"MUCH loved, seldom bought" might soon be the epitaph of Sweden’s struggling Saab. It seems unlikely that Trollhattan car firm will manage to swerve around its creditors once more. After a court last week rejected Saab’s request for a breathing space to reorganise its finances for the second time in three years, two unions opened bankruptcy proceedings on September 12th for unpaid wages. Saab now has only until September 26th to convince the court that the money for a rescue is on the way at last.
Saab has been on the skids for some months. It has hardly made any cars since April, when suppliers cut it off for not paying bills. Victor Muller, Saab’s boss, has been trying to find a rescuer in China, taking the same road as Sweden’s other car firm Volvo, which was bought by Geely in March 2010. But the rescue team of Zhejiang Youngman Lotus Automobile and Pang Da Automobile Trade has been kept waiting for an approval from the Chinese authorities to invest in Saab, though there are signs this might come soon.
Selling Saab to the Chinese would be the latest episode in decades-long saga. Originally a maker of aeroplanes (Saab is short for Svenska Aeroplan AB), it started building cars in the late 1940s. In 1968 it merged with a lorry company, Scania-Vabis. In 1989 General Motors bought 51% of Saab-Scania’s car division and acquired the rest a decade later. When the world’s biggest carmaker went into meltdown in 2008, it put Saab up for sale. Despite widespread interest from bidders, the credit crunch put paid to any deal, triggering the company’s death throes.
Saab was eventually sold in early 2010 to Spyker Cars, a Dutch maker of supercars founded by Mr Muller. Yet financing from a Russian associate has not been enough, and the Chinese delays have made the position desperate. Saab has always been too small to survive on its own. A volume carmaker (even one making premium models) needs to produce 200,000 a year to survive. Saab has never exceeded 120,000 in recent years. And in 2010 it only sold a pathetic 32,000—mostly in Sweden, America and Britain, its main markets.
From the start, Saabs have drawn on their aeronautical heritage, boasting wraparound windscreens, tear-shaped bodies and the lowest drag coefficient of any cars for the early models. Safety and quirky technology have always been features. In 1958 a Saab was the first car to be fitted with seat belts as standard equipment. Headlamp wipers and washers followed in 1970 (to get rid of snow). Asbestos-free brake pads in 1982 and air conditioning without chlorofluorocarbon (CFC) in 1991 demonstrated green credentials. Saab was also a pioneer of direct electronic ignition, getting rid of distributors and spark plug wires prone to breakdowns.
Just as Volvo and Jaguar lost market appeal in the hands of Ford, Saab was perceived to be dumbed down as GM technology infiltrated the firm—which threatened to poison the brand. Saab drivers tend to be a slightly offbeat, clannish crowd, united in their snobbish disdain for German BMWs or Mercedes. They have variously been dismissed as “college lecturers with tweed jackets and leather arm patches” or “creative advertising types with large spectacles”. If Saab was a singer, it would be Joni Mitchell, cool and stylish in middle age, though with limited appeal.
Sep 14th 2011, 9:40 by I.C. London
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