IMPORTANT NEWS: National Electric Vehicle Sweden has agreed to buy the assets of Saab Automobile and the sale is expected to be finalized during the summer.

Friday, June 8, 2012

Saab Parts not likely to be part of future Saab

Swedish newspaper Svenska Dagbladet reports that the Swedish National Debt Office, with its CEO Bo Lundgren, now confirms that it will take over and run Saab Parts.

In 2010 the National Debt Office (NDO) guaranteed a SEK 2.2 billion loan Saab Automobile AB took in the European Investment Bank (EIB). The collateral for the guarantee were the shares in Saab's spare parts company Saab Automobile Parts AB (Saab Parts). When Saab Automobile files for bankruptcy December 19th last year, the NDO soon after paid back Saab's loan to the EIB and in return in principle took ownership of Saab Parts.

Saab Automobile Parts AB in Flättnaleden, Nyköping

The NDO has had three alteratives to get back the SEK 2.2 billion it paid to the EIB.

1. Sell Saab Parts for SEK 2.2 billion to the company that buys the Saab Automobile bankruptcy estate.
2. Sell Saab Parts for SEK 2.2 billion to a third party.
3. Keep Saab Parts, run the company and hope that the company's profits over the years will make up the SEK 2.2 billion.

The first alternative has proved difficult now that National Electric Vehicle Sweden is the most likely buyer of Saab Automobile. NEVS is not interested in buying Saab Parts and serving the current Saab owners with parts and services.

The second alternative is also looking difficult since no third party will pay SEK 2.2 billion. According to SvD, Saab Parts has experienced trouble reaching it sales objectives due to difficulties distributing spare parts to the US and the UK which are two of Saab Parts biggest markets. When Saab Automobile went bankrupt it eventually also took down its US subsidiary. And with no Saab company in the US, Saab Parts had trouble distributing parts. Not untill this week a new subsidiary of Saab Parts were established in the US. In the mean time US workshops and dealers have found new suppliers, which means that Saab Parts will have trouble reaching it sales objectives. And with prospects of large future profits fading, no third party will risk paying SEK 2.2 billion for Saab Parts.

The third alternative is now the alternative of choice for the NDO and its CEO Bo Lundgren.

"We will take over Saab Parts AB if the buyer of the bankruptcy estate will not have the company. A buyer would today value Parts to less that we demand for the company. Reason being the restructuring and the problems with the bankruptcy at the US distributor," Bo Lundgren said to SvD.

Lundgren also wants Saab Parts to start distributing spare parts for other car makes.

"It [Saab Parts] has over 1,000 authorized sellers of spare parts. They could probably also supply parts to other makes," Lundgren said.

The good thing about this is that of all the possible owners of Saab Parts, the NDO, which is a government agency, is the best guarantee for Saab Parts to continue supplying spare parts to all Saab cars, including the new Saab 9-5 and 9-4X.

The bad news is that this means that Saab Parts will not be part of a new Saab. And if "new Saab" does not want Saab Parts, then "new Saab" is more or less not interested in the current owners of Saab cars and the history of Saab.