Overview of the Saab Saga

Since conspiracy theory is running amok all over SU, maybe It’s time to take a more complete look at the situation.

Let’s start at the beginning around Dec 2009:

Oderly Wind Down.
This was the effect of Koenigsegg who pulled out because of the delays with government being very thorough around the EIB loans. This has been covered a lot around the time, so no need to go too much into that.
A pre-requisite for the sale was the EIB loans, and GM was worried.

Spyker came in and negotiated the deal.
Lots of problems with Vladimir Antonov, who had to get out in order to satisfy all parties.
The retirement of VA clears the problems and Tenaci is the money behind the deal. Mullers own finances with backup from undisclosed sources.

The deal is done with the legendary “Fully funded business plan”. And trust me, with all the involved parties looking into it with both political and economical reasons it WAS a fully funded business plan.
If not someone would have pulled the plug.
GM is still heavily involved in Saab with a lot of responsability, and the Swedish Government has taken a great
deal of flak for supporting the deal.
And the EIB are not excactly giving money away for fun.

So without the “Fully Funded Businessplan” there would have been no Saab in 2010.

2010 rolls by, a lot of strategic agreements are being made, development is running fast and new high profile
people are being introduced.
Unfortunately probably not enough as sales are disappointing in regards to the targets.
Not a problem yet, but it hollows out the business plan, and the fix is reducing costs at considerable speed to keep the overhead.
Regarding the “not enough people are being introduced” my own theory is that many of the people in the organization still suffer from GM syndrome, aka. “the guys at the top knows best, so lets not rattle the bushes”, and the fact that earlier being part of a large corporation with lots of money people gets a litte conplacent because they have always had the big brother bank to go to in case of acute problems.
I think that this is still part of some of the culture at certain parts of Saab.

Endresult after 2010 is about 40K cars sold. And probably this can not be counterweighted by rationalization.

Geneva introduces the 9-5 SC, the PhoeniX and a lot of future technologies. The 119g/km 9-3 Sc is also ready.
Everything is looking good.

Probably development costs for all new tech is a little higher than normal production, but it is important to show the flag for Saab as an innovative company and attract new buyers as many of the old ones are not coming back for all sorts of different reasons.
The new 9-3 is still scheduled for production in 2012 and the 9-4x will be introduced during the year.

Still remember the “Fully Funded Business Plan”? It is still the basis of most things going on.
And please remember that a lot of people have prestige, politics and money invested in this.
And that everybody has had a very thorough look at this plan

The release of Spykers Annual Report coincides with JÅJ announcing that he will retire and a emission of shares worth 23.1 mill EUR with connections to Russia. And the new CFO decided not to start
Sales for Q1 is about 10k cars.

Probably time to pull out a couple of skeletons from the closet:

The suppliers took a heavy hit when GM decided to Wind-down, and had to accept a low payment of their outstanding invoices when Saab restarted.
Many of them probably still considered Saab a high-risk but can not live without Saab as buyer, but they make shorter payment terms with the company, at least some down to 47 days.

The retirement of JÅJ in my view was probably a preparation for a change to let VA in as an owner, thus both giving him a possibility to step down in glory, and get a new CEO for the next step.
A well calculated plan involving both getting VA approved as stakeholder and eliminating the EIB loans that are high interest rate, and has taken security in much more than the actual worth of the loan
This has been a stated wish since Spyker took over, so it should come as no surprise to anyone

What happened next was a case of the worst kind of chainreaction FUD I have seen for a while.

Saab is ramping up production to meet the increased demand, and the suppliers can see their outstanding payments will be on the rise. JÅJs retirement announcement probably spooked the suppliers, and Schenker decided not to deliver due to unpaid bills.
This could come from a new Finance system inside Saab, or just the ralatively common practice of letting the
suppliers take the hit by not paying in time, thus keeping cashflow at balance by extending the payment.


It didn’t work.
When first Schenker started many of the suppliers got even more nervous and also stopped deliveries, effectively halting production.
Some suppliers started talking publicly about pre-payment or close to pre-payment for deliveries and talking about stopping deliveries when this was not met.

This is the point where Saab HAD to stop production until matters were solved.

The demands from the suppliers, reasonable or not, effectively means that in order to get production up to the expected levels more cash would be needed to finance the parts.
Since parts are almost 50% of the costs of Saab this is serious, and it completely breaks any kind of sticking to the original business plan.
The original business plan was also calculated in USD, but the exchange rates has changed so much that Saab did a complete recalculation. This may also have been a reason for the production stop

All of this accelerates the need for a quick approval of VA as shareholder, but again government checking and approving delays the process. Not only in NDO, but also with the foreign investors.

In order to keep the damage a low as possible, both economical and image wise, production needs to be restarted asap.
The quickest solution is to sell and then rent the property, thus generating short-term cash until VA is approved and solutions for the EIB loans are in place.

The new owners of Saab property will 2 banks owned by VA, so he is still not in, but he is most definitely there with a quick solution.

So we can expect to see the production start again during the week with these short-term finances.
At the same time VA can work on being approved by all parties as Shareholder.

There is absolutely nothing new in this.

It has been a wish form VA and VM from the start to get VA involved again.
Work on this has been done all the time.

The problems at the moment are in my view just a result of very jumpy suppliers combined with the fact that the plan for getting VA in during the year backfired due to this and bad PR.

Antonov is and has always been the buyer of Saab, with Muller as the visionary up front.


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