Saab CEO Targets New Buyer Within 3 Months – Reuters
The latest from Geneva…
Saab CEO Targets New Buyer Within 3 Months – Reuters
By Christiaan Hetzner – March 3, 2009
GENEVA – Swedish carmaker Saab is hoping to find a new investor within three months, promising profitability even with a volume of as little as 150,000 vehicles sold, its chief executive told Reuters in an interview.
Thanks to reallocating production of its 9-5 model sedan to Trollhattan, its plant should be utilized much more efficiently and far from cutting jobs, Jan Ake Jonsson expects to add jobs in Sweden, where salary and wage costs are very competitive.
“In the next few days we will go out more actively and present our case to the ones (potential investors) who have been showing an interest as well as looking for new alternatives, scan the market,” he said on the sidelines of the Geneva auto show.
Jonsson said potential investors in Saab were from both inside and outside the car industry. He is working to find an ownership solution for Saab before the three-month reorganization deadline expires.
He said this time period would not necessarily include time for due diligence, and that the deadline could be extended on a three-month basis for up to one year.
“We need to accelerate this issue, and I have good hopes we will find interested investors,” Jonsson said.
“If you are fully financed through the government and through GM, it’s a manageable size business so I think it’s easier probably to find a buyer for us than any of the bigger companies,” he said.
With Saab slated for sale and asking for state aid to survive, Jonsson’s business plan will be key if the Swedish carmaker wants to secure a future in a rapidly shrinking market.
“With the 9-5, 9-4x (model) vehicles almost done, we are in a very good shape to be profitable within that range” of 150,000 to 175,000 vehicles. “It’s still a relevant volume range.”
GERMAN PLANS
Jonsson said part of the problem has been the enormous manufacturing complexity of the current 9-5 sedan, which has been in the market for more than 10 years.
He said next year’s relaunch could go a long way to improving margins and boosting Trollhattan’s extremely low utilization rate of less than 50 percent.
“The 9-5 (model) and the future 9-3 (model) are engineered to be manufactured in a much more efficient way. If you take today’s 9-5, it goes back a couple of architectures from a GM point of view — back to probably the end of the 80s,” he said.
“When you go to the next generation vehicles you will have a much more efficient way of building them.”
Since Saab generates two-thirds of its sales in the U.S., UK and Swedish markets, he said it was “critical” to expand shares in European premium segment markets such as Germany, where he believes volumes could rise to 15,000 from a current 4,000.
Jonsson said Saab’s ties to GM will not be entirely cut, though, since it will go ahead with plans to build the 9-4x crossover in a GM plant in Mexico.
“We will be dependent on GM powertrains for a long period of time and when we then look at some of the architecture, some of the components will also be sourced from GM so we will have service agreements that will last some significant time.”