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NINETY EIGHT REGENCY

Gm Never Solved The Saab Riddle

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GM never solved the Saab riddle

DAVE GUILFORD

AUTOMOTIVE NEWS

NOVEMBER 30, 2009 - 1:00 AM ET

This looks like the end for the brand that never fit.

When Koenigsegg and partners backed out of their deal to buy Saab from General Motors Co., they left Saab to GM's unsentimental mercies.

For a sample of GM's thinking, flash back to Fritz Henderson's press conference at the Geneva auto show last winter. A journalist asked Henderson what would happen if there were no buyer for Saab.

Henderson, then GM's COO, didn't hesitate: If there's no buyer, we close the company. That would end GM's efforts — awkward to the end — to figure out what to do with Saab. GM's board is expected to decide Saab's fate on Tuesday, Dec. 1.

GM even bought Saab in a half-hearted manner, first picking up 50 percent in 1989, then buying the rest 10 years later. It was part of an effort to build a global luxury brand to rival Mercedes-Benz and BMW, a goal that has eluded Cadillac as well as Saab. That was in an era when large automakers such as GM (and, to be fair, Ford) were picking up prestigious European brands like magnets attracting random objects.

Once the brands were in hand, the new owners faced an inherent contradiction. What customers loved about those brands was their flair, their quirky impracticality — be it the floor-mounted ignitions of Saab or the burled walnut of Jaguar or the blocky styling of Volvo.

Yet those lovely old brands, evocative of country estates and snowy Scandinavian capitals, were losing buckets of money. The obvious solution, it seemed, was to gain economies of scale by moving them onto high-volume platforms. The hard part was to maintain their charm — to keep Saab Swedish, in other words.

That tension was obvious, as when Saab fiddled with the dimensions of the 9-3 convertible just enough to make it nonconforming to GM's global Epsilon platform, infuriating the Detroit brass. Yet weren't the Swedes trying to make the 9-3 something more than a dutiful sibling of the Opel Vectra, Pontiac G6 and Chevrolet Malibu?

There were other problematic products: the 9-2, a rebadged Subaru Impreza WRX best known as the "Saabaru"; the 9-7X, a rebadged Chevrolet TrailBlazer SUV; and a 9-5 that went unchanged for way too long.

The worst thing was that Saab kept losing money.

I recall interviewing one GM honcho who re-enacted, complete with a devastating mock-Swedish accent, Saab executives' requests for GM cash infusions. The animosity was clear.

So Koenigsegg's withdrawal suggests that Saab's days are numbered. It also suggests that the riddle of how to keep a stylish, low-volume brand alive — unless it sells cars for $200,000 or more — may never be solved.

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Product planning and design were the problems with SAAB. They should have been given more autonomy on those two items as the industrial side becomes almost irrelevant given modern facilities' flexibility.

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i think GM wants to see how the 9-5 will so. and 9-7x. saab has two new products now. You almost have to see those through.

the 9-3 can soldier on for about 3 more years if they give it a new dash and up the value proposition.

saab really needs a sports car/halo model. the aerox was cool.

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What riddle? There was no riddle. They let the 9-5 rot on the vine, the 9-3 is based on the Vectra and felt cheaper than it should have, it's also long in the tooth. Then they gave Saab a Subaru and a Trailblazer. Wow, I can't imagine why the brand never did well! :rolleyes:

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Freakishly easy to gloss over the details and blame 'big bad inept GM', but there are real clues to the issues behind the scenes to be found in the above piece. Witness :

>>"GM's efforts... to figure out what to do with Saab."<<

and

>>"The obvious solution... was to gain economies of scale by moving them onto high-volume platforms."<<

but then we have :

>>"when Saab fiddled with the dimensions of the 9-3 convertible just enough to make it nonconforming to GM's global Epsilon platform"<<

How can that last quote be factually possible ???

Obviously, saab was never completely under GM control (despite legal ownership), therefore the blame legitimately must be split. The idea that saab has been 'starved' or 'held back' is laughable- they already have proven they cannot exist on their own, or take advantage of economies of scale to put a few bucks in the product coffer. Instead, they just twiddledick around in engineering, hamstrung by 2 or 3 decades-old 'quirks' and empty nationalistic bravado, unable to break free and truely advance. The brand is up to it's eyeballs in slow-acting quicksand.

And spinning saab off to another conglomerate with the same saab management that will not look at the business case of saab is going to produce the same results.

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