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PsiCop

November 25, 2009 10:48 AM

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Strange. Saab is not just an auto maker, they also make aircraft, including fighter jets (IIRC). I'm surprised GM hasn't made any effort to unload this part of the business, if not the whole Saab subsidiary. Surely there would be interested buyers, both in the US and abroad.

It's also curious that all of GM's pending subsidiary sales have failed. It's not likely to be a coincidence. Is it because GM has an inflated notion of their value? Or have they purposely sabotaged negotiations because they just don't want to divest? Has this been investigated?

7 replies

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H3ion

November 25, 2009 11:33 PM

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According to press reports, there was no disagreement on price and terms for the sale. The Swedish company that was going to buy the Saab assets couldn't get financing.

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ARP

November 25, 2009 11:35 AM

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Well, from what I know about GM's relationship with its suppliers, my guess is that yes, they were typically GM and tried to act like they're still the 500 lb Gorilla that can push everyone around. Th govenment has a minority ownership in the company, so they can't do much to help push the sale. This is actually a situation where a little bit of socialism would be a good thing- if the government can get GM to pull their heads out of ther as*es and do a reasonable deal. The other option is shutdown and I'm guess you don't make nearly as much doing that.

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November 25, 2009 1:33 PM

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but i thought a key part of the initial bonding (& subsequent addition to those bonds) by the US & canadian governments required GM to divest certain brands - did it not?

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Pibbs

November 25, 2009 11:27 AM

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GM does not own the Aircraft portion of Saab. Only the Automotive division was sold to GM in 1990 (51%) and 2000 (the remaining 49%).

http://en.wikipedia.org/wiki/Saab

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November 25, 2009 10:57 AM

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you find that curious as well? i'm thinking, like the saturn deal with penske, the terms of the contract are just too much for the other party to swallow. i'm actually a little surprised uncle sam hasn't been a little more forceful in requiring GM to soften their position - these divestments were a key provision in their bailout.

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pecan 3.14159265

November 25, 2009 10:54 AM

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GM sold Hummer though, right?

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PsiCop

November 25, 2009 12:11 PM

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The Hummer \"brand\" was sold to a Chinese company IIRC ... after the Hummer line was completely shut down. I'm not sure the Hummer factories, infrastructure, inventories, or anything else was sold. AFAIK, it was a sale of \"intellectual property\" only ... i.e. the rights to the Hummer trademarks, perhaps the vehicle designs, etc. but nothing else.

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pecan 3.14159265

November 25, 2009 10:52 AM

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Has Saab been unprofitable for GM because of GM's uber-emphasis on trucks and massive SUVs, while ignoring the fact that Saab was probably a decent competitor for Volkswagen and Volvo, if only they had invested time and energy into it?

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November 26, 2009 12:27 AM

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GM, at least in the last few years, pretty much tried to do to Saab what they've done to every other division - expand their lineup by taking something they already make, slap a different grill on it, and try to convince people to buy it. There was the Saab 9-7 SUV (a Chevy Trailblazer) and the Saab 9-2X (a Subaru WRX wagon, aka the \"Saabaru\"). The problem is that neither worked, because Saab loyalists knew they weren't Saabs, and non-Saabheads weren't going to pay extra for a badge-engineered Chevy.

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November 25, 2009 1:51 PM

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ditto what ARP posted - i don't think GM acquired saab to invest in it & make it a premier brand. instead, they were most likely looking for specific technology & to capitalize on a loyal customer base. that worked - for a little while, but even fiercely loyal saab fans have strayed away from the brand lately.

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November 25, 2009 12:50 PM

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Seems like a lot of brands that GM created or acquired have failed. A great indictment of failed corporate leadership.

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ARP

November 25, 2009 11:46 AM

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I think that's a fair assessment. GM could never figure out the right balance of efficiencies/control of their \"boutique\" brands like Saab and Saturn. I mean, when the government says they're horribly mismanaged, then you know something's wrong. In Saab's case, they put no money into improvments, reduced their quality, and kept the high price tag. They became less and less of a competitor to Volkswagen and Volvo, and by the early 2000's, I don't think they were on the same level anymore. It's no wonder their sale have been slowly declining over the years. The funny thing is that Saab owners are like Mac owners- they're fiercely loyal to the brand, but even they had a breaking point.

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jtfink

November 25, 2009 10:52 AM

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Saab Aerotech is a separate company from Saab Automotive. GM purchased the automotive branch of Saab starting with an initial investment in 1990 and purchased the remainder around 2000.

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November 25, 2009 11:02 AM

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Maybe the Swedish government would be willing to throw in some money for a share of the company?

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November 25, 2009 11:15 AM

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I dont think its an issue with GM sabatoging it - I really just think Konigsegg but the numbers togeher and figured out that they could not make money with the unit. You could say that GM was overvaluing it - but business vaulation is extremley complicated and changes with the ecomony.

There is a glut of autombiles in the world right now , the only growth market is China and thats the only market GM is successful in. The deal probably limited SAAB exposure to this market.

the reality is that there are too many automobiles and not enough demand. The weaker companies are going to be gone or scaled down.

2 replies

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November 25, 2009 11:43 AM

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In terms of China and GM it's always been Buick, Cadillac, and Chevy that were big hits (and then there are the local d-bags with Hummers, but with some of the roads as they are that can be excused to some degree, I guess). Saab barely exists here (with that price point they're a niche brand here where people want their cars affordable and quality).

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ARP

November 25, 2009 11:52 AM

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I think that's true. But, Saab was never going to be a large brand like Toyota or Honda and I don't think they had any illusions of that. I think they wanted to operate in the European-based American car market and compete with Volvo, Volkswagen, and even take a swipe at the entry level Bimmer and Mercedes models. But, GM basically turned them into an ultra expensive Saturn.

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Pibbs

November 25, 2009 11:31 AM

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GM needs to seriously reconsider Saab as a brand. They have pushed pricing of the brand to a much higher level than most Saab-ophiles are willing to spend, and recently removed Leasing as an option, which cut sales dramatically.

That being said, they make an awesome, fuel efficient, sporty sedan. Both my wife and I own them (I have a 9-5, she has a 9-3) and love driving them. But I would never spend 33-40k on one. Off lease, low mileage at $15k? Absolutely.

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ARP

November 25, 2009 12:01 PM

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I think you're like many other Saab fans (myself included). We love the idea/potential of Saab, rather than the reality of Saab. Saab has been reducing its quality and keeping its sky-high price tag for a number of years. Now that you can buy a better car (in almost every sense of it) from the Japanese (Accord or Camry). Granted, it won't have that \"quirky\" factor that makes people like Saabs. But Saab is that washed up pop star that still thinks she's the \"it girl.\" So unless, someone puts some serious R&D back into Saab and has the patience for the long haul, its going to die as a brand.

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Bohemian

November 25, 2009 11:55 AM

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I really have to wonder if this is sabotage by GM or some other self inflicted idiocy. The same thing happened with Saturn. Penske (who makes SMART cars in the US) was ready to buy Saturn and had a logical system to make it work. Saturn also included the rights to the EV1, this would have been a big leverage point for Penske. They could have been THE company selling SMART cars and an updated version of the EV1. This makes me wonder if GM didn't want this sale to happen to protect their own interests in keeping decent fuel efficient and electric cars from coming to market.

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humphrmi

November 25, 2009 6:03 PM

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The Saturn / Penske deal wasn't good for either side. GM was going to sell Penske the Saturn brand, and then continue manufacturing the cars. The only difference was that Penske would have been an 'uber-dealer' that sold all the Saturns. But the problems were: for GM, it meant continuing to potentially lose money on every Saturn that they made for Penske, no different than when they were making and selling them themselves. For Penske, the problem was that the GM manufacturing deal would only last for a few years, and he had to almost immediately start ramping up production of Saturns from another manufacturer. He had trouble finding one, so the deal fell through.

As far as smart, Penske doesn't make them, or own them, he's just the U.S. dealer for them. smart cars are made by Daimler AG in France.

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Trai_Dep

November 25, 2009 12:25 PM

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I agree.
It also could be an emotional element. GM execs didn't want to sell one of their badges that they couldn't make successful, only to watch from the sidelines as someone else takes it from the 20-yard line and executes a stunning, crowd-rousing goal.
Either way, typical Big Three short-sightedness for the industry at large.

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November 25, 2009 12:42 PM

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GM needs to keep making trucks and hand Saab off to someone who knows what they're doing.

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November 26, 2009 10:07 AM

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Mm-hmm, though that may mean we'll be seeing yet another brand name be handed over to a Chinese automaker. First SAIC taking over some British car maker, then Geely seems to be set to take over Volvo, maybe Saab will fall under Chinese ownership too?

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ARP

November 25, 2009 1:58 PM

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They tried that, but the deal fell through. Their only other option is to sell the parts of the company (which aren't worth as much) or simply shut it down. The debate going on here is that GM might be acting typically GM and demanding large amounts of money, foolish terms, etc. like they're the ones with the power (they're so used to being in that position, I don't know that they're even capable of acting any other way).

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November 25, 2009 1:56 PM

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That sucks considering my Saab is the best damn car I've ever owned. With almost 200,000 miles on it and still going strong, I was eventually planning on buying a new one when this one went.

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November 25, 2009 2:01 PM

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That sucks considering my Saab is the best damn car I've ever owned. With almost 200,000 miles on it and still going strong, I was eventually planning on buying a new one when this one went.

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Boberto

November 25, 2009 4:30 PM

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Penske is simply a network of dealers.
The real issue concerning divesture of Saturn, Opel and now Saab really centers around two issues:
1.) Engineering DNA
Consider that the Saturn Aura, Vauxhall Vectra and Chevrolet Malibu are all descendant of the Saab 9-3. The high ratings for safety and reliability for each of these cars derives from Saab engineering.
It's impossible for someone new to come in and divest itself from the very thing that powers it's fleet; GM. HIghly woven and intertwined.

2.) Competitive Issues
This was much more an issue with Opel than Saturn or Saab. Basically an auto parts maker and a Russian investment bank would have taken over Opel with some loan guarantees from the German government. If that deal had gone through, GM would have put itself in the position of giving away the bulk of its engineering expertise. And to a competitor, no less.
What GM has done now with the Opel deal, was to put the German government in the position of either offering the same deal to a restructured GM, or let it die with TENS of thousands of jobs across the European continent.

It's really sad though. I'm a very happy owner of a Saab 9-3 and it's really the best car I've ever owned.

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November 25, 2009 4:53 PM

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Shouldn't someone else take over GM? Anyone?

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sjvicker

November 25, 2009 6:42 PM

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The only logical buyer for SAAB is IKEA. Just imagine a car where you can do every repair with an Allen wrench.

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November 26, 2009 12:32 AM

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But you would have to put the car together yourself, and there would be one part missing.

On the plus side, you could eat Swedish meatballs and lingonberry sauce while they write up the sales contract.

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thedarkerside.to

November 25, 2009 9:28 PM

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The failure of Saturn didn't surprise me. it wasn't a company on their own per-se, rather a brand that was fed with designs from other parts of the GM Empire.

The failure of the Opel sale again didn't surprise me. Unless it was a truck, most of the development for midsized and small vehicles was done by Opel, including the drive train for the new Volt.

The Saab 9-3 is essentialy an Opel too, though they designed it to look like a Saab.

One news piece I read said that Koenigsegg couldn't get the financing for the deal, maybe, but I think it is more likely that they realized that there is no engineering talent left at Saab.

Both GM and Ford have made the same mistakes, they bought companies (e.g. Volvo / Saab) for their name recognition and then threw away all that made these brands actually good.

What's left of all of these vehicles now is essentially.... Well, nothing really.

Bummer really, I actually was looking for a nice Saab 900 (first generation) in the near future.

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johnbc5

November 25, 2009 10:19 PM

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That is too bad because Konigsegg would have been prefect for Saab. They would have put some zing back in the company. GM ruined Saab when they changed the cars in the 90's to look more like a Chevrolet than a Saab. Konigsegg makes the fastest production car in the world and some of the finest looking cars on the market today.

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H3ion

November 25, 2009 11:37 PM

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Kaiser, Frazer, Hudson, Nash, American Motors, Plymouth, Packard, Oldsmobile....and now Saab. We owned one pre-GM. It was interesting, not overly reliable, and difficult to find parts for outside the major metropolitan areas. I'm not really surprised to see it go. In this market, I would have been more surprised to see GM make a go of it when their European focus is likely to be Opel.

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November 26, 2009 12:33 AM

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On the not reliable - I remember a while ago blogger/writer James Lileks joked that his friend's Saab could beat the Ford Probe he drove at the time 2 out of 3 times, but luckily those 2 times it was in for repairs.

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jp7570-2

November 26, 2009 2:03 AM

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Saab has been unprofitable during its GM ownership because GM all but eliminated Saab's unique albeit quirky design. GM killed this brand slowly.

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Squeezer

November 26, 2009 10:10 PM

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you buy one, and then you saab...

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