SAAB WATCH 2011 : The Journey East

11/01/11 – Welcome to another update of One Stop Motors continued coverage on Saab Automotive’s developing story.  Ladies and gentlemen, it’s time for SAAB WATCH2011!  The East Coast is currently being blanketed in a snowy blizzard, but it appears as though on the Eastern Hemisphere, it’s raining money.  Reported today on Bloomberg.com, the Chinese investors who have arranged a deal to purchase the Saab brand from owner, Swedish Automobile NA, have gotten the blessing from Swedish courts to keep Saab protected from creditors.  This will allow them to restructure, redistribute and realign as they start to resemble an actual company for the first time in a long time.  Of course, this has everything to do with Chinese companies, Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automobile, who are set to invest $844 million (610 million euros) into the Swedish car manufacturer over the next several years.   This pledge, according to Bloomberg.com, has satisfied courts and coaxed them into extending the companies protection.

In an immediate move, Pang Da and Youngman will be providing a bridge loan of 50 million euros to keep the company afloat while it reorganizes.  Unfortunately, this is only the good news.  The bad news comes to 500 to-be-determined Saab employees who will lose their jobs over budget cuts.  Saab’s current Chairman, Victor Muller, was reported saying, “But we have a lot of work ahead to even get the investment approved, and Saab has suffered tremendous damage to its brand and supplier base that must be overcome.”  His optimistic words at least somewhat implies Muller may not be in that wave of 500 who lose their jobs.  Still one thing is certain, nothing is really certain.  Saab is stuck waiting on the investment from the Chinese to be approved by the appropriate channels.  Until then, there is still a looming potential for a breakdown in business.

The Chinese have also outlined a plan that would use their $844 million to make Saab profitable by 2014.  According to Bloomberg.com, Saab’s new plan hinges on their expectation to sell 35,000 to 55,000 cars next year.  By 2014, they expect to sell 130,000 to 150,000 cars.  This may be a gross overestimate seeing as Saab hasn’t sold over the 100,000 mark since 2007 (then owned by GM).  Last year they only sold 32,048 and the year before that, 20,905.  2011 wasn’t that great of a year either, with the assembly line shut downs and the bankruptcy spectacular.  Having damaged their relationship with everyone but the Chinese (which they almost ruined last week), it will be interesting to see how Saab fares in the next year or two.  Until then, they are alive; leaner and meaner, but alive.

Tyler Baker; OSM Writer

( Source : Bloomberg.com )

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SAAB WATCH 2011...The Saga Continues!

10/28/11 – In a stunning turn in the SAAB WATCH 2011 saga, Saab Automotive announced early Friday that the company would be sold for $142 million to Chinese industry investors Pang Da Automotive Trade Co. and Zhejiang Youngman Lotus Automotive Co. Ironically, these are the same parties that Swedish Automotives rejected handing over the Saab reigns to late last week. As reported in The Wall Street Journal, this week, they have not only agreed to give up controlling interest in the troubled 60-year company, but to sell off the entire brand in a 60/40 split (60% to Youngman and 40% to Pang Da). It is still unclear as to how much current Saab Chairman, Victor Muller, will be involved in the future of the Swedish automotive manufacturer, but one has to think any high ranking suit in the Saab infrastructural will be replaced by a Chinese counterpart.

Saab was on the final day before they could possibly lose their creditor protection (equivalent to declaring bankruptcy) and had already pulled the plug on their restructuring process due to lack of funds. It seemed bleak that they would bounce back after refusing the original July deal with Chinese investors for a reported $245 million in loans and funds in exchange for 54% stake in the company. The Chinese held out, weighing their options, something Saab ran out of as time elapsed. When Saab realized the Chinese funding was being re-evaluated and the Chinese wanted to take complete control, the board publicly killed the deal between them. They were afraid the Saab name would be lost if sold overseas. Now it appears that Saab has been so backed up into the corner that they had no other choice but to sell. The two Chinese companies will now invest a higher price than the $245 million the original deal was for according to Mr. Muller, but the $142 million will buy out the currently issued stock held by Saab investors.

According to WSJ, Swedish Automobile (then called Spyker Cars NV) purchased Saab from GM in February 2010 for a price tag of $74 million. It claimed Saab would turn a profit by 2012, but instead, in 2012 Saab will have it’s third owner in three years. While the deal is still subject to approval by a slew of parties including GM and Chinese authorities, this is still the most comforting news for Saab in seven months filled with litigation, speculation and legal actions. It also stands out for the Chinese Automotive industry, which has been aggressively shopping for Western manufacturers to expand their international reach. Unfortunately, they have had little success. Besides Volvo, which was bought by Zhejiang Geely Holding Group Co. from Ford Motors last year, Saab will only be the second purchase of a foreign manufacturer by a Chinese based auto maker.

A memorendum of understanding has been signed between the two Chinese investors and Swedish Automobile and will be valid until November 15 of this year. This, however, will need to go through Saab’s laundry list of creditors who must approve the purposed reorganization process. They meet on Monday of next week to discuss the takeover. Until then, Saab is still in the woods, but a the clearing seems to be just ahead. Check in again with One Stop Motors as we continue our coverage of SAAB WATCH 2011 and feel free to visit us at www.OneStopMotors.com.

Tyler Baker; OSM Writer

( Source : The Wall Street Journal )

Saab’s lingering landslide leaves company running idle.

If you’ve been keeping up with the developing news of Swedish car manufacturer, Saab Automotive, then you’re already aware that Saab is sitting on the edge of non-existence.  The company’s production line has been inactive since June and they were almost liquidated in July for failure to pay owed wages (which they scrambled to pay).  As they hold out for some glimmer of a monetary miracle, the question must be asked; does Saab stand a chance to survive?

Autoweek.com reported on the critical condition of Saab earlier this week.  According to the automotive news source, Saab is likely to be declared bankrupt by Swedish courts as soon as today.  The company has already won court protection from creditors recently, allowing them to remain alive until funds are found.  Where would these funds come from?  Saab has apparently been waiting for investment capital from two Chinese companies.  Pang Da, an import car distributor in China is in line to provide Saab with $239 million to dig the car company out of debt.  On top of that, another Chinese car based enterprise in Youngman Automotive Group is said to be supplying an additional $95.7 million in a deal Saab had made last month with the two organizations.  For a time, it seemed like Saab might grind it out and rebound from their financial woos, however now it seems more likely that they will die out like so many companies in the market today.

The reason Saab’s future is loosing light is due to reports in Europe that the Chinese government will deny Saab’s deal with Youngman and Pang Da.  As Autoweek.com explains, Saab is not giving up any intellectual property under the agreement and this appears to be a deal-breaker in the eyes of the Chinese government.  Whether this is speculation or fact, it might not matter all that much.  Simply put, Saab has been under a microscope in the last several months and their plan to resurrect themselves has been questioned by the Swedish government and the rest of the world.  They’ve already begun selling off assets as a way to cover as much overhead as they can until the new money deal kicks in.  

As optimistic as they may front to be, a business desperately scrapping up money and hindering on both courts and other companies for aid looks like a lost cause already.  Even if they do manage to get the funds, they’re production is only one-third of what it was in 2008.  Saab vehicles are simply are not selling around the world and with all the negative publicity they’ve been subjected to in the last two years, it’s hard to see an upside in their sales.  Still, businesses have survived worst.  Until a major break in their tear-some tale is had, Saab will continue to hang in economic purgatory.  For their three thousand plus employees, however, we can only hold our hopes for the best outcome.

Tyler Baker; OSM Writer.

 (Source : Autoweek.com )

2014 Ford Mustang won't go retro

It’s hard to believe it, but Ford’s “pony car” darling, the ever eviscerating Mustang, will turn 50 in 2014.  While it may be a few years premature to celebrate, Ford is already hard at work on re-designing the look of their performance pony for the half century milestone.  Currently on it’s fifth generation make-over, the Ford Mustang will once again be overhauled, re-engineered and given a new cosmetic body to sport Ford’s attitude of appreciation.  What the new Mustang wont be is retro.

Automotive News reported on the matter recently, revealing that Ford’s Design Chief, J Mays, admitted that the new generation of Mustangs will not have a keen homage in appearance to the Mustangs of the past.  The current fifth generation had gone back to a more classical look than it’s third and forth gen predecessors.    Those of us hoping that Ford would continue their pursuit of designing Mustangs with a mixture of noir sentimentality and futuristic infusion can use their hope on something else.  It simply is not happening.  ”The challenge or the opportunity for 2014 with a 50th-anniversary car is to not just look back over your shoulder, but to try to win all of the Mustang faithful yet bring the brand forward as well,” told Mays to Automotive News.  

What does this mean for the future of the Stang?  No one other than Mays and his faithful team know.  Mays has admitted that the plot and plans for the new Mustang generation is being kept under lock and key.  It could be almost two years before anyone other than Ford eyes up the new Mustang model (though that is a worst case scenario).  For now, consumers and car enthusiasts will have to play the waiting game.  If history has taught us anything in this particular case, it’s that change can be a dangerous thing.  When Ford revealed their second generation Mustang in 1974, the design spring-boarded off of the plunky Ford Pinto.  The third generation was originally outcast by consumers and harassed into being redesigned in 1987 (with the discarded version becoming the Ford Probe).

If Mays and his team are working on a concept based off another manufacturer's model or another of Ford’s models, this could mean a hiccup case of half sedan/half coup hybrid for the future Mustang or worst, it could come out looking like a PT Cruiser (again, worst case scenario).  For those looking for new places to place their hopes at, why not invest it in hoping the new Mustang will play more off the first and fifth generation; where the Mustang is still a sleek, steel skeletoned stead with finesse and rugged good looks.