to not deliver parts. This was part of (not all of) the initial momentum that drove Saab into a downward spiral leading to a more severe business climate and eventually, to Saab’s bankruptcy.
Bottom line: I’m sorry that those supplier organisations are in a difficult position, but they did point the gun at their own foot more than once.