Sunday, February 22, 2009

Saab Story 2009 – General Motors and Dan Enter into Talks Regarding Fate of Automotive Icon

I thought I was pretty smart late last year when I very skillfully bullied a Saab salesman into a great deal on a shiny new black 9-3. I knew that Saab had sold something like twenty cars in 2008 and figured that, instead of continuing to lease a car like I had done for almost the past decade, I’d buy a new car outright for a scandalously low price. The salesman ultimately buckled, but he also must have somehow forgotten to mention that Saab was on its very last leg and that its owner, General Motors, was about to leave the company as roadkill along the side of the highway.

GM announced last week that its Saab division filed for bankruptcy in Sweden and that, if it can’t find a buyer for the division in the next few months, it is going to let the brand die. Now, I have this nice new car that’s going to be extinct before it hits 10,000 miles, which, of course, left me in a bit of a predicament. I figured my options were to either buy two or three more new Saabs to use for parts once the company is gone or try to sell the car for some small fraction of what I just paid a few months ago. But then I realized that this was all small-minded, inside-the-box thinking and that a much bigger and better solution was staring me right in the face: buy Saab myself. Not the car, the company.

I thought at first I could probably have Saab for free. The division has been losing money almost since GM bought it 20 years ago, and I assume it’s all saddled with debt. GM thinks otherwise. It’s trying to get $500 million for the division. They first approached the Swedish government, the original owner of the company, and, in effect, asked them to buy it back. Understand that GM has completely and utterly destroyed Saab. It ruined the brand so effectively that I have to assume that, for reasons beyond my comprehension, GM had some kind of mandate to kill Saab. GM’s approaching Sweden to see if they were interested in buying Saab back is the corporate equivalent of a teen-ager buying a used car, wrapping it around a telephone pole, and then asking the seller if he wants to buy the wrecked car back for more than he sold it for. Not surprisingly, Sweden told GM to go kneppa dej sjelv (loose translation – “goo fooken derself”).

So $500 million may be optimistic. I’m ready to sit down at the table and talk about some options. If I could talk GM down to, say, $100 million and get them to waive the dealer, courtesy, delivery, registration and transport fees, I think I could probably make that work. I could put the purchase price on my new American Express Gold Card, which supposedly has no spending limit and can be paid down over time. I get points on that card too, so, if nothing else, I should be good on free plane tickets for the next little while. So then what will I do with Saab once I own it? Well, I don’t know. But really, that’s beside the point. If I can make a few bucks for myself and a few selected friends and not leave the company and its employees any worse off than they are now, the whole endeavor will be a success.

Let’s address the second point first – the automotive equivalent of a doctor’s oath to “do no harm.” As mentioned, the Saab brand is about one single heartbeat away from dead. GM managed to very adeptly transform the cars produced by Saab from quirky and distinct to mundane and utterly interchangeable with almost any other mid-sized sedan on the road. Saab used to have a devoted following in the U.S. of over-educated northerners – hippy-types who, by the time they had driven their first Saab into the ground, had gotten a good job and were ready to buy another one. A few recent last ditch efforts at expanding Saab’s market were so desperate as to be downright embarrassing. Witness the “Saabaru” – a Subaru Impreza with no modifications whatsoever other than a Saab logo slapped onto the steering wheel and the front of the grill. Or the 9-7 truck – a Chevy Trailblazer whose brilliant Saab-style innovation consisted of moving the ignition down to the floor in-between the front seats, and that’s it. The new 9-3 (the dream car I so insightfully snatched up) is built on a Chevy Malibu platform and has a weird Frankensteinish hodgepodge of GM and Saab buttons mixed together in the interior. It’s an exercise in bland imagination and group-think design-by-committee. And sales have reflected this. Aside from me and one other guy I saw in a new 9-3 a few weeks ago, no-one is buying these cars. So, in terms of the integrity of the brand itself, there is just nowhere to go but up. The company is about to be put through the bankruptcy wringer, which means that all pensions owed and obligations payable to suppliers will likely be wiped clean. So, no harm there in me having a go at it.

As for having the wherewithal to run a major automotive corporation, well, I got an A- in driver’s ed in high school, I can name the make and model of a car just by looking at its headlights in the dark, and I can talk about core competencies and synergies and shareholder value with the best of them. Pretty impressive resume, I’d say. So I think I could pull off the whole CEO thing. Who knows what the new new thing will be? A more clever tag line? A slightly more exciting design? Some inkling of an effort to make a car that has some single distinguishing feature? Whatever that elusive thing that may sell a few cars is, I figure I have as good a shot as anyone at stumbling upon it. And in the meantime, by taking a very reasonable seven figure salary and continuing to live my modest lifestyle, I should be able to save up enough over the course of a few years to retire comfortably around the age of forty. I’ll need to grow the executive team, of course, and will be accepting applications soon. Positions will include CFO, COO, Chief Marketing Officer and a handful of executive VPs. I’ll be looking to fill these positions with the kind of people who are fun to spend time with in a corporate jet – funny, good story-tellers, know a lot of jokes, work-hard-play-hard types. And I suppose some sort of experience in the auto industry, or any industry, would be good. Send a resume and cover letter if interested. No photos please.

We’ll see how GM’s continued talks go with Sweden. If they don’t work out and no other big automotive player steps up to the plate, keep an eye out for me wearing a stylish Saab leather jacket and hawking my new and improved line of cars. I bet if I buy the company, I can even get them to throw in a free set of floor mats.


Unknown said...

Dear Dan, I think you might like to know that when we bought our Saab so many years ago, it was advertised as the "well-built Swede". Leslie

Abhijit "Beej" Das said...

Dan -- loved your piece. My first and only Saab was a 1992 9000CD Turbo. I loved that car, a 4 cylinder turbo that produced nearly 220 hp. The turbo was exhilarating, the ride fun, and the design distinctive and quirky. While it wasn't the famous 900 design, I found it to be more me and enjoyed many of the quirks. Reliability was not one of them. When the car's transmission failed me at 45,000 miles only a few months past the warranty's expiration, Saab's excellent customer service offered to replace the transmission free of charge anyway. It is sad that they never produced another vehicle that allowed me to show them my loyalty. While Saab's reliability has improved significantly under GM's ownership, its brand image and customer loyalty have been decimated by the the very moves you discuss. Not sure there is a place for Saab in tomorrow's automotive landscape, filled with a few large corporate holding companies from Germany, Japan, China, India and maybe, just maybe, the US. Whether Saab's around to make another quirky car worth owning someday or not, be proud that at least you tried to take the automotive path less taken, even if GM did eventually block your way...