“This is like a small Fukushima,” he said after the press conference. “You start out with a small problem and it gets bigger.”
“We’re basically awaiting the European (Central) Bank’s approval where we carve out the real estate from the collateral, from the (Swedish) National Debt Office,” Muller said. He emphasized that Saab has lowered its request for a Central Bank loan from 400 million euro ($583 million) “which we’re reducing to 280 million euro” ($408 million).
The plan is to have controversial Russian investor Vladimir Antonov, a past investor in Spyker, buy Saab property, including its factory, and lease it back to Saab in order to improve the automaker’s cashflow. Muller announced just before the Geneva show in March that Antonov would purchase Spyker assets, leaving Saab as the sole brand at the company. Shortly after that, Antonov in an interview disputed Saab’s claim it could sell 80,000 cars globally in this, its second year of independence.
Antonov figured Saab would sell 60,000 to 65,000 cars this year, enough of a difference to scare banks otherwise willing to give the company a line of credit. Muller issued a release immediately after Antonov’s comments were published, sticking with Saab’s estimate of 80,000.
Antonov’s comments were part of that “small Fukushima,” second in a series of events that may, ironically, hurt Saab’s chances of reaching 80,000.
Does Muller still believe Saab can sell 80,000 this year?
“We will have to see about that,” he said. Saab hasn’t had time to assess how much the three-week production loss will affect the annual number.
Here’s how Muller described the “small Fukushima,” a “number of events” that “rocked the boat”:
*Saab’s annual report revealed results that were better than Muller had expected, but apparently weren’t good enough for outside investors, he said.
*This was followed by the Antonov interview, in which he said Saab will sell 60,000 to 65,000 vehicles this year, not the 80,000 that Muller has said will allow the company to break even in its second year.
*Jan Ake Jonsson retired from Saab after 40 years. Muller described this as solely Jonsson’s decision. “The man is 60, he’s worked through hell to get this company where it is today.” The work had taken its toll, Muller says, and Jonsson had to resign to “save” himself.
*Saab announced it had hired Nils-Johan Andersson from Lindlab to be its new chief financial officer. A few days later, Andersson returned to Lindlab. Muller said outsiders figured Andersson knew something about Saab’s finances he didn’t like, thus the return, but Andersson simply got talked into staying at his old job.
*Saab then had a conflict with a trucking company which “decided not to unload” parts because the company wanted to make a payment arrangement with which Saab did not agree.
“We have a two-hour stoppage at the factory,” Muller said. “This happens all the time” at all automakers, “but because this was Sweden, the genie is out of the bottle. Within a matter of hours, all the suppliers were stopping deliveries.”
The ever-optimistic Muller said the three-week stoppage has had no effect on product development. An all-new 9-3 is still on schedule for a 2012 launch, he said. The 9-4x crossover, built at GM’s Ramos Arizpe, Mexico plant alongside the Cadillac SRX, will begin deliveries in May and the 9-5 SportCombi goes on sale this September.
Saab’s 9-3 Independence cabrio, a special trim package on the outgoing car, is available now and the 9-3 Griffin sedan and SportCombi will be available in a couple of months. That trim level, with cloth seats and lower content, is selling in Europe for a base price of 19,000 euro, though Saab’s North American operations has not released pricing on our version.
Will this work? Smart money says Saab under Muller and Spyker has been underfunded from the get-go. The dealers desperately need product, and they must convince even the most loyal of Saab buyers that there’ll be a company through the decade to fulfill warranty, parts and service. Sweden’s other automaker, Volvo, has new, well-heeled Chinese owners with much incentive to move some production to that much cheaper location.
It’s impossible to dismiss Victor Muller’s drive and optimism, and his love for cars. It’s also impossible to dismiss the probability that the production interruption will become a self-fulfilling prophecy, and make Saab miss its 80,000-unit sales goal to financially break even. In the auto business, that’s a business plan that won’t work for long.
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