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Not selling Saab is just bad business for GM
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Posted by Vince [Email] (more from Vince) on Tue, 19 Jan 2010 01:25:09 Share Post by Email
In Reply to: Re: Recent Update, Sam's Saab, Mon, 18 Jan 2010 06:40:45
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Actually it's not costly or difficult at all to sell and separate Saab from GM.

1.) Saab has it's own factory. All production lines are currently in Sweden at the Trollhättan factory. The production line of the new 9-5 has already been shipped over from Germany (Opel factory), that happened during the Koenigsegg deal. The production line for the 9-3 convertible has also been moved from Austria to Sweden. No other GM products are being produced in the Trollhättan factory.

2.) The parts that Saab cars share with other GM cars are currently produced. Saab as a separate company would still have to buy these parts from GM for at least the production live of the 9-3 and new 9-5. That's a great deal for GM, selling these parts without worries about if the car the parts are installed in is actually going to sell or not. GM also lowers the cost per part for their own cars. There are no specific Saab parts used by other GM cars, so GM would not have to buy parts from Saab.

3.) No worries of GM technology loss on GM side, because Saab doesn't need it. In general most Saab mechanics agree the original Saab engines (H-type, last installed in the old 9-5) is superior to the GM engines (new 9-3 and new 9-5). Just compare the specs (output, emission and fuel consumption) of the 2.3 L4 old 9-5 Aero engine to the 2.8 V6 new 9-3 Aero...the 'real' Saab engine is better at every aspect! And also much better for usage BioFuels and Hydrogen. GM didn't allow Saab to continue developing their own engines, probably because of cost cutting reasons, but I think that was, one of many, critical mistakes GM made. So GM should just give Saab their old patents back, everybody happy.

These are the most important reasons why it's not very difficult to separate Saab from GM. It actually makes WAY more sense for GM to sell Saab then to wind it down and dismantle the Trollhättan factory. Selling Saab will generate money for GM in two ways: 1) the actual selling price, 2) selling part to Saab for the coming years.

The Opel case was very different and more difficult to sell and separate Opel from GM. Mainly because a lot of GM small and midsize platform engineering is done at Opel as it is basically GM's European headquarters.

GM execs are not stupid (well, I actually think they are, look at the mess they made of a once great company) and if they do the numbers, they come to the same conclusions as I did. Only reason I can think of why GM does not want to sell Saab, is that they think they are eliminating a competitor. That it's cheaper to take a loss now and not loose sales to a new Saab in the future. But in Europe Saab is not a competitor for Opel. Opel people and Saab people are totally different, the number of people that would switch from Opel to Saab or the other way around is very small. I'm originally from Europe so that's why I know this. In the US Saab could only be seen as a competitor for Cadillac, but honestly I think Cadillac wouldn't loose much sales to Saab, as is with Opel, Cadillac people will not buy a Saab and Saab people will not buy a Cadillac (or at least a new one...I've had 50s Caddy myself). Saab should focus on Audi and BMW. Cadillac is (or should be) focussed on Mercedes and Lexus. So the 'kill-the-future-competitor' argument isn't valid either.

Maybe it's just politics, I don't know. But as long as automotive fossils like Mr. Bob Lutz are calling the shots at GM for design and product development, GM is in big trouble and will be making the worst decisions possible I'm afraid. The U.S. Treasury as a 61% stake holder should replace the complete board (again) at GM with knowledgeable professionals, the current board consist of, most likely very knowledgeable people in their own field, but none of them have any experience with large scale production like a car company. One is a very rich layer/investor (famous for throwing a 7 million $ party...), one is a railroad man and two are from the telecommunication industry, just as the current CEO! First installing the ex CEO from Home Depot (a retail company, not a production company!) and now the ex CEO of AT&T is NOT a smart move. Look at Ford, they are doing great...Ford's CEO? An ex CEO from Boeing, with a proven track record and an engineering background! And to have a very talented and knowledgeable designer like J Mays as CCO (Chief Creative Officer) make A LOT of difference too!

Let's hope Saab will be saved!













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