Saab History

Saab’s story: future brighter – Saab Automobile AB 1991

Posted on 01. Feb, 1991 by Ryan.

Saab’s story: future brighter – Saab Automobile AB
Ward’s Auto World, Feb, 1991

Saab Automobile AB lost $376 million in the first eight months of 1990 and didn’t make money in the last four months of the year, but David J. Herman, CEO of the joint venture between General Motors Corp. and Saab-Scania AB, says things are getting better.

“A big part of the 1990 loss is from correcting past problems,” he says, citing the slow startup of Saab’s assembly plant in Malmo, Sweden; buyout costs from early retirement packages; selling component plants to outside suppliers at less than book value; and reducing year-end inventory from 32,000 to 26,000 cars. “Probably one-third of the ’90 loss is from putting those things right so they won’t weigh us down in the future,” he says.

Saab’s deteriorating finances have caused Mr. Herman to back away from some earlier optimism — future sales of 180,000 annually and a return to profit in 1992.

“I’m not predicting profits,” Mr. Herman says. “Too many economic factors are out of our hands. I’m interested in reaching breakeven at 100,000 units. The target is still about 180,000 cars a year, but if (Saab’s main plant at) Trollhattan is very successful, it’s not necessary for Saab to sell 180,000 to be very profitable. I’d be very happy to |fail’ that way.

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