Blog: Glenn BrooksSaab saved. Again.

Glenn Brooks | 16 May 2011

You have to admire Spyker's Victor Muller. A lesser man might have thrown in the towel many months back but his seemingly marathon efforts to strike a deal with a Chinese firm to save Saab appear to have paid off. Perhaps. Today's announcement of an MoU being entered into by Spyker, Saab and Pang Da, the latter a vehicle distribution major in the Chinese market, are claimed to be the newest answer to Saab's liquidity problems.

As for building cars in China, here the plot thickens. Saab fails to name the companies from which it modestly boasts it will select a manufacturing partner. Could Hawtai be back in the frame? Or how about Youngman - this firm already assembles Protons badged as Youngman Lotuses at a plant in the city of Jinan. Choosing to have an existing firm create unique-to-China Saabs from yet to be launched models would also be an easier bet, especially now that the authorities in Beijing finally see the dangers posed by ever-rising levels of potential overcapacity. When the inevitable shake-out comes to China, it will be brutal. And let's not even think about the implications of multiple million families' savings lent by regional banks to car companies that even now, in the boom years, are unprofitable.

The ink isn't yet dry on the proposed Pang Da deal, of course, and no reminder is needed that such agreements can quickly unravel. The list of stakeholders that must now give their consent to the MoU is long - several Chinese government agencies, General Motors, the EIB and the Swedish National Debt Office - and as events of recent months have shown, it won't be an easy task to get all those signatures.

The company now says it won't be paying its long-suffering suppliers until it receives the first tranche of EUR 30m from Pang Da. But can those vendors really wait that long? And still there is no date for a production restart at Trollhättan. Tier 1s and 2s, employees and dealers alike will be hoping that the entire process doesn't drag on and on. And yet, it's hard to see how it won't.

On balance, betting against the energetic and determined Mr Muller's chances of success is definitely not a wise move. His track record at finding financing is excellent, the recent problems with Hawtai notwithstanding (and how interesting it is that neither firm has trashed the other over the failed financing fiasco - Hawtai and Saab may still be talking about other projects). Let's hope that Victor Muller has at last secured the right partner for Saab: there are a lot people who need him to make this new deal stick.


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