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Maybe; maybe not. WSJ this morning reports that Geely has made a bid. Two questions: First, is Saab management in a position to accept or reject a bid? Depending on the ownership (stock) arrangement, possibly not. If current Saab management does control ownership, and Geely is high (or only) bidder, they may accept as an alternative to collapse. If share are owned by GM, deal will go to whomever brings cash and a deal that can be executed. Swedish gov't will likely support any deal that keeps Saab intact, and will not likely reject ownership solely on the grounds that it's Chinese (after all, neither Volvo nor Saab made out very well with the Yanks).
Second question: Would Geely ownership necessarily be a bad outcome? It doesn't suit the auto enthusiast's idea of a technically astute manufacturer run by "car guys," but let's think about it. The Chinese desperately want to join the world auto market, and there would presumably be plenty of capital if Geely were to acquire. In a Geely acquisition, Saab would not be competing with a host of in-house brands (e.g. Fiat), and it is likely that Geely management would give Saab management lots of freedom in development and marketing. At the same time, Saab would gain access to the Chinese market, where it could become a highly competitive brand (leaders there now, among Western mfgs, are Buick and VW). That could increase volume substantially, and Saab's solid construction and front-wheel drive would make it highly suitable to lesser-developed Chinese roads.
In my two, brief business visits to China, I found the Chinese industrial people to be intelligent, often highly astute business people, anxious to develop and enthusiastic about engaging with the West. They have modern factories staffed by hard-working people. They've been very successful with certain lines of earthmoving and construction equipment (my former business), and are moving rapidly into competitive consumer goods. They are rapidly developing technological capability, and cranking out MBA's from both domestic and top schools abroad.
So, the first reaction might be negative, but a Geely acquisition could be a pleasant surprise. Just look at Jaguar under Tata (India) for a possible model. While it's early days yet for Tata's ownership of Jag, the brand has done well since the takeover, and current auto magazine reports suggest continued investment with the engineering in the hands of the auto mfg leadership. None of us would likely turn down a new XF.
Maybe Geely is the white knight for Saab.
SEN
posted by 72.34.2...
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