Trollhättan, Sweden: Management of Swedish Automobile N.V. (Swan) and Saab Automobile AB (Saab Automobile) confirm that the reorganization is progressing and that a first payment by Youngman under the bridge loan funding commitment as announced on September 12 was received by Saab Automobile.
Further payments under the amended and final bridge loan agreements signed between Youngman and Saab Automobile are expected to be made during this week and by October 22 of this year. It is the intention to repay the bridge loan with the proceeds of the EUR 245 million equity investments by Youngman and Pang Da, which are still subject to approval by relevant authorities and parties which Swan expects to receive during the next weeks.
One thing I know about running a Saab community website is that everyone’s got something to say if you give them the opportunity 🙂
Saab are running an efficiency program at the moment called Project Cheetah. We’re aiming to increase our competitiveness wherever we can inside the company. I thought it might be interesting to get your thoughts on where we could do less, or more importantly, do better.
Remember: Cheetah is about increasing efficiency and reducing cost, it’s not directly related to increasing revenues (though that’s a desired result, too, from doing things better). This is a cost-side program, so no suggestions about sales incentives or model configurations at this time, please.
On the other hand, though, your thoughts about marketing materials, for example, would be suitable. Any suggestions on how you, as a customer, could see us increasing our effectiveness in our relationships with you would be most welcome. How do you want us to communicate with you, for example?
How can we do better with what we’ve got if we give it a tweak and make it more effective?
The Cheetah is the world’s fastest land-based animal and right now, Saab is looking to employ some speed when dealing with reorganising its business. We are aiming to make substantial efficiency gains and cost savings as we become more competitive for the future.
Work began on Project Cheetah on the strategic level even before the reorganisation decision came through. Today, just days after the reorganisation decision, meetings are already taking place around the company with individual sections of the business looking at how they can do things smarter, leaner and meaner.
Saab has a well-ingrained culture of consultation, seeking suggestions from employees as to how their particular work area can operate better. Saab actually won a Swedish lean production award a few years ago for it’s work in developing and implementing this type of system. Cheetah is this process on steroids, with everyone involved.
Cheetah is a cost-structure project. It doesn’t specifically look at how to increase sales and revenue. That’s the other side of our profitability equation that will receive intense attention. Cheetah will play into this, however, because getting ourselves even more competitive, coming through the reorganisation process successfully and getting production up and running again will play a significant part in boosting consumer confidence about the future of Saab.
Cheetah is being overseen by a steering group, under which four functional teams are being used to look at the whole business structure at Saab. The four functional teams are:
Manufacturing and purchasing
Product development, including engineering and powertrain
Sales, Marketing, Aftersales and communication
Administration
There will also be a cross-functional team to handle appropriate areas requiring co-ordination between the four functional teams.
The individual units within these teams will be getting together very quickly, taking suggestions from the troops on the ground as to how their operations can be better and more efficiently structured. Much of our recent past has been involved with the carve-out of business operations from the systems that were in place from the GM days. Cheetah will be an opportunity to create a new ‘Saab way’ of working more efficiently and effectively within our own systems, instead of working in transition as we’ve done in the recent past.
The initial workings of the project are expected to be completed late October. This will be the consultation and planning process. We will seek to implement changes discovered during the consultation and planning process by the end of 2011 in order to have the new, more competitive structure in place for the beginning of 2012.
It’s been another big week or so in the immediate life and times of Saab Automobile. We’re relieved to be in calmer waters now, but we know that there’s a lot of work to be done and we have plans in place to do it.
You can read some initial information about Project Cheetah in English here, or in Swedish here. I’ll see if there’s some more information about this process that I can bring forward in the near future.
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If you’re still catching up on what’s happened with Saab this week, the best summary news article is at Bloomberg (as usual).
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And on the same theme, here’s some video of Victor Muller from yesterday, reacting to the reorganisation decision. Video picked up by Saabworld.
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Your must-read for this week is the Saab 900 Enduro website.
If you’re not familiar with it, the Saab 900 Enduro is a rather bonkers edition of the 900 that was commissioned by Saab Australia back when the 900 first came out. There were only 12 of them ever made and it’s thought that only half of those still exist.
I’m hoping to do a video with at least one – and maybe more – of the existing Enduros, some time in the near future. Contact was made earlier this year and we’re just waiting on some further restoration to one of the cars.
Should be fun.
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Those of you who are interested in scale model Saabs really, and I mean really, have to add Griffin Models to your bookmark list.
The site’s not complete, but when you visit, you can see some of the stuff they’ll be selling, as well as reading about how they’re making them. Hand made from scratch.
Great stuff.
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I have a couple of other links to send on, but they’re so big that they really deserve posts of their own.
It’s a strange feeling, to celebrate entering a process that most companies would prefer to avoid. However, it gives you an idea as to how beaten down Saab has been in the public’s mind (and in our own, to some extent) when I tell you that there were, indeed, some small celebrations here today after the court in Gothenburg approved our appeal and granted us ‘reorganisation’ status.
For us as a company, it means that actions against us by unions and creditors are on hold (or withdrawn) whilst we reorganise our operations. It means that we have a stable climate in which we can get our house in order, organise our operations and plan for a re-start of production in an orderly manner without having to fend off arrows from so many different directions.
For our staff, who have done it tough in the last month but have still turned up for work and done whatever they could to keep things going, it means some welcome financial relief.
For our other stakeholders, who have supported us so much in some pretty dark times, I hope that it’s the light at the end of the tunnel getting a little bit brighter. We have a road map for where we’re going and today’s decision will be of great assistance in getting there.
For me personally, and I think for many others as well, there is the realisation that whilst this decision is a positive outcome (it beats the hell out of the alternative), it also means that the real work for Saab begins now (again). This decision gives us some space and some calmer waters in which to operate, but there’s still a hell of a lot of work to be done in order to bring this company around.
We have to negotiate with, and then pay, our suppliers. We have to get production up and running so that we can supply our distributors. We have to reorganise the company so that it’s more efficient and effective. We have to communicate our message effectively whilst giving the papers nothing to write about.
All of that’s going to require a lot of work, but I know that our people are up to the task. Today there was a brief moment where we could feel some relief, but the processes that will underpin our internal reorganisation are already in motion and this is where the real work begins.
I was chatting with a colleague this morning, and he likened this whole drama to a never-ending movie, with all its ups and downs, underdogs, villains and near-death experiences. We both agreed that it would be nice to write the final scene now, one where the main characters go off into the sunset to lead a normal, outwardly boring existence doing whatever it is that they do.
We design and build great Swedish cars. It’d be so wonderful to get back to doing just that.
If you haven’t done so yet, I’d recommend that you read In Saab’s Corner – a series of posts I did a few weeks ago outlining the many things this company has got going for it. We have a lot to share with the world and we can’t wait to do it.
Trollhättan, Sweden: Swedish Automobile N.V. (Swan) announces that Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB (collectively Saab Automobile) received approval for their proposal for voluntary reorganization from the Court of Appeal in Gothenburg, Sweden today. The purpose of the voluntary reorganization process is to secure short-term stability while simultaneously attracting additional funding, pending the inflow of the equity contributions by Pang Da and Youngman.
The Swedish Company Reorganization Act says that an application shall not be approved unless there is reasonable cause to assume that the purpose of the reorganization will be achieved. In today’s decision, the Court of Appeal has found that such conditions exist, thereby overturning an earlier ruling by the District Court in Vänersborg, Sweden.
As a consequence of the Court of Appeal ruling, Saab Automobile will request for the bankruptcy filings by unions IF Metall, Unionen and Ledarna to be cancelled.
We’ve just heard that the Swedish court has approved our appeal, and thereby granted us reorganisation status. This decision will provide stability that’s much needed as we get things together in advance of our dealing with Chinese partners in the future.
COURT OF APPEAL GRANTS RIGHT OF APPEAL TO SAAB AUTOMOBILE IN VOLUNTARY REORGANIZATION CASE
Zeewolde, The Netherlands, 19 September 2011 – Swedish Automobile N.V. (Swan) announces that Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB (collectively Saab Automobile) received a right to appeal from the Court of Appeal in Gothenburg, Sweden today in their efforts to obtain approval for its proposal for voluntary reorganization.
Saab Automobile is pleased with the Court’s decision and will now await further developments. The Court of Appeal is expected to rule shortly on Saab Automobile’s appeal against the decision by the District Court in Vänersborg to reject Saab Automobile’s proposal for voluntary reorganization.
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And written prior to the press release…..
The court in Gothenburg has agreed to consider Saab’s appeal against the decision made last week in Vanersborg.
That’s the first “yes” we needed to hear.
Now, the case will be considered by a panel of judges, who will either rule in favour of Saab’s application for Reorganisation (the second ‘Yes’), or will rule against, which Saab could theoretically then appeal to the Supreme Court in Sweden.
This is a pretty big reorganisation application, said to be one of the biggest in Sweden and almost definitely the biggest taken to the appeal stage. Whilst the court has an obligation under the law to deal with the decision quickly, it’s possibly going to take a little time as they consider the precedent they’re setting. They do aim to have a decision prior to any scheduled bankruptcy hearing, the first of which is due on Sept 26. So bankruptcy filings at this point are little more than legal positioning and reason for a headline.
We still have confidence in them reaching a favourable reorganisation decision. Why? Because our business is still a good one with a lot going for it and that should be evident from the material supplied to the court.
Some news from inside Saab that I thought you’d be interested in seeing. The process so far and the processes to come.
Important bit of good news first…..
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Important milestone achieved in China process
Today, the PDRC, the provincial equivalent of the National Development and Reform
Commission (NDRC) approved the deal between Saab, Pang Da and Youngman. The decision is an important step in the process of getting NDRC’s approval.
There are three levels of this authority:
DRC – the local authority, which has already given its approval
PDRC – the provincial authority, which thus gave its approval today
NDRC – the National Authority
We have passed two of the three levels, and will now proceed to the NDRC.
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A summary of the events of recent days
Wednesday, September 7th Saab Automobile applied for voluntary reorganization in Vänersborg.
The scope of the application included Saab Automobile AB, Saab Automobile Powertrain AB and Saab Automobile Tools AB. Other units, including Saab Parts and foreign subsidiaries (including Saab Great Britian and Saab Cars North America), were excluded.
Thursday, September 8 it was announced in Vänersborg that the court rejected the Saab reorganisation application.
The same day, Saab announced its intention to appeal this decision, because it disagreed with how the court interprets the law and its application.
The appeal was submitted to the District Court on Monday 12 September.
The new documentation, among other things, included a number of improvements implemented since the first reconstruction in 2009
Letters from Pang Da and Youngman were included, thatclarify their commitment to Saab, and also to state that they have no reason to believe that the approval process with the Chinese authorities would not be completed or that there will be unexpected delays.
As part of the reorganisation application, Saab also added information about a new contract that guarantees a so-called “bridge loan” of 70 million euros, roughly equivalent to 622 million SEK.
Monday 12 September, two Unions filed for bankruptcy for Saab.
According to information, it may take at least a few weeks for the court to consider this petition, which is a separate process from Saab’s reorganisation application, which is to be decided immediately.
Both the leaders of the Unions have signaled that they contribute to the stay of bankruptcy if the Court of Appeal will take time to deal with reorganisation application.
What happens next?
District Court will now send the appeal to the Court of Appeal. It is the district court’s duty to do so promptly. They have chosen to do so by postal mail, which means that the appeal will reach the Court of Appeal on Wednesday 14 September.
The Court of Appeal first has to permit an appeal, that is, decide whether to reconsider the matter. It is the first time they have to consider a case of this kind and it is difficult to estimate how long it will take. It is estimated that it will take between one and a couple of days. After a decision to permit the appeal, it should be dealt with immediately in accordance with the law.
It is in any case, likely that Saab’s appeal to the Court of Appeal will be dealt with more quickly than the unions’ petition to the district court.
I hate to sound like a broken record, but I’m going to have to wheel out the mantra we used back when Saab was being sold in 2009/10.
Please observe the non-official spokesmodel to the right (original vendor here and thanks to Hugh for the reminder).
We know that some Saab-related stories seem to cause an almost hysterical reaction here in Sweden, but sometimes it really can be an over-reaction. Take yesterday’s stories about the timing of the bankruptcy filing, for example. It’s a piece of minutiae that gave papers something to report on, but it should have been little more than a minor note.
Here’s how it broke down.
Unions filed their bankruptcy request yesterday. Saab also filed their appeal yesterday, but we filed a little after the 1530 deadline to get it from Vanersborg to Gothenburg on the same day (the 1530 deadline became a story during the day). Swedish news services are now running a “which filing will win the race” theme, which is basically a non-story.
Saab’s appeal filing is expected to be resolved within days. The court first has to agree to hear the appeal. Assuming that happens, the law regarding reorganisation states that a resolution should be forthcoming immediately, which we can loosely expect to mean “as soon as possible”.
We have provided more detailed information that has to be considered, so it may take a little longer to read, but that detailed information should allow for a quicker and more clear-cut decision, too. Bottom line: it is reasonable to expect a resolution of our appeal within days of it being received (technically, it will be received tomorrow).
If left to run its course, the unions’ bankruptcy filing is expected to be resolved in several weeks from now.
Effectively, there is no race. If Saab’s appeal succeeds then wages should be paid under the government scheme and the unions would withdraw their action. If Saab’s appeal fails, then we’re up a very smelly waterway without adequate means of transportation – and plan D kicks in.
So, if you’re a Saab fan and you hear slightly high-pitched reports in the media, don’t panic. If someone you know starts talking about this supposed legal ‘race’, please direct them to the lady pictured above. Or just send them here.
