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  • GM behaved destructively

    The reports from the bankruptcy administrators for Saab served only to reiterate all the problems that our beloved Swedish brand suffered in its final years: poor liquidity, low sales, profit margins being squeezed by General Motors, etc.

    New revelations to Swedish newspaper TTELA by Saab's CEO Jan Åke Jonsson show just how dramatic the developments behind the curtains really were.

    As reported on the German website Saabblog.net:

    Already in 2010, the former CEO Saab, Saab had increased liabilities to GM to 3.7 billion krona, and again in February 2011 to 220 million krona were added to the debt. On 10 February Jonsson visited with his CFO Rob Schuyt Detroit hoping to find a solution to the difficult situation. Already in the previous months, GM had proved generous in terms of payment, and the Saab delegation hoped for funds from the reserves for the new car warranties in the U.S. market.

    On 24 February, one day after the Independence Day celebrations in Trollhättan, Saab was the subject of an internal meeting at GM. Probably was at this meeting Jonsson decided to stop all deliveries and all development agreements with Saab until full payment of outstanding debts. For the future, the deliveries are only in advance.

    The Saab management was caught by surprise four days later by the news from Detroit. Hopes for an amicable solution became bruised. On 1 March GM stopped the European operations, including Opel in Kaiserslautern, supplying parts to Sweden. The next day in Trollhättan was held an emergency meeting, and it was possible the Saab management to achieve a solution with GM. All future deliveries should be paid immediately in cash, the outstanding debts are frozen until late May.

    Saab CFO Rob Schuyt and management agreed secrecy, but the situation at the plant at the Stallbacka had spread even among the other suppliers. The purchasing department at Saab received critical questions from the supplier warehouse.

    The immediate threat of GM seemed spellbound, but at a meeting on 30 April was also found on the GM debt claims of other suppliers in the amount of 350 million krona. Meanwhile, the situation had become more difficult, until the end of April 100 new vehicles were still not produced due to lack of parts, and logistics services provider Schenker began to hold back components on the basis of unpaid invoices.

    On 5 April there were already 400 new Saab, which due to lack of materials that could not be completed, and the Saab management decided to stop the production to solve the financial problems. The result is known. The production was stopped, the sales came to a standstill. At the same fading away of the current permanent supplier invoices, and continue ongoing fixed costs ate up the last agent.

    The Saab management had desperate hopes for Antonov and the EIB. In vain, as we know today. On 19 May owed 2000 Saab suppliers an amount of 1.38 billion krona, without the requirements of GM. Production started shortly on 26 May but for lack of components was repeatedly interrupted. On 9 June remained the the factory at Saab stopped. Forever.

    Jonsson has long been one of GM's managers, and those who know him describe the Swede as assertive and very realistic. The resignation of Jonsson thus appears in a new light. The problems with GM, the key suppliers of Sweden, made the battle for Saab to a lost battle. An undertaking of this magnitude without the lead instrument of financing the suppliers is impossible. Good producers as Europe's largest car producer to pay after 30 days and another after 45 or 90 days, cash or immediately is impossible.

    GM has behaved destructively, so says Jonsson, and he may be right. Generous payments would not alone prevent the disaster. Saab would have needed a strong industrial partner with a lot of patience. Then maybe the long-awaited Saab 9-5 Sport Combi would have gone into production and the sales would have improved.

    The problem, however, had its roots in the Agreements, which among other Jonsson had negotiated with GM. Because GM did not at any time call Saab a dependent company. GM wanted to save on the costs of the closure of the factory and the severance of long-term employees. As such you will have already seen that a tray of champagne was ordered in Detroit in February 2011. Operation successful, patient dead.
    Comments 1 Comment
    1. nordwulf's Avatar
      nordwulf -
      I imagine JAJ could fill a series of books about all the behind-the-scenes dealings with GM. Must have been a challenging and frustrating job.
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