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Future Products and Prospects
Posted by Gary Stottler (more from Gary Stottler) on Wed, 24 Nov 1999 11:50:56
In Reply to: , Kok Chen, Sat, 17 Dec 1988 12:00:00 

The November 8, 1999 contained a series of articles regarding Saab -

'New Saab boss focuses on Europe'

About Peter Augustsson who was hired as COO last year (from Volvo).  AN
says, 'By the time the 44-year-old executive takes over as president, part
owner GM will have decided whether it wants to buy the remaining 50 percent
of the company it has run since 1990.  But even if GM takes 100 percent
ownership, financially strapped Saab des not expect its American patron to
open its financial treasure chest and pour in millions.'   The article goes
on to discuss the 'consequences of being small' and the opinion that Saab
must first begin to generate profits (which it has begun to do in 1999 to
the tune of $21 million in the first half - since 1990 Saab has been
profitable only once, in 1995 and has lost $481 million since then),
second, better develop its main European markets,  and, third, increase
volume to generate money for developing additional products.   AN says,
'Augustsson is eager to have a smaller car for Saab, primarily to expand
sales in Europe, and a sport-utility for the United States. 'It's
impossible for Saab to stay at a volume of 150,000 cars.  We are
half-pregnant and that is impossible,' Augustsson said. 'We have to decide
whether we continue to grow or go back to 90,000 or 100,000 units a year.
 We need another product.....' '.   In any event, final decisions on new
products are unlikely until the matter of GM's ownership is decided.

'GM Global platform is key to Saab's future products'

This article discusses the use of the GM Epsilon platform as the basis for 
the next generation Saab 9-3 and 9-3 cars.  Epsilon will also be the basis 
for Olds Alero, Chevy Malibu, Pontiac Grand Am, Saturn L, and Opel Omega & 
Vectra.  AN quotes Michael Lapinski (Saab's VP of purchasing) as saying ' 
With Epsilon, we will become part of a real global platform strategy and 
take the advantages.'  It goes on to say 'Epsilon will be the only platfrom 
that Saab will use for its replacement 9-3, due in 2002, and later for the 
larger 9-5.  It's the biggest platform GM's European cars will use.'   In 
discussing Saab's use of GM platforms to date, Lapinski says 'Saab has been 
using Opel platforms since 1993 starting with the 900 replacement.  But 
little other similarity exists between the 9-3...(and) the 9-5 and Opel 
vehicles.'
The article further discusses the purchasing and pricing benefits Saab 
receives from being under the GM purchasing umbrella - Saab's total 
purchasing budget of under $2 billion per year gains huge leverage from 
GM's $100 billion plus purchasing.  Further, Saab will be used as 'carrot 
for suppliers to develop new and more expensive technology, especially in 
safety' which can then be expanded into other GM products.

'Saab turned disaster into success'

The third article focuses on a point mentioned in the first two articles - 
the importance of quality to Saab.  According to AN, who quotes Saab's head 
of technical development, Lars Olsson, the 9-3 facelift was delayed for 18 
months because of quality issues.  AN reports that 'The latest generation 
900 was intoroduced in 1993 using an Opel platform that Saab executives 
said was 'taken off the shelf to get Saab back on track and make it happen 
quickly.'   Several years later, Saab wanted to do heavy work on the front 
and rear to give it more traditional styling.  The company also wanted to 
give the car its first diesel engine.  But Saab was in debt.  It could 
spend only $148 million, and it could not afford to make the quality 
mistakes it had made with the 900.  So the company made some limited 
changes in the engine and suspension and beefed up the body structure to 
improve safety.   ' We made good handling compromises and reinforced the 
safety, one of Saab's cornerstones.' Olsson said.   The facelifted 9-3 was 
introduced in 1998 - very late.  But the delay taught Saab a very important 
lesson about quality.'
The article goes on to discuss the 9-5: 'Saab subesequently redesigned the 
9-5 on the Opel Vectra platform....This time, Saab had more influence and 
more money - $622 million - and could make more dramatic adjustments.  Saab 
reinforced the front body structure and used the common rear axle for the 
9-5.  But the company engineered even bigger differences in the handling to 
make it more appealing to a saab driver.   Olsson is quoted as saying that 
the new Epsilon platform, which will be used for the next 9-3, will be 
Saab's first 'golden opportunity'.

A fourth article talks about the new design firm formed in Norway by former 
Saab chief designer Einar Hareide who left Saab on 10/1/99.   A related 
article speculates that Ford may use the Volvo S80 platform for the 
next-generation Ford Taurus to speed development of that project.
==================
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