SAAB WATCH 2011 : GM questions China deal

11/07/11 - The developing deal between Swedish Automobile and Chinese investors, a deal that would resurrect Saab from its current financial coffin, may be dead on arrival. According to an article on Reuters.com this morning, GM is considering killing the deal that would send Saab over to Chinese automotive companies Youngman and Pang Da. The deal, worth 100 euro million, has until November 15th to be accepted by a slew of invested parties. One of these is General Motors, who as the former owner of Saab, still holds some preferred shares in the Swedish company. The company has been reported as being indifferent to the state of Saab, but rather concerned with their own role in this changing of chairmen.

It was reported late Friday that GM would deny the option for Chinese investors to take control of Saab if it meant that it would affect their interest in China and beyond. The reason being, is that GM still provides several components and services to Saab Automobile and if the deal went through, the American auto manufacturer could be replaced by a Chinese counterpart. That would hurt GM where it matters to them most; their wallets. Anticipating this, GM has made it clear Friday, they would consider turning down the sale.

This morning, Kevin Wale, president and managing director for GM's China operation, reiterated GM's statement to Reuters in a phone interview. He was quoted as saying, "It doesn't make sense for us to support any change that might adversely affect us. We use global architectures and those global architectures are used in a number of products we make at SGM." SGM or Shanghai GM is GM's Chinese branch that the company has worked furiously to build up over the past few years.

While it makes fiscal sense to be worried about the deal, rejecting the sale could very much end Saab all together. In that case, GM would lose that aspect of their production either way. Still, this could be a tactic implemented by GM to strike a side deal with Pang Da and Youngman Lotus. By voicing their concerns publicly, GM may be greasing their wheels in a way that could get a contract in place between the Chinese investors and GM to continue their service to the Saab name.

This move is not that different than what Saab's current owner, Swedish Automobile had done two weeks prior to the deal. Feeling vulnerable by the Chinese insistence to buy out control of Saab, Swedish Automobile announced they would end the agreement between them and the Chinese. As we all know, that lasted for about three days, until Saab announced the deal would send Saab to China in exchanged for a fair price on the bankrupt manufacturer.

For now, GM is firm in their position. Whether this will stay as is, will be revealed no later than the 15th of the month, when the deadline to make the sale is set to expire. One thing is for sure, however. Saab's future is still up in the air.

Tyler Baker; OSM Writer

( Source - Reuters.com )

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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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Ford attempts to resurrect the 60′s, brings back Mustang

As we all know, there is nothing quite like the Ford Mustang.  It’s a fuel injected mechanized manifesto that stands testament to the history of America’s awesomeness.  When the world calls into question our swagger, we need only to point to the harnessed high end horsepower stallion developed by Ford Motors back in 1964.  The Mustang is the beast of the western automotive world and it is so because it has proven time and time again to uphold the justifiable gaudy nature of our American taste.  It’s stylized, it’s loud and above all, it’s fast.  Currently, the Ford Mustang is in it’s fifth generation redesign since the first model of the car back in 1964.  While she may look, sound and act different, she has continued to rein as the coveted sweetheart of good old fashion car crazy Americans.  Recognizing this, Ford Motors has recently announced they will be reproducing the original first generation model of the 1965 Mustang.  Well, sort of anyway.

According to an article in Yahoo Autos over the weekend, Ford has been working carefully to develop their retro sides.  Either that, or they want to bring modern society back into the 60′s.  In an attempt to reward their relationship with their loyal customers and fanatics, Ford has slapped an approval on a new stamping for the steel bodies of the first generation Ford Mustang and it will only cost $15,000.  This is great news for classic or muscle car lovers.  The even better part is that you’ll be able to put your own engine, interior and axels of your choice into it.  No, seriously, you have to put it together yourself.  Ford may be making the body of the classic car, but they’re leaving the rest up to the consumers.

While this news is both exciting and deflating at the same time, you should take comfort in the fact that not only is there enough reproduced parts for the first generation Mustang model, but it is that way because it is America’s most restored vehicle.  Finding the parts to build your life sized version of the scaled toy model of the life sized version of the 65′ Mustang is the easiest part of the process.  The esembly will be the tricky part, but Ford has a hunch, this news will infest the dreams and desires of every engine-specific fanboy of the beloved pony car series.

Since Ford has announced they will be developing a new Mustang generation for 2014 and that the concept of which will not be taken from the old ghosts of Mustangs past, it seems only fitting that they would put the original model back into the market.  Assumable, if someone were going to invest in a new model, it would run them upward of $23,000 at a base level.  For perhaps the same price, they could invest in a project that has them riding in a  sleek classic with the piston-pumping heart of an infant.  That may be something Ford hopes will drive in new sales.  The idea of another option for future Mustang owners.  Since they already have the 1967-1970 bodies available to the public, it appears as if they want to appeal to the nostalgia of their clientele.  Either way, the world rejoices.

Tyler Baker; OSM Writer

( Source : Yahoo! Autos )

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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 )

J & P Cycles founders to step down

It seems the end of an era is upon us.  J & P Cycles, the world’s largest motorcycle aftermarket and accessories sellers, has recently found themselves under new management for the first time in the companies 31 years.  Founder and President, John Parham, and his Vice President wife, Jill, announced this month that they would both be stepping down from the company saddle in exchange for the sweet sound of retirement.  This comes as a great loss to those in the motorcycle inner-circle, but all things, even those as good as the Parhams is bound to come to a close.

Since 1979, J & P Cycles has strived to thrive in the motorcycle aftermarket game; an industry that has constantly grown over the decades.  John and Jill Parham have been at the core of this industrial fruition since the 70′s.  Every year, J & P publishes their famed Harley Davidson Catalog, one of the largest mail order catalogs in the industry.  The Parham’s influence on all of the industry, not solely aftermarket, has been invaluable to the biker cause.  The best example of this would be the National Motorcycle Museum, which John had a hand in moving last year to a spacious facility in Anamosa, Iowa.  Home to over 300 history instilled vintage motorcycles, the museum will be the Parham’s retirement project in the coming years.  They have stated that they will focus on family as well as working to better the museum.

What does this mean for J &P Cycles?  John has revealed that he will stay on with J & P as a member of the Advisory Board of Directors.  Taking over the company mantle will be son, Zach Parham.  Zach will head up the company as the new Vice President and General Manager in the absence of his parents.  Having grown up alongside J & P, there should be no lull in the family values Zach Parham inherited from the previous company heads.  The company has assured consumers that they will continue to excel as a provider of all things motorcycle.  While the end of an era is present at J & P Cycles,  one can’t help but be appreciative of all the Parham family has done for the motorcycle world and all they will continue to contribute as we forge into the future.