Wednesday, November 30, 2011

SAAB WATCH 2011 : The Hail Mary

On Monday it was reported that the troubled Saab was under the gun to at least begin the process of paying back owed wages to their over 4000 employees.  Failure to do so could have resulted in an entire breakdown of their proposed buyout from Chinese investors as well as their creditors protection that was in place to keep them restructuring.  Well, there has been no word out saying that Saab has paid anyone.  Instead, the reported that Saab has offered a new proposal for ownership of their company.

There was a deal made late in October between Chinese investors and Saab that would see Saab lifted back into business but turn over the company to Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automotive Co.  This did not go over well with General Motors, who even after selling the Swedish based manufacturer last year, provides Saab with a number of parts and technologies.  The saw this deal as a hit to their own production as well as feeding into their Asian market competition.  Since GM still has voting privileges against any deal that Saab might make to sell themselves, GM voiced their veto publicly.  They would not approve of the hand-off as long as their interest was being hindered.  Since then, Saab's deadlines for their tentative deal with the Chinese and to pay owed wages have both come and gone.  Now, however, Saab has a new idea.

In the article this morning, Saab has apparently proposed a new arrangement that would downgrade China's control over the company's stock.  To appease GM directly, Saab offered an arrangement that would give the two Chinese automotive corporations 40% less stake in Saab.  They would instead buy up all the remaining stock in Saab which stands at a cool 60%.  They would still have controlling interest, but both Pang Da and Youngman would get 20% appease less in total stock.  The article reports that is seems unlikely that GM will agree to anything that hands the Swedish company over to the Chinese.

For those who have been following the story for months now, you can probably read into the desperation Saab seems to be under.  While it could be argued that Swedish Automobile, the company that bought Saab from GM last year, has done everything in their power to redeem a dying star, it actually appears as if they keep holding out for something to be given to them.  Why else would they wait over two weeks to respond to GM's denial of their China deal?  Why wait until after your deadlines have passed to try and strike a deal?  This is an unknown and while the company hangs between life and death, one can't help but feel like they simply don't know how to handle the situation.  After all, two months ago they turned down the Chinese offer to buy them out because they didn't want to lose the Saab name.  A month after that, they were against the wall and had no choice but to accept a buyout.  Once more, here they are, procrastinating and postponing their demise.  That is, for now.

Tyler Baker; OSM Writer.

( Source :

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Tuesday, November 29, 2011

Skylark Y'all!

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Monday, November 28, 2011

SAAB WATCH 2011 : Crunch Time

Since signing a tentative agreement with Chinese investors to help restructure and ultimately resurrect the zombified, never-say-dead automotive manufacturer, Saab has been quiet.  Even after General Motors announced they would not support Saab with supplies if the takeover was ratified, Saab remained quiet.  When the deadline on their agreement with Youngman and Pang Da expired, Saab remained quiet.  After all the silence and the shadowed games of musical chairs, the car company may not be able to be mute much longer.  It was reported by today that Saab has a deadline to pay owed salaries and the deadline is tomorrow.

According to the article, the due date for wage settlements for white collar union employees and management is tomorrow (29th).  The owed wages for IF Metall, the blue collar union, was due last Friday.  Saab has not paid into any of them thus far.  While this makes sense, seeing as Saab is currently penniless, they have claimed that the Chinese investors were supposed to pay salaries by today.  Even still, IF Metall will meet at Saab Headquarters in Trollhattan this afternoon.

The more pressing concern for Saab is that failure to at least show the signs that they are in the process of paying their 4000+ work force. Failure to at least have money in the bank account designated for paying the wages could lead to an even bigger delemma.  According to IF Metall legal advisor Darko Davidovic, "if they don't have the money for salaries, they don't have the money for anything."  Apparently, the courts may see it that way as well.  If no money is moved or paid out in the next two to three days, the issue could leave the labor union bodies' hands and carry over to the administrator of Saab's bankruptcy protection.  This means that that Guy Lofalk, the administrator in question, could file to have Saab's court approved reconstruction status lifted.  This move would leave Saab unprotected against a slew of rabid creditors and employees all looking to get the money they were entitled to months ago.

With the due date for the white collar union and management salaries due tomorrow, it will be interesting to see if Saab or the Chinese will come through with the cash.  With the pressure on and the potential breakdown of everything looming on the backburner, we can only play the waiting game on this Saab circus.  Check in with us later in the week to learn more as it develops.

Tyler Baker; OSM Writer

( Source : )

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Monday, November 21, 2011

Tony Stewart takes the NASCAR Championship the hard way

Last night, in what most are calling the greatest finale to NASCAR's Sprint Cup chase of all time, Tony Stewart beat out Carl Edwards both on the track and in the standings to win his third championship.  The truly amazing part is that Stewart and Edwards finished the Ford 400 in first and second (Steward in front of course) and tied in the Sprint Cup Standings.  That is something that until yesterday, had never happened in NASCAR history before.  Unfortunately for Edwards, there had to be a winner and Stewart had the tie breaker on lock.  Having won five of the last ten races of the year and three of the last four, Stewart easily edged Edwards who has only won once this year.

It is an outstanding feat for Tony Stewart to come out on top after starting the year with spectacular disappointment.  He was losing and his team was under-performing on every cylinder.  According to an article on, Stewart was quoted as saying, "If we're going to run this bad it really doesn't matter whether we make the Chase or not."  After that, it seems everything turned for the Stewart-Haas Racing team.  Stewart came storming back into the standings, snagged a spot in The Chase (NASCAR's version of playoffs) and the rest is history.  Now he sits atop the pack, holding the Sprint Cup as evidence of his legendary run.

After the race, Carl Edwards congratulated Stewart for his victory on the track and in The Chase.  To think, Stewart started the race at 15 and at one point was running all the way back at 40 for a time.  Being the skilled driver that he is and the tough competitor he will always be, Stewart managed to weave his way through the pack and into the number two spot behind Edwards, where the two battled for the final 36 laps of the race.  Even though Edwards had led the most laps of the race (119 of 267), Stewart shot past him, going low on a turn and help Edwards off to take the checkered flag.

For those who thought NASCAR has had trouble adjusting to new car styles and teamwork dynamics, the Ford 400 will go down as sacred ground in motorized racing history.  One thing is for sure, NASCAR is far from dead.  Same can be said about Tony Stewart, who is 40 as of this year.  The bad news is the season is over and we'll have to wait till next year's Sprint Cup to see this new age of racing continue.

Tyler Baker; OSM Writer

( Source : ESPN )

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Friday, November 18, 2011

Chrysler pitches in $1.7 billion to replace Jeep Liberty

It was reported in an article by today that Chrysler has announced it will invest $1.7 billion in the development of a new vehicle to replace the Jeep Liberty.  According to the article, $500 million will go to an expansion of the Ohio based Toledo Assembly Complex which produces the Jeep Liberty and the Dodge Nitro.  Included with this will be the creation of over 1,100 new jobs by 2013.

First introduced in 2002, the Jeep Liberty has been a constant performer for the Jeep name, despite lackluster reviews on it's safety performance.  Last year Chrysler reported that they sold nearly 50,000 Liberty vehicles.  While this may not be as staggering a number as the 170,000 plus Toyota RAV4's sold or Chevrolet's Equinox which just missed 150,000 sold, it is a decent number.  Chrysler apparently believes that a replacement model, more geared towards a mixture of it's competitors and it's parent company, Fiat, will help re-establish the Jeep brand and raise sales.  For now, Jeep Liberty will be on the market until it gets benched forever.

Tyler Baker, OSM Writer

( Source : Auto Blog )

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Monday, November 14, 2011

Mitsubishi lose two as U.S. execs resign

It was reported this morning by Left Lane that two U.S. executives from Mitsubishi Motors will step down from their exalted board room seats.  According to the article, the company's North American vice president of marketing and product strategy, Gregory Adams and Mike Krebs, the vice president of corporate planning and incentives have both stepped down from their positions as of October 31st.  Mitsubishi has stated that they have no immediate plans to fill the recent vacancies, but assure consumers that business will continue at the same quality as it always has.

It was also reported that Mitsubishi is seeing a 51% increase in U.S. sales this year, but that they have been struggling to maintain sales at a significant volume.  They have already pulled certain models from the North American market, one of which happens to be the Eclipse sports car.  While they appear to be withdrawing their enthusiasm from American markets, it seems apparent that they Mitsubishi will put their focus on electric and more proven models.  Whether this news is an omen for a new future for the company, one can't help but consider this anything more than trimming the corporate fat and scaling back salaries on what appears, in title only, as two unnecessary positions.  Who knows, maybe this will spark other companies with bloated salaries to consider taking from the top instead of cleaning out capital at the bottom.

Tyler Baker; OSM Writer

( Source : Left Lane New )

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Monday, November 7, 2011

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 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 - )

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Tuesday, November 1, 2011

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, 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, 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, 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 : )
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