DETROIT - Can Saab make it alone as a small, quirky, Trollhattan-based automaker? Can it find a well-funded savior, like Aston Martin's David Richards or Jaguar/Land Rover's Rattan Tata? Saab has filed for bankruptcy protection in Sweden, with the plan to become an independent automaker again before General Motors can cut it loose on the cold, cash-strapped world. GM Chairman and CEO Rick Wagoner announced earlier this week that the teetering Detroit giant would stop product support for Saab on January 1, 2010 if it couldn't find a buyer. Now Saab expects to emerge from Chapter 11 in three months -- by the end of May.
And therein lies the rub. With the global economic crisis hitting virtually everybody, it's going to be nearly impossible to find any kind of capital of the type needed to fund even the smallest of car companies.
What's more, we've been arguing the pros and cons of a GM and Chrysler LLC bankruptcy for at least a quarter of a year, now. Saab's bankruptcy will give us a snapshot of what a car company Chapter 11 will be like. Will loyal customers rally to the brand, or will they worry about warranty, parts and other support?
"We are looking for outside creditors, people who would be interested in investing," Saab spokesman Jan-Willem Vester told me Friday morning. "For now, it's business as usual." And that includes Saab's 48-month/48,000-mile warranty. Saab eschewed GM's 100,000-mile warranty last year in favor of free maintenance for the first three years of ownership, a deal that competes better with BMW, for one.
Saab's U.S. sales dipped 34.7 percent last year, to just 21,368 cars and trucks. That's less than half the number of Minis that BMW sold here last year. Saab sales never matched Mini's 2008 U.S. sales of 52,000; the Swedish brand's best year here was 47,914 in '03, and it has sold 1.1-million cars in the U.S., its biggest market, since import began in 1956. Worldwide, Saab sold just 93,295 vehicles in 2008 -- consider that in '08, a disastrous year for everybody, BMW sold 112,464 3 Series in the U.S. alone. Saab's global record was about 135,000 cars and trucks in 2006.
So what kind of cash infusion does Saab need? That question is impossible to answer, for now. It builds the Epsilon-based 9-3s in Trollhattan, the soon-to-be-replaced 9-5 in Russelsheim and the nearly discontinued 9-7x in the U.S. The 9-4x smaller crossover utility sharing its "premium Theta" platform with the 2010 Cadillac SRX also would be built in the States.
Before GM's reorganization plan, an all-new Saab 9-5 was to be built on the latest-generation Epsilon platform in Germany. So while Saab Automobile reorganizes, managing director Jan Ake Jonsson has to figure out whether it would be more cost-effective to expand the Trollhattan plant to accommodate new 9-5 production, or whether it will try to buy production from GM. If it chooses the latter, it will have to cut a deal with GM on the cost of those cars, and the General isn't in the position to be charitable right now.
And it probably will have to buy U.S. 9-4x production from GM. The compact crossover looks to be a much better match for the brand than the truck-based 9-7x, which was only sold in North America.
"With an all-new 9-5, 9-3x and 9-4x all ready for launch over the next year and a half, Saab has an excellent foundation for strong growth, assuming we can get the funding to complete engineering, tooling and manage launch costs," Jonsson said in a prepared statement. "Reorganization will give us the time and means that help get these products to market while minimizing the liquidity impact of Saab on GM."
Saab could make it as a small, independent company in normal times. Right now, I'd give it less than a 50/50 chance, though it will help if the Swedish government offers aid to independent Saab in the way it wasn't willing to aid Saab under GM. The big lesson from all of this is that GM has always failed to understand the Saab brand -- more so even than Daimler misunderstood Chrysler. GM wanted to make a small, quirky car company with a small, quirky following a premium brand and grow sales and profits. It never made a profit from Saab.
Growing sales is almost antithetical for a small, quirky brand, though BMW has proven that with Mini it can be done. Now it's up to Saab, on its own, to prove that small and quirky can stay small and quirky and still make money in the car business. That's going to be a tough one.