11 November 2011 - 17:00
Saab now only days from disappearing?
Yet another catastrophic wobble in the Saab survival tightrope act. Following the agreement for Saab to be sold to two Chinese companies, GM has now chucked a spanner in the works. I think this is shockingly bad behaviour by GM.
The important fact is this: all current Saab models use GM-designed platforms. GM licences Saab to build them. But it has now said that it will revoke those licences if the sale to the Chinese happens. This would kill Saab, and GM knows it.
If the sale doesn’t go through by 15 November – this Tuesday - Saab’s current owners say they ‘will likely not be able to safeguard the continuity of Saab, which … may result in the bankruptcy of Saab’. That’s understated financial language. In real English, it’s means we’re standing right in the edge of a cliff.
GM, it seems, is spooked by the notion that Saab might be successful in China, and undermine its own Buick brand, which is huge over there. The 9-5 uses a very new GM platform that goes under pretty well any FWD car bigger than an Astra made by GM worldwide. GM doesn’t want that getting out of its control. I guess that’s fair enough.
But here’s why GM is acting in such bad faith. GM surely knew all along something like this might happen. When it sold Saab originally, Saab was already making steps towards China. It’s all very well that GM sold licences to an independent Swedish Saab to use its platform, but it must have known Saab couldn’t remain Swedish and independent for long. It would need money from somewhere else. Likely China.
If GM didn’t like that idea, it should have had the courage to kill Saab itself, rather than leave the blood on someone else’s hands.
Well, there’s another frantic round of negotiations now on ahead of the Tuesday deadline, trying to come up with a solution that would see GM happy. No-one’s blameless: Saab’s buyers and sellers lacked foresight too in their rush to do a deal. They should have predicted GM’s objection.
Meanwhile another actor has stepped into the drama: the Swedish Government. Sweden’s enterprise Minister said GM’s announcement is ‘regrettable’ and that the Swedish government was ‘acting as a door-opener in the contacts between Chinese authorities and GM.’
That's big of them. The Swedish Government has been fantastically unhelpful to Saab ever since its funding crisis started almost a year ago. It has turned down various foreign investors and chucked several administrative spokes in the wheels.
It’s might be too late now for it to make sympathetic noises.