Can someone explain, in a nutshell, what caused Saab to go bankrupt?

"MegaSuper" (megasuper) 06/05/2015 at 08:34 • Filed to: None

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I’ve never really read a succinct article about what happened.

So here’s what I don’t get: I understand the following for Saab. Slightly quirky, but very safe vehicles, the company pioneered some safety ideas (starter in the middle of the seats, IIRC you couldn’t start the manual ones unless it was in reverse or something), some high-performance models, not sure if they were reliable or not.

So how did they ever end up being under GM? Was it a case of “ooh, these guys are doing well, let’s buy them and add them to the portfolio (like VW and Porsche I guess)“, or more “haha these guys are failing, we can buy them for pocket change (not to say Bentley or Lambo were failing, but AFAIK it would have been hard for them to make a go of things without VW’s help.)“ ?

Now, while they were under GM, I read that some Subaru models were also sold as Saabs. What was the point of this? Did either of those brands really have major followings/prestige among the general American motor-buying public? Did one completely outsell the other?

After that, what happened? Didn’t some Chinese conglomerate buy them?

If so, then why did Saab not end up like Volvo? They’re Chinese-owned too, but making arguably some of the best vehicles they’ve ever made (in terms of fit-and-finish at least, the new XC90 is astounding.)

Was Volvo truly doing better than Saab? Or were they more or less on the same trajectory to bankruptcy?

Thanks Oppo!

71MGBGT Likes Subarus of Unusual Colors > MegaSuper 06/05/2015 at 08:47

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IIRC SAAB was given GM starting platforms and told to rebody and slightly re-engineer them and they consistently went overboard in one case just throwing out an already installed GPS system and putting in a new one. This killed their profit margins and made them expensive as hell. More money out than in=dead SAAB http://www.forbes.com/sites/frederic…

I might be totally full of shit but I think this is semi-accurate

duurtlang > 71MGBGT Likes Subarus of Unusual Colors 06/05/2015 at 08:58

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More money out than in=dead SAAB

Well, that’s certainly true. Whether this was caused due to mismanagement at SAAB or at GM, or both, will be a longer discussion.

In my opinion SAAB couldn’t keep up due to an aging lineup. The 9-3 and 9-5 were ancient, the replacement of the 9-5 came too late, and there was no compact model. My bet is that old GM failed to invest sufficiently, expecting that reskinned warmed over Opels/Chevies would do the trick. Which they wouldn’t.

Patrick Nichols > duurtlang 06/05/2015 at 09:26

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Failing electrical stuff may have also been a factor. Had ‘99 9-3 (the last of 3 my dad had, I got it in 2008). Can confirm.

There was always headlight problems in all of them and the dash was finnicky. Interior was nice though.

Bryan doesn't drive a 1M > MegaSuper 06/05/2015 at 11:56

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They were severely overpriced when new. Also quirky rarely translates into massive sales success. I miss them, though.

Manwich - now Keto-Friendly > MegaSuper 06/05/2015 at 13:53

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“I’ve never really read a succinct article about what happened.”

Well there’s a good article on Wikipedia:

http://en.wikipedia.org/wiki/Saab_Auto…

“So how did they ever end up being under GM? “

GM bought a controlling interest in them in the late 1980s and took full ownership in 2000. And in the 1980s, Saab wasn’t doing that well. They needed a partner to help them with their next-gen models. The trendy thing at the time was North American automakers were buying up smaller Euro car makers. Ford bought Jag. Chrysler bought Lamborghini. GM bought Lotus and Saab. It’s like the CEOs got into a game for bragging rights. It sure as hell wasn’t due to sound financial advice.

“Now, while they were under GM, I read that some Subaru models were also sold as Saabs. “

That’s was a 2000s Bob Lutz idea with the Saab 9-2X. At the time, GM owned a stake in Subaru and Saab. Subaru was doing well but was small. Saab needed a more modern... everything. They also needed more sales. So a deal was done where the Subaru Imprezza was Saabified. I don’t think it was a bad idea... a more luxurious Subaru.

“Did either of those brands really have major followings/prestige among the general American motor-buying public? “

I suppose Saab had some prestige in North America. But in Europe, I believe it was viewed as being comparable to a VW.

“Did either of those brands really have major followings/prestige among the general American motor-buying public? “

Subaru does. Saab does too... but not as much as they used to. And not enough to keep Saab going.

“Did one completely outsell the other?”

For sales figures, check goodcarbadcar.net.

“After that, what happened? Didn’t some Chinese conglomerate buy them?”

After that, GM went bankrupt, sold off Saab and their stake in Subaru. That caused the 9-2X to die. And they were bought by one company (Spyker), went bankrupt. Bought by another company (NEVS), are basically bankrupt now.

“If so, then why did Saab not end up like Volvo? “

Volvo was in far better shape, had more models, more sales and has usually been profitable. Back when Ford had them in the Premier Auto Group, Volvo was making most of the money in the 1990s. They lost some money in the 2000s. But I attribute that to some managerial idiocy while still under Ford. For one thing, on some models, you had a choice of a Volvo-based engine, a Mazda-based engine or a Ford-designed engine. I can only imagine how that made parts and service really interesting.

“Was Volvo truly doing better than Saab?”

Yes.

ranwhenparked > MegaSuper 06/05/2015 at 17:56

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Saab wound up under GM because they had no synergies with any of SAAB AB’s other businesses and were essentially a capital drain on the other parts of the company. Tiny automakers like then were having a harder and harder time surviving on their own in the ‘80s due to the higher costs of regulatory compliance and stronger competition pushing shorter product lifecycles. Going under the GM umbrella seemed to be the only real way to keep the car division viable.

The car business had been barely profitable under SAAB AB, it sort of paid it’s own way, but still needed cash infusions from the parent company to fund R&D. Under GM, it mostly lost money, but GM saw potential value in the brand and were content to keep subsidizing it while trying different methods to cut development and production costs - like sharing platforms with Opel and Subaru, sourcing an SUV from Mexico, and building a Cadillac at Saab’s Swedish plant. None of that resulted in much financial improvement, and when GM really fell into crisis in 2008-2009, they just couldn’t afford to keep Saab going anymore and either had to shut it down or sell it.

They ended up selling it to Spyker, a small, under capitalized, exotic sports car maker that couldn’t really afford to buy Saab in the first place, let alone afford to finance new product development and a comprehensive turnaround plan, so Spyker stumbled along for a little while until some of Saab’s suppliers started getting alarmed that their bills weren’t getting paid on time and stopped delivering parts on credit, forcing the company to shut down production and go into bankruptcy.