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Detroit News Columnist Blasts GM For Saab Collapse

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On: Wed, Dec 21, 2011 at 12:05PM | By: Chris Salamone

Detroit News Columnist Blasts GM For Saab Collapse

Issued today, Daniel Howes delivered a gut-wrenching opinion column in The Detroit News which effectively decried Saab as the ‘neglected stepchild’ of GM’s scheme for worldwide automotive colonization. Considering Saab CEO Victor Muller filed for bankruptcy on December 19, after years of questionable GM leadership and a final rejection of the proposed Chinese restructuring, Howes’ article would appear to be accurate.

However, in the spirit of fairness, let us not forget that a theoretical opportunity still remains during the bankruptcy process for a buyer to step in – a fact that GM and Saab execs are certainly aware of. Further, GM’s initial Saab makeover was anything but neglected. The company gave Saab the full American treatment, intended to take Saab from the quirky nether realm of Swedish aircraft devotees to a mainstream public.

The problem: GM failed to capitalize on the makings of Saab’s trademark oddball practicality.

After buying Saab’s remaining shares in 2000, GM posted a profit in only a single year. Product lines crumbled and technology updates become fewer and fewer.

But rather than focusing on an unfortunate past, perhaps we should be focusing on the future…while there’s still time.

Referring to GM’s brand control of Saab, Howes stated: “But GM was not prepared to save Saab because its distracted, volume-obsessed, careen-to-the-next-crisis executives probably never were. Rarely in the annals of the modern global auto industry has a company capable of doing so much well done so badly, so deeply misunderstood a brand that could have been something very different than the dissipated, under-capitalized hulk it became.”

We now know that GM’s brand and marketing decisions of the late 1990s and early 2000s were – for the most part – universally bad. But let’s not confuse generally poor business practices for ‘neglect’ of a single brand.

The article also notes that Muller’s recent bankruptcy filing came after GM’s rejection of a possible Chinese bailout. “GM blocked the sale of Saab to would-be Chinese investors on fears that GM technology licenses and hardware would become property of Chinese rivals seeking any advantage to exploit in their campaign to become credible global automotive players. Acquiring established brands such as Volvo or Saab, along with their distribution networks, would be giant steps in that direction.”

Of course GM would consider a Chinese acquisition of assets potentially harmful in a global economics sense, but let’s keep two things in mind. First, the Saab lineup is grossly out-of-date. It’s not as if Chinese automakers will compete more strongly with the good General by using platforms from 15 years ago. Secondly, even if competitive technology acquisition was GM’s main concern, that fact only serves to negate the argument that Saab is a ‘neglected stepchild’ and GM has every logical and moral reason to block a transaction which could be harmful to the company in the long run.

Sure, major automakers worldwide have struggled in the last decade – which is how the Big Three were able to buy up so many, formerly independent, companies in the first place. Saab’s bankruptcy filing may, in fact, create a more fertile breeding ground for outside investment which benefits both Saab and GM.



Stephy21 | 9:24AM (Thu, Dec 22, 2011)

Great article, i hopefully some one will help out Saab.

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