Tuesday, June 28, 2011

Whither Saab?

For anyone unfamiliar with this word and it's use in this context, it comes from an olde English phrase “Whither Thou Goest?” The slightly rhetorical query loosely translated means “How goes it?” In Saab's case, badly!

In the context of this post, maybe the heading should read “Saab Withers – (and dies)” Because we seem to be just waiting for the death notice in the morning newspaper.

Okay, so this week it took an order from China for just over 500 cars! Wow! The company says that will keep it going for at least another week or so! Yikes!

General Motors did not 'sell' Saab to Spyker Cars, it 'jettisoned' the tiny Swedish car company (with the emphasis on the first three letters, j-e-t), in its efforts to improve its own chances of self-preservation.

However, and here's the rub. Despite its piddlingly small output Saab is not only a small company, but also a 'global' company. It suffers because it has no economies of scale, there's a huge drain on its resources just to maintain its position in the number of markets where it sells cars.

Victor Mueller, who runs Spyker, is an entrepreneur and a dreamer, but I believe he is full of good intent, and what he needs to locate, and mine, is a bottomless pit of money right now. However, I think I'm right in assuming that Saab's new Chinese partner, Pang Da, is NOT the bottomless pit of unrestrained cash Saab is desperate to find.

Last week's news that Saab continued to suspend production, because it can't pay its suppliers, or its workers, follows a decision by the Swedish Government to release some emergency funds, and its Chinese saviour Pang Da agreeing to step up with some progress payments. But, despite the cash injection, it still wasn't enough and it looks like Saab may not last the year out, let alone the decade.

Seeing Hawtai as a saviour for Saab was misplaced confidence. Let's face it, Hawtai is a provincial Chinese vehicle maker, with no international experience, and probably very few street smarts for a volatile, global industry.

I suspect there's little sophistication in its executive, resource and fund management processes, and it is not up to the task of leading Saab back from the brink. Saab's new deal with Pang Da may work out, but this company too is a regional operation, which is essentially distribution. Not sure it has the street smarts to 'manage' a car maker. Mueller's ideal scenario might be "Just send money."

One very telling moment for me was when the respected auto executive Adrian Hallmark came and went in three months. He was barely settled in his chair at Trollhatten when he was head-hunted to help Jaguar. The speed with which he departed Sweden for Gaydon, England, was noticeable.

I've known Hallmark for more than 12 years, and he knows his stuff. He's highly-experienced and highly-regarded, and has run Sales & Marketing successfully for Bentley Motors globally, and Volkswagen in America and China. His integrity and his respect for protocol would never see him admit it, but I reckon he got in the door at Saab and saw what a bunfight lay ahead. Never one to shirk a difficult challenge, Hallmark was nonetheless very quick to leave for more manageable hurdles at Jaguar. That says lots to me about Saab's potential.

So the survival of Saab remains a dream in the misty eyes of Saab enthusiasts and the current management. Mind you, Saab is run by a very good team, and is a very innovative group, but it just needs a guaranteed supply of funds. General Motors sold it for a song, and left it with a couple of new cars in the pipeline – but it needs lots more than that to succeed, and survive.

There's another, more philosophical issue. Saab's current lineup, and its immediate future models are all conventional vehicles powered by internal combustion engines. Despite a flaky concept car, there is no plan, or money to diverge into electric cars, hybrids or fuel cells – so how is Saab going to face the future? Its engineers are certainly clever enough to conjure solutions to that question, but it hasn't the resources to realise it.

1 comment:

  1. Are you the same john crawford that was a rally driver for saab? If so email me at danmonda@gmail.com