The perils of Saab
I interviewed the chief designer, Ed Welburn, of General Motors at the Chicago auto show. I asked him what was the one car that stretched his creativity the most. He answered Oldsmobile. It seemed like an unlikely answer, after all, Oldsmobile had become defunct. But his answer was enlightening, and it gave a glimpse into the perils of Saab and the future of our auto industry.
Welburn told me that what happened to Oldsmobile was that the brand was doing well, but the market was changing. How do you change a brand that is doing well just because the market is changing? The designers understood this. They understood that it would be tricky to get everyone on the same page, and Welburn said that the problem was that everyone did not get on the same page.
The problem was that the brand wasn’t respected for the trust it had generated from the public. General Motors changed Oldsmobile architecture and engineering. The Rocket 8 was exchanged for a Chevy engine, and Oldsmobile lost the trust of the brand owners, the Oldsmobile buyer.
Like Saab, Oldsmobile had a true following of customers. Oldsmobile lost those customers when General Motors started homogenizing the product.
General Motors has done the same to Saab, grounding Saab from an aviation-based company to vehicles that seemed to use leftover parts to create cars, not recreate history. Had General Motors set a long-term vision based on the loyal following of Saab owners the resale value of this company would be a great deal more.
As far back as 2003, my reviews of the Saab vehicles show concern over a brand that had a heritage that could be losing its way.
The 2003 Saab 9-3 front-drive chassis was based on GMs Epsilon architecture. In 2005 Saab partnered with Subaru and had a car dubbed a “Saabaru”. In 2006 the Saab 9-7X SUV had the same platform as the Chevrolet TrailBlazer, GMC Envoy, and Buick Rainier. The technology and engines were General Motors.
To be fair to General Motors, Saab would not have survived if General Motors had not purchased them. The problem is, that twenty-nine years later they are in survival mode again. This time, however, one has to wonder what someone will be buying if they buy Saab.
Automotive News reported that a spokesperson for General Motors says that one billion dollars will be needed to keep Saab amphibious. GM is willing to put up $400 million, and let them sink or swim as an independent business starting Jan. 1, 2010.
Is this about the company, or about saving Swedish jobs? Today, February 23, 2009, the Swedish Minister of Industry, Maud Olofsson and Sven Otto Littorin the Minister of Employment traveled to Saab’s headquarters in TrollhÃ¤ttan to discuss plans for a ˜New Independent Saab. If the Swedish government is thinking of buying Saab back will they make it a Swedish built car? Will that include bringing the 9-3 convertible out of Austria and manufacture in TrollhÃ¤ttan?
But what will that company be? Is Sweden willing to buy back the once Swedish company and try to resurrect a company that was failing when it was sold? Why are they willing to buy it now and they weren’t willing to support it then?
It is clear that the Swedish government has its hands full, but the goal needs to be a longer-term vision of what Saab is, should be and how to finance that goal. If this is going to happen correctly, the priority of the moment is the long-term vision of Saab, like a Saab.