Shooting at Vultures

So…..

The end is Nigh
The Phophets of Doom predicted The End Of The World for Yesterday. Somehow they seem to have miscalculated.

Maybe they are some sort of family of Chatterton in the Ray Bradbury novel “Here there be Tygers”.
Who knows?

But anyhow, there are lots of Doomsday visions and fear of unknown territory going on.
Which brings me to Saab.
How come everybody expects any attempt to refinance saab to be either lies or prone to fail?
Lets take the quick overlook of the situation:

Saab is the only independant established automaker in Europe that is available for buying in to.
There is a liquidity problem which has halted production due to suppliers refusing to deliver until they are payed.

Saab needs financing to pay off suppliers, who are putting up serious demands for delivering again.
On the other hand suppliers would very much like to see Saab survive, so they have common interests.
The suppliers are also businesses, so they need their payments to come through in order to survive themselves, so they are jumpy. But they need the business from Saab to maintain their current positions.
They want to deliver, but they need their payments and some assurance

As Vladimir Antonov is still waiting to be accepted as investor, there are deals being made in China, an enormous market with lots of potential, and lots of people who can actually see the potential in Saab, both as technology base and brand.
The brand alone is still worth a lot, so there is no reason for the Chinese to let Saab go bankrupt and then buy the technology.
They will only be able to use the technology in China, as the rest of the world will always assume that chinese products are inferior. Don’t really know why, but that’s the way it is.
For making the best of their investment they need production in Trollhättan, a Saab alive and producing in its original location, parallel with any production in China.

Bring in the MOU between PangDa and Saab. What is in this is a 2 part agreement.
First:
Pang Da buys production cars for import into China, prepayed to get production up and running.
The CEO states that his target for sales in 2011 is 10.000 cars. Not bad. Initial orders are 1300+700, paid in two payments.
This should be enough to get Saab up and running, and provide shortterm financing.
Off Course we still await the extremely slow bureaucracy of government institutions and EIB to approve Vladimir Antonov, but somehow I think they are just waiting to see that other investors are ready to backup VA and deliver better guarantees for longtime survival.
Part two of the MOU is to prepare for production in China.
This is at the moment at the NDRC, who are taking very good care of Chinese interests in this.
We may not like their ways of controlling their investors and production, but they will do exactly as they like.
At the moment Youngman, who has been negotiating with Saab, apparently blocks things by having an application in for a JV with Saab, thus blocking for others.
As the chinese are not stupid, I think that this blockage will disappear quickly.
Pang Da may state that they want to produce in China, but their partner in the manufacturer industry is BAIC, a state owned company, as opposed to Youngman who is private, which also is the company that bought the old Saab tooling and technology for making their own brand cars, and also the company that was expected to get the new 9-5 when GM put Saab into liquidation, as they are good friends of GM 🙂

Not because I want to make up any conspiration theories, but I just think that the facts are that BAIC and GM had planned to let BAIC take over more of Saab in 2009.
Spyker instead bought it, even though there were problems with VA, who withdrew.
GM still has major interests in Saab, and would like to see Saab live.
I also think that GM likes BAIC, and that Pang Da would very much like to be exclusive distributor of both european and chinese produced Saabs in cooperation with their partner BAIC.
Which bodes well for the possibilities of survival of a Saab based in Trollhättan.

My view of the situation is a simple as this:
Pang Da keeps Saab alive shortterm by buying cars on prepayment
Pang Da and BAIC makes an agreement to produce Saab in China, distributed through the Pang Da network
GM and BAIC congratulates each other
Longterm financing is secured
Vladimir Antonov gets approved once the longterm financing is almost ready and will probably try to set up some sort of production in Russia in cooperation with BAIC and their old Saab technology
All involved parties will have just below 30% of Swedish Automobile stocks

Saab lives happily ever after, suppliers live happily ever after, great cars follow and I can again curse the fact that Danish car taxes are 180% and contemplate moving to Sweden.

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