Randomly Noted

Today comes news Swedish super-car maker Koenigsegg is walking away from its deal to buy Saab from General Motors. A few weeks ago, American super-entrepreneur Roger Penske said his partner, Renault, was pulling the plug on an agreement to buy GM’s Saturn. What’s next? I have a suggestion: GM should walk away from Buick. For many, many years GM maintained too many brands; it neglected the gems it had (such as Saturn, whose cachet it squandered); and it still has too many. A wise GM board would focus on two signature, global brands: Chevrolet and Cadillac. It would kill off Buick, except in China, where the marque doesn’t have the musty image it carries in America. It would fold GMC into Chevrolet as in “Chevy GMC” as a sub-brand. And that would be that – freeing the ex-bankruptcy auto maker to focus on building world-class cars while rebuilding its balance sheet. (To give GM some credit, it has killed off Oldsmobile and Pontiac in recent years and is selling Hummer; that’s still not enough.) As for Saab, a once-desirable European brand GM managed to bungle, WSJ colleague John Stoll reports GM is inclined to let it die. I do wonder about the Chinese firm that was going to partner with Koenigsegg: Might Beijing Automotive Industry Holdings attempt to buy Saab – the name and/or its assets – on its own?

Roger Penske is pulling out of his pact to acquire the remnants of GM’s Saturn. Is it taps for Saturn? It certainly looks like it. In a previous blog I waxed poetic about what Saturn once was, stood for, meant to me personally (when we met, my husband drove a Saturn, with an ironic fuzzy dice dangling from the rear-view mirror…) Now all I can say is: Roger, what were you thinking? In buying Saturn, Penske was getting a brand and a concept, both tired and tarnished after more than a decade of degradation at the hands of GM’s former bosses. Penske, no fool, intended to revive it as a youthful, fuel-efficient car brand built on other auto makers’ spare capacity. If anyone could have pulled it off, it was the entrepreneurial Penske.  Even so, it was an exceedingly long shot. Details are only now emerging but Penske’s announcement says the firm which had agreed to assume production had vetoed the plan, leaving him with no manufacturing base. That partner would appear to be Renault SA, whose interest in producing Saturns for Penske seems to have shriveled up and died. There’s one glimmer of hope for Saturn: As with GM’s Saab, which found a benefactor in Swedish super-car maker Koenigsegg in partnership with a Chinese auto maker, Saturn might find an overseas sugar daddy or mommy. Could the Chinese – who have been circling any number of sick American brands (think: Volvo, Opel, Hummer, Saab) – be on the phone to Penske even now? Stay tuned! Saturn may yet live. By the way, have a look at Saturn’s website. It proclaims: “We’re optimistic about the future.”

China’s Beijing Automotive (BAIC) is investing in Koenigsegg, a Swedish “super car” maker which is in the process of raising money to buy GM’s Saab. BAIC and Chinese car maker, Geely, are said to be eyeing Ford’s Volvo stake. In July, BAIC had a look at GM’s big Opel operation but dropped out amid concerns about intellectual property rights. It all adds up to a Chinese auto industry buoyed by strong growth in domestic vehicle sales and tempted by the overflowing bargain bin which the slumping western auto industry has become. Whether any such Chinese investments reap rewards – in the form of profits or technology transfer -  is another question. I reckon that a few years from now we’ll look back at Koenigsegg-BAIC-Saab and this is what we’ll say: “The Swedes didn’t manage to turn Saab into a profitable car company; the Chinese learned from Saab’s engineers and manufacturing processes while failing to turn it into a marketable brand in China. Koenigsegg sold a few ultra-expensive super cars in China. No one made any money off their Saab investments.” Continue reading…

Some nifty headlines just out from Dow Jones Newswires: The head of the Swedish firm which is buying Saab from General Motors says GM wasn’t a “proper” owner of the car brand. That is certainly true. GM did worse-than-nothing with the brand, effectively letting it wither on the vine. But is Koenigsegg, a maker of fabulously engineered and priced cars, itself a “proper” Saab owner? Or is its acquisition of Saab a job-preservation scheme encouraged by the Swedish government and labor interests? It’s all very 2009, isn’t it? In Germany, the government and labor unions are backing Magna’s bid for GM’s Opel business because Magna and its Russian partners have slavishly agreed to save jobs – this even though a “proper” Opel owner would want to preserve the flexibility to shut plants and trim jobs if that’s what it would take to save the car maker. And in Sweden, the political and labor establishments are also drooling over Koenigsegg-Saab. Meanwhile, the U.S. is in the embarrassing position of owning chunks of Chrysler and GM. Back to Saab: what will it look like in a year? The Koenigsegg CEO says it will be break even in 2012 at which point it aims to produce 100,000 Saabs a year – and it will do so by – surprise! – seeking Swedish government financing …