Saab Needs Cash

Zeewolde, The Netherlands, 7 September 2011 - Swedish Automobile N.V. (Swan) announces that Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB (collectively Saab Automobile) will file for voluntary reorganization today at 09:00 CET with the District Court in Vänersborg, Sweden.

Zeewolde, The Netherlands, 7 September 2011 - Swedish Automobile N.V. (Swan) announces that Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB (collectively Saab Automobile) will file for voluntary reorganization today at 09:00 CET with the District Court in Vänersborg, Sweden. Swan and Saab Automobile are of the opinion that, considering Saab Automobile’s current limited financial resources, a voluntary reorganization will entail the best preconditions for using existing resources in the most efficient way. The eventual purpose of the proposed voluntary reorganization process is to secure short-term stability while simultaneously attracting additional funding, pending the inflow of the equity contributions of Pang Da and Youngman.

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That’s the opening of the “official” news release put out this morning by Swedish Automobile, which, when it was known as Spyker, bought Saab from General Motors in January 2010.

As a Reuters article about the sale had it: Spyker and Saab make for an odd couple. While Spyker employs about 100 people who built 43 cars last year, Saab has 3,400 workers. Even at this week's inflated prices, Spyker's market value is less than $85 million.  One thing the two companies have in common is an inability to make money, which has made analysts skeptical of the plan. Since the Dutch company [Spyker] was resurrected as a brand in 2000, it has not made a profit.”

Which, as our friend Peter DeLorenzo at Autoextremist might put it, is a “big steaming plate of not good.”

But here’s the thing. As Swedish Automobile head Victor Mueller said at a program when the Saab 9-4X was being launched, many Chinese people are very “brand-conscious.”

And all of its travails of late notwithstanding, Saab is a good brand.

So while people might think that this is the final knell for Saab, I suggest they rethink that. That name has value. It may be losing value in the West because of all of this, but in China, presumably, the brand is still valuable. Given that the Chinese have money to invest and that they are continuing to grow their auto industry, investing in Saab should make sense.

What comes out of the investment may not be Saabs as we know them, per se, but it shouldn’t be relegated to the Island of Lost Car Brands quite yet.