Saab news – PDRC approval and events timeline

September 13, 2011 15:07 Line

By: Swade

Comments (36)

Some news from inside Saab that I thought you’d be interested in seeing. The process so far and the processes to come.

Important bit of good news first…..

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Important milestone achieved in China process

Today, the PDRC, the provincial equivalent of the National Development and Reform
Commission (NDRC) approved the deal between Saab, Pang Da and Youngman. The decision is an important step in the process of getting NDRC’s approval.

There are three levels of this authority:

  • DRC – the local authority, which has already given its approval
  • PDRC – the provincial authority, which thus gave its approval today
  • NDRC – the National Authority

We have passed two of the three levels, and will now proceed to the NDRC.

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A summary of the events of recent days

  • Wednesday, September 7th Saab Automobile applied for voluntary reorganization in Vänersborg.
  • The scope of the application included Saab Automobile AB, Saab Automobile Powertrain AB and Saab Automobile Tools AB. Other units, including Saab Parts and foreign subsidiaries (including Saab Great Britian and Saab Cars North America), were excluded.
  • Thursday, September 8 it was announced in Vänersborg that the court rejected the Saab reorganisation application.
  • The same day, Saab announced its intention to appeal this decision, because it disagreed with how the court interprets the law and its application.
  • The appeal was submitted to the District Court on Monday 12 September.
  • The new documentation, among other things, included a number of improvements implemented since the first reconstruction in 2009
  • Letters from Pang Da and Youngman were included, thatclarify their commitment to Saab, and also to state that they have no reason to believe that the approval process with the Chinese authorities would not be completed or that there will be unexpected delays.
  • As part of the reorganisation application, Saab also added information about a new contract that guarantees a so-called “bridge loan” of 70 million euros, roughly equivalent to 622 million SEK.
  • Monday 12 September, two Unions filed for bankruptcy for Saab.
  • According to information, it may take at least a few weeks for the court to consider this petition, which is a separate process from Saab’s reorganisation application, which is to be decided immediately.
  • Both the leaders of the Unions have signaled that they contribute to the stay of bankruptcy if the Court of Appeal will take time to deal with reorganisation application.

What happens next?

  • District Court will now send the appeal to the Court of Appeal. It is the district court’s duty to do so promptly. They have chosen to do so by postal mail, which means that the appeal will reach the Court of Appeal on Wednesday 14 September.
  • The Court of Appeal first has to permit an appeal, that is, decide whether to reconsider the matter. It is the first time they have to consider a case of this kind and it is difficult to estimate how long it will take. It is estimated that it will take between one and a couple of days. After a decision to permit the appeal, it should be dealt with immediately in accordance with the law.
  • It is in any case, likely that Saab’s appeal to the Court of Appeal will be dealt with more quickly than the unions’ petition to the district court.

I’ve written more about this subject, below.

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Timing of the reorganisation appeal

September 13, 2011 14:28 Line

By: Swade

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I hate to sound like a broken record, but I’m going to have to wheel out the mantra we used back when Saab was being sold in 2009/10.

Please observe the non-official spokesmodel to the right (original vendor here and thanks to Hugh for the reminder).

We know that some Saab-related stories seem to cause an almost hysterical reaction here in Sweden, but sometimes it really can be an over-reaction. Take yesterday’s stories about the timing of the bankruptcy filing, for example. It’s a piece of minutiae that gave papers something to report on, but it should have been little more than a minor note.

Here’s how it broke down.

Unions filed their bankruptcy request yesterday. Saab also filed their appeal yesterday, but we filed a little after the 1530 deadline to get it from Vanersborg to Gothenburg on the same day (the 1530 deadline became a story during the day). Swedish news services are now running a “which filing will win the race” theme, which is basically a non-story.

Saab’s appeal filing is expected to be resolved within days. The court first has to agree to hear the appeal. Assuming that happens, the law regarding reorganisation states that a resolution should be forthcoming immediately, which we can loosely expect to mean “as soon as possible”.

We have provided more detailed information that has to be considered, so it may take a little longer to read, but that detailed information should allow for a quicker and more clear-cut decision, too. Bottom line: it is reasonable to expect a resolution of our appeal within days of it being received (technically, it will be received tomorrow).

If left to run its course, the unions’ bankruptcy filing is expected to be resolved in several weeks from now.

Effectively, there is no race. If Saab’s appeal succeeds then wages should be paid under the government scheme and the unions would withdraw their action. If Saab’s appeal fails, then we’re up a very smelly waterway without adequate means of transportation – and plan D kicks in.

So, if you’re a Saab fan and you hear slightly high-pitched reports in the media, don’t panic. If someone you know starts talking about this supposed legal ‘race’, please direct them to the lady pictured above. Or just send them here.

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Press Release: Saab Automobile Lodges Appeal Against District Court Ruling

September 12, 2011 17:02 Line

By: Swade

Comments (11)

Trollhättan, Sweden: Swedish Automobile N.V. (Swan) announces that Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB (collectively Saab Automobile) today lodged their appeal against the District Court’s decision last week to reject Saab Automobile’s proposal for voluntary reorganization. The appeal will be heard by the Court of Appeal in Gothenburg, Sweden.

Saab Automobile is of the opinion that by rejecting the voluntary reorganization proposal based on the reasons cited in the rejection statement, the District Court went considerably further in its consideration than what the legislator intended. Saab Automobile is of the opinion that the District Court has left out of consideration that the District Court’s assignment is to avoid pure abuse of the Swedish Company Reorganization Act approval of a reorganization request shall be based on the provision of a limited amount of documentation. Thus, Saab Automobile is of the opinion that in its ruling, the District Court has applied a much stricter standard of proof than is required under the Act.

The documentation for appeal contains, among other things, a number of improvements Saab Automobile has implemented since the last reorganization. This includes a patent application for Saab Automobile-developed extended range propulsion technology (EREV) that would considerably reduce fuel consumption in next-generation Saab vehicles, as well as the Saab Automobile-developed modular vehicle architecture.

In the meantime, Swan and Saab Automobile continue discussions with several parties about obtaining additional funding for the short term. Pang Da and Youngman continue working on obtaining approval from the National Development and Reform Commission (NDRC) for their equity investments worth EUR 245 million in Saab Automobile and have no reason to believe that the approval process will not be completed, nor that there will be unexpected delays. The approval process is expected to be finalized early November. Youngman and Pang Da intend after the initial equity contribution to contribute with additional capital.

The EUR 70 million commitment of Youngman and the technology license agreement between Saab Automobile and a special purpose vehicle, as communicated in the press release of this morning, are part of a bridge financing transaction. This bridge financing transaction and receipt of funds by Saab Automobile are still subject to finalization of definitive transaction documentation with the lender that will provide the bridge loan. Saab Automobile expects to finalize this process by September 26. Furthermore, international banks have shown interest in taking over Saab Automobile’s existing loans in order to add further liquidity to the company.

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The start of another rollercoaster week at Saab Automobile

September 12, 2011 15:22 Line

By: Swade

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Want an idea of what it’s like working at Saab Automobile right now?

  • Last week we had a failed application for reorganisation of the company. Downer.
  • Late in the week, we galvanised and employees heard that the executive team would spend the weekend preparing an appeal. Steady.
  • This morning we announced a licensing and bridge finance deal. Upper.
  • And then this afternoon comes news that two of our employee unions have filed for bankruptcy. Downer.

That’s the rollercoaster we’re on at the moment. They say a week is a long time in politics. A single day can be a long time at Saab. If you’re along for the ride – and I know there are a lot of people along for the ride with us – here’s the Swade guide to reading what’s going on in a few key areas right now.

Reorganisation

Our appeal with the Swedish courts has been lodged in Vanersborg and will be on its way from there to Gothenburg this afternoon. We have taken steps to beef up the initial application and some of those steps are now public knowledge.

We’ve provided some more insight into ‘the China process’, for example, which should hopefully give people a better ideas as to why we have a lot of confidence in our arrangements in China.

We’ve also signed an agreement this morning that will provide bridge financing through licensing (not all-out selling) of our Phoenix platform technology.

The rejection of our initial application for reorganisation last week was certainly a surprise and a blow for Saab. However, as Victor Muller pointed out last week, our executive team were ‘throwing the kitchen sink’ into our appeal to ensure that any lack of information noted in the judgement would be addressed.

Bankruptcy filing

As I write this, news stories are beginning to circulate about the fact that two of our employee unions are filing for bankruptcy today. Here’s the BBC article.

These are unfortunate headlines, however when reading them one should bear the timeline for these competing processes in mind. The unions need to act on behalf of their members, so a filing like this is not a complete surprise. However, should Saab’s appeal be a successful one and we are granted reorganisation, the bankruptcy filing would effectively be rendered moot.

We expect a response to our appeal some time later this week, whereas it’s my understanding that the bankruptcy filing would take several weeks to get a verdict. The unions know this, too, but they have an interest in acting for their members and securing payments as early as possible if the worst happens, which is a fair thing to do.

The future?

Can we predict it with any certainty? Of course not. This is has been a story with more twists than Chubby Checker.

BUT…..

  • We have strong partners on our side and their applications for approvals in China are progressing well. Today’s bridge finance agreement could be taken as a sign of the faith that Youngman place in the future of this company, and the things that they, we and Pang Da believe we can do together.
  • We have a strong portfolio of Saab vehicles. That’s the reason we’re here in the first place – and it’s only getting better.

If you haven’t read it yet, I recommend you read my series from last weekend, entitled In Saab’s Corner. It takes you through some of the things we’ve got going on right now and I think you’ll find it to be encouraging reading.

Our self-belief and determination isn’t a measure of cockiness. We couldn’t be more humbled than what we are right now and we know that we have a lot of business to take care of when everything gets rolling.

Rather, our self-belief and determination are a measure of the faith we have in the preparations that we’ve made, and in the plans that we have for the future. We can do this. We can get this done. We just want the chance to do so.

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Press Release: Saab Automobile Confirms Bankruptcy Filing By Swedish Unions

September 12, 2011 15:19 Line

By: Swade

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Trollhättan, Sweden: Swedish Automobile N.V. (Swan) and Saab Automobile AB (Saab Automobile) confirm that Swedish unions Unionen and Ledarna filed for bankruptcy of Saab Automobile. The court has received the filing, but has not yet rendered a judgment which could take a few weeks.

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Press Release: SAAB AUTOMOBILE SIGNS EUR 70 MILLION TECHNOLOGY LICENSE AGREEMENT

September 12, 2011 11:13 Line

By: Swade

Comments (14)

Zeewolde, The Netherlands, 12 September 2011 – Swedish Automobile N.V. (Swan) announces that Saab Automobile AB (Saab Automobile) signed a technology license agreement with a special purpose vehicle named Swedish Automobile coöperatief U.A. (SPV). The license agreement relates to the non-exclusive rights in Saab Automobile’s Phoenix architecture technology for a consideration of EUR 70 million.

As part of the transaction, Youngman has also signed a technology license transfer agreement with the SPV on purchasing the license and providing a guarantee for its payment of the license. This commitment of Youngman and the technology license agreement between Saab Automobile and the SPV are part of a bridge financing transaction. This bridge financing transaction and receipt of funds by Saab Automobile are still subject to finalization of definitive transaction documentation with the lender that will provide the bridge loan.

It is the intention to repay the bridge loan with the proceeds of the EUR 245 million equity investment of Pang Da and Youngman, which is still subject to approval of the relevant authorities.

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In Saab’s Corner – Overview.

September 10, 2011 8:42 Line

By: Swade

Comments (27)

Below you’ll find a five-part series of articles called ‘In Saab’s Corner’.

Right now there is a lot of talk going on about the financial side of this company. We’ve been beaten from pillar to post in certain markets and whilst some of that is warranted – we don’t shy away from our current problems – much of it not and it loses sight of why this company exists in the first place. We are distressed at the moment and we are trying to take measures to protect ourselves for the future. As the rest of the world speculates as to what might happen and the reasons why, I wanted to draw attention back to what this company is all about.

Saab is a company full of exceptional people who design and build cars based on a certain DNA and set of brand pillars. We do things the way we do them for a reason and we believe in the philosophy behind this company.

This is the overview. The following five articles are intended to draw your attention our products and technologies, our people, our brand, and our future with investors from China and what those investments will mean for Saab.

As I write this, Saab’s future is very much at stake. Decisions could be taken next week that deny this company a future that is so close that you can almost literally reach out and touch it.

A great deal has been written about various particular aspects of our business and actions. I hope this series can help people focus on what it is we actually do and what we are very confident about being able to do in the very near future.

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In Saab’s Corner – Our vehicles

September 10, 2011 8:42 Line

By: Swade

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In the car industry, it all comes down to product. The cars you’re offering to your customers.

We currently have the biggest range of Saab vehicles we’ve ever had – and that range is getting better every year.

Since being sold from General Motors, we have built and released the all-new Saab 9-5 Sedan. We’ve improved the Saab 9-3 with a range of low-emissions diesels and then with the introduction of the Griffin range of vehicles with the new 2.0T direct injection engine as well as other enhancements. Production and sales of the Saab 9-4x have commenced and as soon as production re-starts in Trollhattan, we will begin to build the new Saab 9-5 SportCombi.

That’s a pretty decent list of product-related achievements for a small car company that was in liquidation only 20 months ago. And still to come is the replacement for the Saab 9-3, our first vehicle developed in full since the separation from General Motors.

Saab 9-3 Griffin

The Saab 9-3 Griffin range involves more than just a subtle makeover. It’s without doubt the best Saab 9-3 offering that Saab have ever put on the market and a fitting way to farewell what has been our biggest selling model since its introduction.

If you’ve driven the 2.0T Saab 9-5, then imagine that engine in an even lighter and smaller car. Mouthwatering. The Saab 9-3 Griffin range brings the following changes/enhancements:

  • ‘ice block’ headlamp effect a-la the Saab 9-5
  • new front grille with Saab wordmark a-la the Saab 9-5
  • Re-profiled front bumpers with trapezoidal air intake
  • Front fog lamps as standard equipment
  • New rear badging and Sport Sedan all variants receive a trunk-mounted spoiler
  • New wheel designs available.
  • New interior materials and patterns
  • Low emissions diesel engines (130, 160 and 180hp) available emitting just 119g/km CO2 for both Sport Sedan and SportCombi
  • New 2.0T petrol/biopower engine with extra power and torque, but lower emissions and consumption. Same engine as new Saab 9-5, with direct injection, twin scroll turbo and variable valve timing.
  • 163hp petrol engine also available.
  • XWD and FWD available with both petrol engines in appropriate markets.

The Saab 9-3 Griffin range is available as Sport Sedan, SportCombi, 9-3x and Convertible.

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Saab 9-5

Launched in 2010, the new Saab 9-5 was a much anticipated vehicle. It’s design is clean and beautiful from every angle. Accommodation is generous, as is the equipment list.

The Saab 9-5 comes with a choice of two petrol engines in most markets (three in some). The 2.0T is wonderfully flexible and delivers excellent economy for a car capable of delivering such a great combination of performance and handling. The V6 Aero is a powerful, well equipped flagship that will eat up the road for hours at a time, turning a long distance trip into a walk in the park. In the corners, you won’t believe that a 5-meter long car can handle so ‘small’ (my tip is to go for the 2.0T, which is lighter and dances like a ballerina – amazing).

Two diesel engines are offered, with a frugal, low emissions single-turbo delivering 160hp and a mere 139g/km CO2. The twin-turbo has 190hp and is available with XWD – the first time diesel and XWD have been offered together on a Saab.

The equipment available on the 9-5 is impressive. Head-up display, altimeter speedo, advanced parking assist, jukebox music storage with audio device connectivity, rear seat DVD and climate control, U-rail trunk storage, Bi-Xenon smartbeam lighting, HiPer Strut suspension, Drivesense chassis control, XWD – the list is endless.

So many new cars are lifeless, personality-free appliances that it’s a real treat for someone like me (and maybe someone like you, too) to find one with a pulse.

The new Saab 9-5 Sport Sedan will be joined soon by the popular Saab 9-5 SportCombi. It’ll feature the same mechanical package as the sedan and looks fantastic in wagon form. This is our most popular body style for the European market so the launch of the vehicle is extremely important for us. And with so many manufacturers discontinuing their wagons in the US market, it will be an important addition for us there, too.

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Saab 9-4x

Our first ever crossover vehicle. The 9-4x vehicle development was led by Peter Dörrich, a Saab guy from right here in Trollhattan – and this one is a Saab from the ground up.

The 9-4x has received wonderful reviews from its initial year on the market. The car looks absolutely sensational (definitely the smartest in its class) and it’s car-like handling makes it a joy to drive for such a generously proportioned vehicle. And then there’s the generous equipment levels, with the Aero version of the 9-4x having only three items on the options list – every thing else being standard.

From my own Saab 9-4x review earlier this year:

I was really excited to finally get some seat time in a Saab 9-4x Aero and the experience exceeded my expectations. It’s perfectly proportioned, the interior is great, the seats are fantastic, it’s very well equipped, the power was brilliant, and it is without doubt the best looking crossover vehicle in its class. The drive is crisp, the car is very responsive and of course, the Saab 9-4x has stuck with the Saab tradition of safety in scoring a Top Safety Pick award from the IIHS.

And if you don’t believe me, then a reader just like yourself might be more convincing:

The first thing I talk about when describing my first impression is that the 9-4X feels and drives smaller than you might think. When I set the mirrors to eliminate blind spots, I feel comfortable on multi-lane highways. On the narrow twisty road near my dealer, I was wondering how that would feel and the answer is great! I didn’t feel too conscious that it was too wide to stay in my lane and it felt great cornering.

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Coming soon – a new Saab 9-3

Can’t say too much about this one. But an all-new Saab 9-3 is coming, design led by Jason Castriota, technology led by a driven team of Saab engineers who are dying to prove to the world what this little company in Sweden can do.

You’ve heard a little about the new engine. You’ve heard about IQon. You’ve heard about the new hybrid driveline system from e-AAM.

There’ll be so much more, and a design package that will take all the best elements of Saab’s design ethos and bring it back home.

Watch this space.

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In Saab’s Corner – our deals with Pang Da and Youngman

September 10, 2011 8:41 Line

By: Swade

Comments (5)

On July 4th, Saab signed agreements with two Chinese companies, Pang Da and Youngman. The signatures on those deals converted what was a Memorandum of Understanding into a binding agreement that subject to approvals, will provide the stability, strength and reach into new markets that Saab needs to be a sustainable and successful car company.

There has been some doubt in the community as to whether or not those approvals will be forthcoming. The big tick has to come from the National Development and Reform Committee (NDRC) in China.

Two of the key Saab players in the deals with Pang Da and Youngman are Anna Petre, our Director of Government Relations, and Martin Larsson, our Director of Business Development. They both spoke with Trollhattan’s local newspaper, TTELA, yesterday and they gave a bit of insight into the process and how it is evolving. In a nutshell:

  • The applications are made by Pang Da and Youngman, not by Saab, but Saab is in constant contact with all involved and provides all information required by the applicants.
  • The applications go through several stages of approval at levels more local/regional than the national level, prior to being reviewed by the NDRC itself. You progress though one level to the next, and so on. Our progress through this very structured process continues, and the progress that we’ve made so far gives us confidence that the deal will be approved in the near term.

You cannot place enough emphasis on what these deals mean for Saab.

Many have looked simply at the buy-in price of €245,000,000 and concluded that that’s not enough for Saab to commence sustainable operations. What they seem to overlook is that that figure is just the buy-in price. There will be investment in vehicle development, joint-venture manufacturing as well as assistance for re-financing that will change the operation of this company completely.

In Pang Da, we have access to the biggest publicly traded dealership group in China, with over 1,100 outlets. This is a significant in-road into what is now the world’s largest automotive market and will provide Saab with increased demand as well as a much larger distribution network that is already well established and has strong customer links.

In Youngman, we have a manufacturing partner that will see us eventually develop and build vehicles in China for distribution in China and other markets, whilst still maintaining our base and manufacturing in Trollhattan. We also have an agreement in place with Youngman for the development of three new Saab vehicles that were not in our previous product plans – tentatively named as the 9-1, 9-6 and 9-7.

Again, you cannot place enough emphasis on what these deals mean for Saab’s future. It means a stable financial base, increased consumer confidence, vehicle development, manufacturing and distribution. The interests of Pang Da and Youngman do not end when they buy-in to this company. That’s where they begin.

As we speak right now, this is the future that we are seeking a bridge to.

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In Saab’s Corner – Our Brand

September 10, 2011 8:40 Line

By: Swade

Comments (5)

Much has been made of the damage done to our brand in recent years and there’s no denying that some of this is true, especially in recent months. In Scandinavia, the spotlight has been on this company in a way that I think it unprecedented for a car company and quite possibly for just about any company in Sweden.

Amongst all the hysteria, it’s easy for people to translate “brand damage” into meaning “no brand value at all” and nothing could be further from the truth.

Saab is quite literally the last of the independent premium European brands and for the right investor, that’s something that’s worth quite a lot. You can’t create 60+ years of history and achievement overnight. You can’t create enthusiasm or loyalty overnight. Current issues aside, it would take a decade or more to create what Saab has from scratch and that’s if everything goes right for you.

Saab is a manufacturer of premium automobiles, designed in Scandinavia and made here, too, with the singular exception of the 9-4x. Our DNA – Innovation, aircraft heritage and Scandinavian origin – influences everything that do. Our cars are developed with three brand pillars in mind – progressive design, sporty driver focus and responsible performance. These are built into every car we make and those attributes still mean plenty in 2011.

They mean that we minimise the potential adverse impacts for those around us (real life safety, environmental responsibility). They mean that we develop cars that engage the driver in the driving experience, building the car around the driver (our ‘cockpit’ interior is developed that way for a reason). Our designs consistently bring out an opinion in people that observe them, but they also serve people in terms of functionality and safety.

That sort of cohesive, holistic approach doesn’t come overnight, and not without some considerable forethought. We’re not for everyone, and we don’t try to be. But we’re quite deliberate in what we do.

We still have an image as an intelligent carmaker, one who does things a certain way for a reason. We cling without apology to our Scandinavian roots and imagery because it’s a vital part of who we are as a company, and the things we do.

We are fortunate enough to have built a number of automotive icons over the years and we think of those icons with pride: the world-beating early Saab rally cars that ignited passions in people all over Europe in the 1960s. The turbocharged revolution that Saab led in terms of family cars in the 1970s. The iconic Saab 900 range and especially the Saab Convertible that began its life in the 1980s and continues to this day. The versatile combination of performance and practicality of the Saab 9000 Aero in the 1990′s and the mad combination of beauty and brutality of the Saab 9-3 Viggen that saw in the 2000-10 decade, leading on to our most beautiful convertible ever in the ‘noughties’ and a true premium Saab sedan/wagon in the original Saab 9-5.

All of these vehicles have been taken into owners’ hearts over the years and have helped us to build one of the most dedicated and enthusiastic brand followings in the world. “We don’t just have customers, we have enthusiasts”.

This is a community that came out in the middle of a northern-hemisphere winter in January 2010 to demonstrate their love for the company when it was threatened with liquidation in early 2010. In 60 cities around the world, around 10,000 people came out in what was an unprecedented show of support for a car company. You can’t build that sort of support overnight.

As I mentioned at the beginning of this piece, there’s no doubt that the Saab brand has suffered some level of damage in recent years/months.

The core of Saab’s DNA still exists, however. It lives on in our products, our design, our driving experience, and in the hearts of those who work here and drive our vehicles. We certainly need some stability and continuity to get our ‘mojo’ working again, but I’m absolutely convinced that the core principles of this company are worth fighting for, that people will come to Saab when they feel that conditions are right, and when they get to see and experience our new product.

What we have is worth preserving and building on, which is exactly what we plan to do.

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