just-auto.com

THE WEEK THAT WAS: Saab sorted?

By Graeme Roberts | 15 June 2012

Resolutions - of a sort - were on the news agenda this week in respect of Bochum, GM's planned but unconfirmed closing of, and Saab, under new ownership at last. So do bright, sunlit uplands beckon?

If the claims are to believed, a consortium of Chinese, Swedes and Japanese are going to redevelop the current Saab 9-3 as an EV and sell it by the boatload in China. This is not an entirely new idea; Saab had shown off some 9-3 concept EVs before its demise.

The pundits swooped in quick on that. Chinese buyers are actually not that keen on electrics or hybrids. Chinese EV maker BYD is miles off original target. Nissan has poured bucketfuls of yen into marketing the Leaf worldwide but sales are low and slow. GM's Volt, as worthy as the Leaf for doing what it says on the tin, has had production curtailed as demand just hasn't been what it wished. The car has also had controversial battery pack fire issues. Fisker has had to recall the Karma, also for battery problems. Toyota built the first generation Prius in China, but not the second, and the third generation, again locally built, is slow selling compared to other markets.

And carmaking generally requires tonnes of cash while some experience helps; the new owners do not appear to have much background in actual automaking.

With the bluntness only a former CEO can get away with, the one-time chief of European automotive supplier body, CLEPA, Lars Holmqvist, this week told my colleague Simon Warburton he had grave doubts as to the viability of Saab's new owners' electric vision for the bankrupt automaker.

Holmqvist - himself a Swede - was intimately involved with the almost two year battle to save Saab as many of his members were owed considerable amounts of money following the manufacturer's bankruptcy - and, despite the new deal, there appears little likelihood of any of them securing outstanding cash.

"This is a bad development as in my opinion it ends up being within a year, a list of crises, a major crisis and there will be a call for support and jobs that have to be saved," Holmqvist told just-auto.

"There are two hurdles before them still. One, the question of using the brand Saab, that is not yet agreed upon. The other is they need to get a decent partner because there is no chance, no chance whatsoever these guys will be able to build an electric car. They have no idea how to build cars."

Call me a cynic, yes, but I would really like to see this deal work. I don't like to see shuttered plants and laid-off skilled workers wondering how to flip burgers or set up a mowing round. But you have to query that if GM, which despite some mis-steps really does know how to make cars, especially in China, and even Spyker, which knows something about cars, couldn't make a go of Saab, why should a far-flung consortium with no track record in the auto biz? Best of British, and we'll see...

Meanwhile, in Germany, it looks like union and political pressure may end up persuading the aforementioned GM to at least postpone closing Bochum till as late as 2018 (rather than 2014) when the just-launched Zafira Tourer it builds bites the dust. The 2014 deadline was due to an earlier agreement with the unions over a moratorium on compulsory layoffs and that could also be extended, to 2016.

The pundits have been all over that one as well and one columnist suggested that maybe former post-bankruptcy chairman Ed Whitacre should have listened more closely to former CEO Fritz Henderson and allowed him to dump Opel back in 2009 when a Russian consortium led by Magna was willing to buy. Again, we'll see. Opel is working hard on developing some new markets, including Australia, and getting more Germans to buy its cars, so maybe a miracle will happen but I still think that, even if shifting some Chevrolet build from Korea to Germany improves plant efficiency they still have at least one too many.

Still, there's some decent product in the pipeline but it won't all be built in Germany. The Astra sedan, by the way is the European version of Buick's Verano. In case you were wondering.

EVs may be slow to get started but they are not going away and once the range is sorted, with developments like this, and the prices start to come down - think what happened with mobile phones and flat TVs - sales will start to rise. BMW sure thinks so and is giving its British potential customers 18 months notice with a shiny new showroom in Park Lane, London.

Have a nice weekend.

Graeme Roberts, Deputy/News Editor, just-auto.com