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The End for Saab – Really This Time?

Administrator wants to end reorganization despite additional investment in carmaker.

by on Oct.20, 2011

It's increasingly likely Saab's factory in Trollhattan will never build another 9-5.

Saab’s court-appointed administrator will ask to have the automaker’s voluntary reorganization terminated immediately, a move that could force the liquidation of the long-troubled Swedish brand.

The move comes just hours after a private equity firm in the U.S. agreed to purchase $10 million in stock from Saab parent, Swedish Automobile and make available an additional $60 million loan.  Last week, Chinese investors came up with an estimated $15 million to help keep Saab going with an additional $81 million in bridge loans to follow before month’s end.

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But with bills mounting daily, even as its core assembly plant in Trollhattan, Sweden remains shuttered, administrator Guy Lofalk appears to have concluded that there is no way to turn things around and that a bankruptcy would be the best opportunity to maximize what can be recovered from Saab’s assets.

“Saab Automobile shall contest this application and request for continuation of the voluntary reorganization process,” the maker announced in a terse statement, adding that, “Simultaneously, Saab Automobile shall apply at the court for replacement of Mr. Lofalk as administrator.”


$157 Mil Bank Deal May Save Saab

Meanwhile, Saab owners halt sale of Spyker sports car unit.

by on Sep.02, 2011

A partially assembled Saab sits on the line in Trollhattan. The plant has been shuttered since late March.

Cash-starved Saab Automobile is close to landing a $157 million bank loan that could help it steer clear of bankruptcy, according to reports.

The deal, if completed, would provide enough cash to cover current salaries, pay off angry suppliers who’ve been threatening to force the carmaker into foreclosure and possibly even get the maker’s headquarters assembly plant, in Trollhattan, Sweden, running again for the first time since suppliers began boycotting Saab in late March.  But as with a variety of other rescue efforts, it is taking longer than expected to lock down the billion-kronor loan.

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Saab’s situation has been steadily deteriorating since then despite the maker inking a variety of deals – including one with China’s largest auto distribution network, Pangda – which were supposed to raise the cash necessary to cover its bills.  One deal collapsed soon after it was announced, while most of the others have run into a miasma of regulatory delays that have kept much-needed cash out of Saab’s corporate coffers.

But in a surprise move, parent Swedish Automobile says it has suspended plans to sell its Spyker sports car subsidiary to the Russian banking tycoon Vladimir Antonov.  The $46 million deal was intended to raise cash and permit the company to focus on its larger, Swedish-based business.


Saab Reportedly Seeking Court Protection

Maker hoping to buy time to line up new funds.

by on Aug.26, 2011

Image By: Len Katz

Saab Chairman Victor Muller may be forced to seek court protection to avoid the complete collapse of the Swedish company.

With another payroll likely to be missed and suppliers still refusing to provide the parts it needs to re-open its headquarters assembly plant, Saab is reportedly ready to seek court protection to buy time as it goes searching for more funding.

The news came hours after the maker said it would delay the release of its first-half 2011 financial report.  That report, now scheduled for next week, is expected to be grim.  The maker has produced only a small number of vehicles since it was struck by a supplier boycott, in late March, triggered by unpaid bills.  Despite lining up a series of potential alliances that management had hoped would resolve its financial problems those deals remain tied up in bureaucratic analysis leaving the maker struggling for its survival.

In a terse statement, parent company Swedish Automobile N.V., or SWAN, said it was “aware of certain reports in Swedish media related to a possible filing…for a voluntary reorganization under Swedish law.”

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The statement neither confirmed nor denied the reports, first aired on Swedish public radio but said only that the company is “evaluating all available options” and is “in discussions with several parties to secure the short-term and medium-term funding of Saab Automobile to restart and sustain production.”


Saab Resumes Production

Deal with Pang Da moves forward.

by on May.27, 2011

Saab 9-5s rolling off the Trollhattan line.

For the first time since April 4, cars are rolling off the Saab assembly line in Trollhattan, Sweden, marking a turning point in a financial crisis that came close to crushing the struggling maker.

Operations at the maker’s headquarters plant came to a halt when suppliers launched a boycott over unpaid bills.  With sales running short of expectations, the maker was forced to seek additional sources of short-term funding, but several initial proposals – including a deal with Chinese automaker Hawtai — fell through, raising questions about Saab’s viability.

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But, earlier this month, the Swedish maker lined up an alternate deal with the major Chinese dealership chain, Pang Da.  The preliminary agreement is moving ahead and Saab was able to reach an agreement with its vendors to once again begin stocking its Trollhattan plant.

“This is a great day for our company and it is great to see the plant running again. We have gone through a rough patch in recent weeks, but Saab is back in action again,” said Victor Muller, chairman of Saab and the head of the Dutch-based company that acquired the Swedish firm from General Motors in February 2010.


Saab Lines Up New Chinese Partner

Will deal finally allow Saab to reopen its assembly plant?

by on May.16, 2011

A partially-assembled 9-5 body sits on the currently idled Saab Trollhattan assembly plant.

Cash-short carmaker Saab has lined up a new white knight, it claims, a week after an earlier deal with China’s Hawtai Automotive Group unexpectedly collapsed.

The new deal pairs Saab with Pang Da Automobile, a major Chinese dealership chain, and could be worth more than $150 million to the Swedish maker, which has been struggling to reopen its headquarters assembly plant.  That factory was idled on March 29 when key suppliers began a boycott demanding Saab cover unpaid bills.

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As part of the new partnership Pang Da will take a 24% stake in Saab – compared to the 29.9% equity holdings Hawtai had negotiated.  Pang Da will pay about $100 million for its stake, then another $45 million for vehicles that will be sold through its network of 1,100 dealerships across China.  It has also agreed to another $23 million purchase of Saab products within 30 days.

For the Swedish maker, the deal, “will secure Saab automobile’s medium term funding,” said Spyker Cars, Saab’s parent company, in a statement.


First Drive: 2012 Saab 9-4X

The Swedes deliver their first crossover.

by on May.13, 2011

The new 9-4X should be reaching U.S. dealers this month.

Sometimes current events have a way of creeping into even the most routine aspects of daily life.  The run-up in fuel prices forces us to rethink every journey we take, even if it’s just a mundane run of weekend errands.

For Saab, the national demand for more fuel-economical vehicles should be good news as it replaces its old 9-7X sport-utility vehicle with the more modern, efficient and, frankly, much more fun-to-drive 9-4X.  Unfortunately, even here the headlines might creep into the buying decision for many potential customers.

The Swedish automaker experienced something of an unexpected miracle, in early 2010, when the Dutch-based Spyker Cars acquired the brand from General Motors, which seemed intent on shutting Saab down. The long-struggling marque seemed to be on the mend, this year launching more products – including the 2012 Saab 9-4X – then at any time in its history.

Unfortunately, a cash crunch has disrupted production of some Saab models – though not the new crossover.  Saab seemed to have dodged the bullet and lined up yet another white knight when it agreed to sell a chunk of the company to the Chinese automaker, Hawtai.  But as we were ready to post this review that deal appeared to be coming undone.

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Even if Saab can put Humpty Dumpty back together – and there’s no question the maker’s Chairman Victor Muller is a remarkably resourceful entrepreneur – it’s possible the recent uncertainty will convince at least some potential buyers to steer clear of Saab showrooms.  It’s hard to argue against such concerns.  Even the most inexpensive automobile is a major purchase, and at $50,000 or so for the Aero edition, $40,000 for the base, once you pay for freight, taxes and the typical adds-ons, the 2012 Saab 9-4X isn’t cheap.

That said, anyone looking for a roomy, comfortable and well-appointed SUV who doesn’t at least take a look at the new Swedish offering is making a mistake.  All the drama aside, the new 9-4X is a worthwhile and compelling product.


Saab Snatches Subaru’s Colbeck as New U.S. CEO

Sign that things are getting back to normal?

by on May.09, 2011

New Saab Cars North America CEO Tim Colbeck.

Saab Cars North America has wooed Tim Colbeck away from his job as the top sales executive at Subaru’s as Saab’s top executive in North America.

Colbeck will report directly to Saab Automobile AB vice president and head of global sales & aftersales, Matthias Seidl and the Saab Cars North America Board of Directors.  Seidl had been serving as interim chief executive since January, when the Swedish maker ousted former Saab North American boss Mike Colleran.

Colbeck joins SCNA with 25 years of automobile industry experience in the United States with Subaru of America.   But his hiring could bring more than just an experienced hand to Saab.  The Swedish company has been struggling to get its house in order since it was acquired by the Dutch Spyker Cars, in early 2010.  But financial problems forced a month-long closure of Saab’s headquarters’ assembly plant, a crisis only resolved by its tie-up, earlier this month, with Chinese automaker Hawtai. (Chinese deal saves cash-starved Saab. Click Here for that story.)

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Colbeck has an enviable track record as Subaru’s senior vice president sales.   Under his direction, the Japanese maker achieved record sales and market share in the last two years and was the only brand to achieve sales increases in each of the last three years.

“Tim’s impressive accomplishments during his automotive career in rebuilding the Subaru brand are invaluable to the Saab team and represent his ability to further Saab’s vision for success,” Seidl said.


Saab Shutdown Drags On, Threaten Brand’s Survival

Suppliers claim Swedish maker owes millions.

by on Apr.08, 2011

The Saab 9-5 Aero at the maker's plant in Trollhattan, which has been idled by suppliers demanding payment.

The shutdown of Saab’s main assembly plant, at its Trollhattan, Sweden headquarters, could drag on for some time as the maker struggles to raise additional cash to help cover what parts suppliers claim are millions of dollars in unpaid bills.

The maker’s parent, Dutch-based Spyker Cars, nonetheless insists that Saab is not nearing a collapse.  The maker only emerged for near-insolvency a year ago, after Spyker purchased the failing brand and its assets from General Motors.

A spokesperson for the automaker, based several hours from capital city Stockholm, said Saab officials are “working hard” to find a solution, but also warned “could” stretch on for several days.

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Following the Geneva Motor Show, in March, Saab Chairman Victor Muller stated the company still has about $200 million of the money left from a 2010 European Investment Bank loan.  But he also said Spyker would be seeking to raise additional capital as quickly as possible.

Saab was hit with a brief production halt last week when suppliers temporarily halted deliveries.  Saab appeared to have addressed that problem, but the confrontation resumed this week, and the latest production halt is now in its fourth day.