Editorial Archives - Page 6 of 9

The start of another rollercoaster week at Saab Automobile

Want an idea of what it’s like working at Saab Automobile right now?

Last week we had a failed application for reorganisation of the company. Downer.
Late in the week, we galvanised and employees heard that the executive team would spend the weekend preparing an appeal. Steady.
This morning we announced a licensing and bridge finance deal. Upper.
And then this afternoon comes news that two of our employee unions have filed for bankruptcy. Downer.

That’s the rollercoaster we’re on at the moment. They say a week is a long time in politics. A single day can be a long time at Saab. If you’re along for the ride – and I know there are a lot of people along for the ride with us – here’s the Swade guide to reading what’s going on in a few key areas right now.

Reorganisation

Our appeal with the Swedish courts has been lodged in Vanersborg and will be on its way from there to Gothenburg this afternoon. We have taken steps to beef up the initial application and some of those steps are now public knowledge.

We’ve provided some more insight into ‘the China process’, for example, which should hopefully give people a better ideas as to why we have a lot of confidence in our arrangements in China.

We’ve also signed an agreement this morning that will provide bridge financing through licensing (not all-out selling) of our Phoenix platform technology.

The rejection of our initial application for reorganisation last week was certainly a surprise and a blow for Saab. However, as Victor Muller pointed out last week, our executive team were ‘throwing the kitchen sink’ into our appeal to ensure that any lack of information noted in the judgement would be addressed.

Bankruptcy filing

As I write this, news stories are beginning to circulate about the fact that two of our employee unions are filing for bankruptcy today. Here’s the BBC article.

These are unfortunate headlines, however when reading them one should bear the timeline for these competing processes in mind. The unions need to act on behalf of their members, so a filing like this is not a complete surprise. However, should Saab’s appeal be a successful one and we are granted reorganisation, the bankruptcy filing would effectively be rendered moot.

We expect a response to our appeal some time later this week, whereas it’s my understanding that the bankruptcy filing would take several weeks to get a verdict. The unions know this, too, but they have an interest in acting for their members and securing payments as early as possible if the worst happens, which is a fair thing to do.

The future?

Can we predict it with any certainty? Of course not. This is has been a story with more twists than Chubby Checker.

BUT…..

We have strong partners on our side and their applications for approvals in China are progressing well. Today’s bridge finance agreement could be taken as a sign of the faith that Youngman place in the future of this company, and the things that they, we and Pang Da believe we can do together.
We have a strong portfolio of Saab vehicles. That’s the reason we’re here in the first place – and it’s only getting better.

If you haven’t read it yet, I recommend you read my series from last weekend, entitled In Saab’s Corner. It takes you through some of the things we’ve got going on right now and I think you’ll find it to be encouraging reading.

Our self-belief and determination isn’t a measure of cockiness. We couldn’t be more humbled than what we are right now and we know that we have a lot of business to take care of when everything gets rolling.

Rather, our self-belief and determination are a measure of the faith we have in the preparations that we’ve made, and in the plans that we have for the future. We can do this. We can get this done. We just want the chance to do so.

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In Saab’s Corner – our deals with Pang Da and Youngman

On July 4th, Saab signed agreements with two Chinese companies, Pang Da and Youngman. The signatures on those deals converted what was a Memorandum of Understanding into a binding agreement that subject to approvals, will provide the stability, strength and reach into new markets that Saab needs to be a sustainable and successful car company.

There has been some doubt in the community as to whether or not those approvals will be forthcoming. The big tick has to come from the National Development and Reform Committee (NDRC) in China.

Two of the key Saab players in the deals with Pang Da and Youngman are Anna Petre, our Director of Government Relations, and Martin Larsson, our Director of Business Development. They both spoke with Trollhattan’s local newspaper, TTELA, yesterday and they gave a bit of insight into the process and how it is evolving. In a nutshell:

The applications are made by Pang Da and Youngman, not by Saab, but Saab is in constant contact with all involved and provides all information required by the applicants.
The applications go through several stages of approval at levels more local/regional than the national level, prior to being reviewed by the NDRC itself. You progress though one level to the next, and so on. Our progress through this very structured process continues, and the progress that we’ve made so far gives us confidence that the deal will be approved in the near term.

You cannot place enough emphasis on what these deals mean for Saab.

Many have looked simply at the buy-in price of €245,000,000 and concluded that that’s not enough for Saab to commence sustainable operations. What they seem to overlook is that that figure is just the buy-in price. There will be investment in vehicle development, joint-venture manufacturing as well as assistance for re-financing that will change the operation of this company completely.

In Pang Da, we have access to the biggest publicly traded dealership group in China, with over 1,100 outlets. This is a significant in-road into what is now the world’s largest automotive market and will provide Saab with increased demand as well as a much larger distribution network that is already well established and has strong customer links.

In Youngman, we have a manufacturing partner that will see us eventually develop and build vehicles in China for distribution in China and other markets, whilst still maintaining our base and manufacturing in Trollhattan. We also have an agreement in place with Youngman for the development of three new Saab vehicles that were not in our previous product plans – tentatively named as the 9-1, 9-6 and 9-7.

Again, you cannot place enough emphasis on what these deals mean for Saab’s future. It means a stable financial base, increased consumer confidence, vehicle development, manufacturing and distribution. The interests of Pang Da and Youngman do not end when they buy-in to this company. That’s where they begin.

As we speak right now, this is the future that we are seeking a bridge to.

Thoughts on Saab’s reorganisation application and rejection

Enthusiast first. Employee (close) second.

Like most of you who have been part of my personal journey with Saab, I thought we’d seen the end of the extreme ups and downs surrounding this company when it was sold by General Motors last year. The sale process was a tumultuous one, certainly busier than this in a media sense, but I have to say that it was a much brighter landscape to be writing in compared to what we’re facing now.

Back then, we had a rock-solid belief in the future of this company, it’s reason for being here and the potential for it to be a great, niche carmaker once again. A Saab company, independent from General Motors and backed to pursue its own ideas and technologies was (and is) considered to be capable of great things. As a community, we united behind the company because of a common goal and in some ways, a common ‘enemy’ that we saw in GM, who were threatening to close the company down.

This time, it’s a little different.

Continue reading Thoughts on Saab’s reorganisation application and rejection

Comment: Life at Saab this week

One thing’s for sure around here: Life next week is not going to be the same as life this week.

Over the last four months, and especially in the last few weeks, I have come to develop an even deeper respect for the people I now have the privilege of calling colleagues – my fellow Saab employees.

It’s been a tough time here and I’ve faced my own personal challenges as part of that, but I’ve come to realise that I’m surrounded by veterans who have endured plenty of challenges in the past. Some of those challenges have lasted months, some years (heck, if they survived two decades inside GM’s decision matrix, they can survive anything).

More tests are to come this week.

As I write this, we are awaiting the release of our parent company’s mid-year financial reports, which will be published this afternoon. I have no doubt that there will be another outpouring of damaging headlines for Saab as a result of those reports. What else could one expect after spending almost half of that six-month period without making any cars? Whatever rare nuggets of optimistic news might be in those reports, the factory stoppage will most likely dominate the bottom line and the consequences will dominate the headlines here.

As with previous media outrages over management fees, executive pay and dealership loyalty, these headlines will prove to be a current-day outrage based on historical data. I don’t mean to downplay the severity of the results, but we’re already living with the effects of our first six months activity, right now.

No. Financial reports are not what’s foremost in my mind this week. In fact, the financial reports are not even on my personal radar. What’s important right now is the next 36 hours or so.

This week we have a hard, tight deadline from our employees’ unions. Our management team must find money for wages and salaries or the unions are likely to commence actions in the Swedish courts. This is a fast-closing situation and one that has real and immediate consequences.

I wrote a few weeks ago about the fact that our leadership have been working tirelessly on deals to get this company through the short term liquidity crisis that we face. We have long-term deals in place that we’re very confident about, but we need a short-term bridge to get us to those deals. That’s what they’ve been working on and that’s what will continue to be prominent in most Saab employees’ minds in the coming days.

I’ve still been at my desk every day because there have still been things to write about every day. The people I see here are concerned about the future, for sure, but there’s still a sense of camaraderie here – a shared sense of purpose and determination. Despite the troubles of recent times, people still believe in this company, our raison d’être and our growing product program. Some are taking steps to investigate options for the future. Such measures make sense at times like these. But the vast majority are hanging in there because they want to be part of Saab’s success.

So. Tonight we’ll all hunker down. I know the news will be poor and I know that much will be made of this in the media. I also know that in the overall scheme of things, it’s nowhere near as important as what has to come in the next few days.

As I said at the beginning. Either way, life next week will not be the same as life this week.

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Faith in Saab – One dealer’s perspective

The following was sent in via email from AJ Murphy, General Manager of Just Saab, a dealership in Cincinnati, Ohio.

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It’s no surprise to anyone that has followed the Saab business for the last couple of years that we are an easy target in the media. Often there are biased, personal feelings dominating articles and commentary. Understandably expected by the ‘blogs’ but it’s now creeping into the more established, well-respected outlets that you expect to get factual, balanced reporting from.

Saab is not for everyone. No question. We don’t sell a lot of cars…even in our heyday we were considered a minor player in the market.

Our labels have been many: Irrelevant, re-badged GM products, dying, too expensive, and on and on.

I am baffled by such strong personal feelings for Saab’s demise. If Saab is not for you, fair enough. But strangely those who dislike Saab are almost drawn to us…they can’t stay away or stop talking about us. It’s almost as if they take joy in the struggles.

For example:

I responded recently to a personal tweet from an Automotive Analyst, which said:

“I’d like to pull the plug of the respirator that’s keeping Saab alive”

Then another that said:

“Can Saab please die and stop clogging my Twitter feed??”

This, coming from an industry-professional who has been quoted in a couple of different articles about the future of Saab? Seems like strange behavior but maybe I’m too thin-skinned. [Ed: You’re not. The internet has given rise to a need for many to grab as many eyeballs as possible and glib throwaway one-liners are the biggest club in the bag for many – SW]

Getting to my purpose in writing this…

I was recently quoted in an article by a widely-read industry publication with the headline, “Steady drip of bad news wears on Saab dealers”. My words were recorded accurately. But I was still left troubled by the context of the article. I’ll explain why.

Continue reading Faith in Saab – One dealer’s perspective

50 ways to leave your lover

Enthusiast first. Employee (close) second.

One of the reports that’s really turned into a kick in the guts for a lot of the people that I talk to at Saab, and for our dealer body worldwide, is a report going around via the Associated Press at the moment. It’s basis was in Swedish media late last week and elements of this report are now being circulated via AP.

The original report covered the decision of a Swedish dealership chain to drop Saab from its inventory. Holmgrens Bil, the dealership in question, is led by a gentleman named Benny Holmgren and he’s quoted in media as follows (translation from the original Swedish by Stockholm News):

For me, it is important to be proud of the brands that we have. SAAB does not deliver cars as they promise, they do not pay wages to their employees, nor debts to its suppliers, while the owners pick out big money. It does not feel right.

If that quote seems familiar, it’s because I also used it the other day in talking about how erroneous reports can create erroneous perceptions about the company.

There’s a deeper problem, here, however. What motivates a guy like Benny Holmgren to say this?

As noted by one of his colleagues in a report by TTELA, Holmgren has been a Saab dealer for around 20 years. He built his business largely on the back of our products and he proudly notes that his chain is one of the top 5 Saab dealers in the world. That business has grown to such an extent that BMW recently approved Holmgrens Bil’s acquisition of a BMW/Mini franchise. In some ways, we’re pleased for him. Happy dealers are good dealers and we’d love for all of our dealers to be happier right now. But if you’re going to leave a 20-year relationship that’s helped you to grow and build your base for the future, then why leave it by kicking a former business associate so viciously when they’re down?

We are very concerned for our dealerships around the world. We know they have businesses, employees and families to think about and we know that some are taking decisions to either scale back, suspend or even cease their involvement with Saab. We want to hold on to every one of them and get back to building cars for them, but we know that our current situation makes life as hard for them as it is for us.

A decision can be respected. But a public questioning and denouncement of our morals on the way out?

Saab’s problem right now comes down to one thing and one thing only – a cash shortage. We didn’t have enough cash to meet obligations at one stage earlier this year and key suppliers made a decision that it was too big a risk for them to allow us to trade our way out of that situation. To win them back, we need to find the cash.

Our fault. Our task to fix. We are working on it flat-out.

We have set deals in motion to ensure the long term future of the company. We have to wait for those deals to be approved and in the meantime, we need to find a bridge to that future.

We have tried to remain communicative about the situation, but every missed deadline that we’ve communicated leads to a degree of public condemnation, regardless of the sincerity of the stated goal. We now communicate developments when they happen and simply assure as best we can that we’re working to bridge the problem, which we are.

Contrary to the quote above, we have paid our workers, even those who have been idled by the production stoppage for some months now. There have been timing issues with recent payments but we’ve made efforts to overcome those because we are committed to keeping our workforce intact.

And again, contrary to the quote above, our supervisory board members are not taking money out of the company. On the contrary, they haven’t been paid for some time.

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Mr Holmgren’s press statement did two things: It got his name and new franchises in the paper and it made life even more difficult for his (former) contemporaries in Saab dealer-land. I also note with some disappointment and some fear that parts of the media are now actively seeking similar stories and statements from Saab dealers and staff.

We know that we have only one solution to our situation – finding the finance to get things going again on a continual basis. We’re certainly doing all that we can and our #1 goal is still getting back to building cars and supporting our customers and our dealership network.

We certainly appreciate the support that our dealerships have shown for us, and for our mutual customers.

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Additional information regarding Swedish Automobile NV supervisory board remuneration

Further to information we circulated last week concerning reports in Swedish media:

Last Thursday, we commented on the media headlines about raised remuneration to members of the Swedish Automobile Supervisory Board. In addition to what was said then, we can now clarify further:

The board members have not received any compensation since January 1, 2010. The new fee will not be paid until Saab Automobile has the entire business up and running again. An independent company was hired to make sure that the remuneration is appropriate and in line with what other similar companies provide their board members.

Related story: Saab Comments on recent media (related to board remuneration).

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Wars of Perception

I was talking earlier this week with a prominent Saab person (a non-employee) about the situation Saab is in right now.

He opined that there were two ‘Saab’ entities going around at the moment. One is the Saab that’s constantly the subject of automotive news reports, a company in desperate need of resources and constantly struggling to get to the next safe-point in its existence. The other is a car company that has great new vehicles, some brilliant engineers and designers, a rich history, a great philosophy behind what it does and lots of promising technology.

I tend to agree. I try and write as much as I can about that second Saab because it’s the one that I always wanted to work for, the one that I represent now and the one that excites me when I think of the future.

But of course, the two are inextricably linked. The first cannot operate without the second and right now, the second is very busy getting its house in order. When that happens, we’re going to be very busy rebuilding the confidence of our stakeholders – our customers, dealers, suppliers and others. And this is just another area where we’re going to have a battle to fight.

Continue reading Wars of Perception

Saab comments on recent media

Earlier today we saw media headlines about raised remuneration to members of the Swedish Automobile supervisory board. These reports contain a number of factual flaws.< Firstly, the reports claiming that Mr Hugenholtz is the only person remaining on the supervisory board of Swedish Automobile are not correct. The three members (Hugenholtz, La Noce and Roepers) are all in place and continue working to secure the future of Saab Automobile. Secondly, when Spyker Cars NV (now Swedish Automobile, SWAN) acquired Saab Automobile AB, the company became much larger and the responsibilities of the board members increased significantly. Because of this, and as there was already an imbalance in fees between various members of the board, the issue was on the agenda for the Annual General Meeting on May 19 this year. At that meeting, a decision was taken to regulate the fees to make them more in line with each other and also to adjust them to reflect the extended responsibilities caused by the acquisition of Saab. These kinds of fees are paid retroactively for the work done since Saab was acquired by Spyker (now Swan). It is important to note that remuneration decisions of this kind can only be taken with the support of a majority of shareholders and timing for the Annual General Meeting for May 2011 was set well in advance of the meeting taking place.

Brief comment on recent events regarding debt enforcement

For various reasons – legality and confidentiality – we can’t comment in detail on proceedings that are taking place from today via the Kronofogden enforcement agency here in Sweden.

All I can do for the moment is simply repeat what I wrote earlier this week in an editorial on this site – The Deal and the Future:

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.

A process is in place. The core focus for us, whilst we fully cooperate with this process, is to do the right deal to get our business back on track. That’s the one solution to address this issue, and other issues as well.