TTELA Provides Entire GM Press Conference Recap (Long)

Posted on 19. Dec, 2009 by Ryan in 2000-2009

Trollhattan, Sweden’s TTELA provides the entire recap of the GM Press Conference that took place this morning where they indicated that are now planning on winding Saab down.

This is quite long.

Publicerad 18 december 2009 Uppdaterad 19 december 2009

GM:s presskonferens i sin helhet
TROLLHÄTTAN Här är presskonferensen med GM:s vice vd, John Smith, i sin helhet, tyvärr bara på engelska – vi försöker återkomma med en svensk version.

Here is the full length version of the press conference with GM Vice President John Smith compiled by TTELA on GM winding down the Saab brand. Different American, Brittish and Swedish journalists are asking the questions.

In the press release you said issues arose during due diligence. To be clear, that is due diligence that you performed on Spyker or the diligence that Spyker performed on Saab, and what kind of issues arose?

– If you read the press release carefully, what the language says, certain issues arose on both parties which we didn’t believed could be resolved at the time we had available to ourselves. And at this point frankly I’m not going to add very much meat on that set of bones. Everybody worked really hard and not with very much time for a transaction of this type. Everybody appreciate we have been sorting through potential investors for Saab for the better part of this calendar year – after identifying Saab as a brand that we would either sell or wind down back in February as a part of our viability plan. We’ve spent quite a bit of time then and now with one potential investor, Koenigsegg, and got very close, but in the end Koenigsegg discovered some issues they didn’t think they would overcome and elected to withdraw. When I say we didn’t have very much time basically from the middle last month to now to restart, if you will, an investor process in a incredible short period of time, and Spyker was the one candidate we thought there might be a chance to conclude on the due diligence on both sides. Both sides did it with a lot of hard work, lot of support by the way from the Swedish government, and in the end we couldn’t conclude. And at this point I’m not going to get more specific on the issues on either side.

Was there a problem getting a loan from the EIB?

– I would say we were still in discussions as of this morning with the European Investment Bank who were pitching in to the best degrees that we could. We did not as of this morning have that part of the deal done, so it would fair to say that was still an open point.

When was the discussion closed with Spyker?

– We formally closed things this morning, a short time ago, I don’t have the exact time. There were meetings this morning In Stockholm with the Swedish government and representatives from Spyker and General Motors.

What can you say about the interaction with the Swedish government and what kind of reaction you had from them?

– All the way dating back to February the Swedish government I think has tried very hard to be supportive and I think that has been consistently true. They were working very hard and attempting to make a shoestring catch of a kind since mid November when the Koenigsegg proposal was taken off the table. And they were working very hard prior to that point too. To be honest I cannot say and would not say that there were any open points or issues that I don’t think the GM team could solve with the Swedish government.

What is the Swedish government’s reaction to you calling off the talk with Spyker and in other words the end of Saab?

– I’m not sure I could answer that, I was not in the meeting this morning. I’m sure it is fair to say they are disappointed as we all are that as opposed to finding an investor successfully we were left with the decision to wind down Saab, I think like everybody we would have preferred a different outcome, but we all worked hard for that different outcome and have come up short and I think at this point I think it is best to move on.

You’ve sold some old tooling to BAIC, do you have any plans to sell the completed 9-5 and as far as you’ve got on the 9-4x…any plans for those vehicles to be sold?

– At the present no.

Does that mean that there are discussions of trying to sell them or that they are off the table entirely?

– I wouldn’t say the latter, it is very much possible as part of the wind down process that there might be expression of interest for…the assets of Saab. But at the moment I’m not aware of any such expressions, and not unreasonably so, because we have all been working very hard for a different solution.

Why didn’t you keep up until the end of the year as you had said?

– I think we discovered here this week that there where issues that could not be resolved, and no amount of additional time was going to overcome that. Our view is that it’s best to recognize whenever you encounter it – whenever you recognize a point of impasse – that you recognize to deal with it and move on.

And what do you say to people in Sweden who now suspects that this shows you didn’t really want to give Saab a chance?

– I think that nothing could be further from the truth, we have been working from the very beginning of this calendar year to find an investor for Saab. And we’ve considered many possibilities, quite a few of them by the way not qualified, but many expressions of interest, and the ones that were qualified we ran to the ground in great detail. We worked for several months with one investor in particular, who elected in the end to withdraw his proposal. And in a infinitelly short amount of time as for a business in the size of Saab we have attempted the last few weeks to consider another investor, who was not in the original process, for whom zero due diligence had been accomplished, but they worked hard, the Swedish government worked hard, GM worked hard, but frankly we couldn’t make a match. I assure everyone in this call that extensive effort were made to find a investor for Saab and unfortunately none could be found.

Was there anything more the Swedish government could have done?

– I would say no at this point. They have been alongside and supportive, in the end though, it has been clear from the beginning that the Swedish government would not consider itself an investor. They would support any investor we could find. And we’ve been unable to find an investor.

What do you say to the people in Sweden who work at Saab and are very disappointed at you?

– I would say we too are very disappointed that we were unable to find an investor for Saab, but that we will proceed in the wind down process as quickly as possible and as fairly as possible.

Will dealers be compensated and how will you determine the level of compensation?

– I think Saabs dealers globally has been keen observers of the attempts to find an investor this past year. As with employees, as with suppliers, in the wind down process we will approach the Saab dealers and work out a fair way to proceed. In the meantime, we will very much be supporting our Saab dealers and encourage…owners of Saab should feel comfortable that their warranties will be continued to be honored and that Saab dealers will be available and continue to provide service as we work with the wind down process.

How many jobs will be affected in Sweden and elsewhere in the world?

(Chris Preuss, press officer, replying) – Actually, several thousands, I’m trying to remember the actual number… we didn’t have all the material here, but we’ll make sure it will be posted on our website. I would say it was between three and four thousand employees, the dealer number beyond that would extend it.

What happens to dealers, if you are a Saab dealer do you shut down or what is your options?

– I expect there several different configurations of Saab dealers out there, certainly in the United States. In some cases Saab dealers share facilities with other brands, and that particular subcategory of Saab dealers would consider how to make full use of their facilities, either through growing the other brands through businesses as they do, or perhaps even searching for other brands to go into their facilities. For Saab only dealers they have basically a couple of choices, either to shut down completely and exit the business or consider other brands they might bring into their facilities.

What responsibility does GM have for the people in Trollhättan that now are going to be unemployed?

– It is part of the wind down process, we will have to work with the employees in Sweden, with the Swedish government and be as absolutely responsible and fair as we can and in the confines of Swedish laws. We will give more detail later in appropriate time as things move on. The wind down process hasn’t been the area where we have focused our efforts, we have considered it and worked on it in the background but our primary focus has been finding an investor. We will get into more of these details now as we have announced the decision to proceed with the wind down.

Has the winding down process been a topic with the Swedish government so far?

– I would suspect the possibility of the wind down has throughout this year and working with the Swedish government been on the table as a possibility, but again our primary focus working with them has been to find an investor that is mutually agreeable as between mutual investors, ourselves and the Swedish government, providing government financing.

You are now winding down one of the most famous businesses of Sweden, many are going to be hurt by this. How come you can’t tell us the details on what happened and why you couldn’t find a solution for it?

– I respect the question, the details of the issues that arouse during the due diligence process are not items particularly that we care share at the moment. We’ve tried very hard and not in a very long period of time with representatives of Spyker to find a solution for Saab but it is a big business, it is a complicated business, and it is a business everyone here at this call recognizes has been struggling for many years during its existence, and it shouldn’t surprise anybody that a short period of time and with that background issues that they seem to be insolvable. I appreciate you would like awful lot of the details, but it’s just not something I am prepared to share today. I’m prepared to say everyone worked very hard – the Spyker folks, the Swedish government’s folks, they worked really hard to make this work, but sometimes things just don’t work out.

Any chance a buyer could yet emerge? Is this for sure – Saab is going to shut down?

– We will begin the wind down process, but I suppose it is possible that during the wind down process someone, any number of people, might come forward and express interest in Saab or some part of Saab. There are vehicles that has been developed or in development I imagine would be attractive to some folks, that has not been our focus, we have obviously been concentrating on finding an investor for the whole business. So I can’t rule it out, but the clocks starts now on the wind down process.

How long is the wind down process expected to take? Will you continue to consider those other offers?

– We’re announcing today what we’re going to do next, … (the) process will start in January but I can’t saying sitting here right now when I think it will be completed. We have an idea what is involved, but I don’t have a very detailed time base plan to share with everyone here now. But our ambition would be to wind it down as quickly as possible.

Any chance BAIC would be interested in the whole thing?

– I suppose that there are a chance, we haven’t heard it from them, I think they reasonable concluded as you observed the acquisition of some old Saab items, they may have bigger apatite but we have not heard that from them so far.

How much will it cost to wind down Saab? Because keeping it open would be more cost efficient than closing it…

– We have an idea, it is not a number I would share with all of you today, mostly because, while it is an idea it is also not where we have been spending our time. It has been very hard to find an investor candidate and that is what we have been focusing our team efforts up to this point.

Who owns the Saab brand? GM?

– Yes.

Would you be open to the idea of just selling the brand?

– I suspect it would be possible but as we start the wind down process we might get expressions of interest in the Saab brand as an asset. I don’t know that in fact we will, because we are just making an announcement now what we will do next.

Does GM accept responsibility for Saab, because GM has run the company for a long time and I think many would argue you haven’t made (a particular good job)?.

– There has been no shortage of effort over the past twenty years to put Saab on long term sustainable footing. And I have in various positions myself been involved in those efforts. The global automobile business today…GM itself has been facing restructuring issues. The point is every car maker around the world is experiencing some sort of stress or another. And in that context it shouldn’t surprise anybody in this call that a relatively small vehicle manufacturer, Saab is relatively small using that metric, might experiencing a tougher goal. It is not without significant effort from our part trying to integrating them into our larger GM operation, taking benefit from scale economy and developing suitable products. But for no lack of effort we have not been successful, but in that sense I expect we do accept that responsibility. I think we’ve tried hard, and we’ve tried hard this year to see if somebody else might be able to do better, and we had an extensive investor process to find such a candidate. And that has been unsuccessful, so I’m not sure at this point what more GM could do. Given our own restructuring we need to move on. We made it clear early this year that some brands in our population that weren’t successful enough for continuing in invest in, and we have been focusing very much this last year on restructuring, and as part of that we have been trying to find an investor for Saab and has been unsuccessful. As we said earlier: if we would be unsuccessful finding an investor we would wound the brand down.

Why December 31st? What’s the urgency?

– We’ve been clear since the first quarter of this year as a part of our restructuring plan that we were going to move quickly to put all of GM on long term sustainable footing, and we have set deadlines for a number of restructuring activities as part of that, including several brands: Hummer, Saturn, Pontiac and Saab. And we attempted to find an investor for Saturn, came close, but the investor in the last minute pulled out, so we announced the wind down of Saturn. We already announced the wind down of Pontiac, we’re in the process of selling Hummer. And we’ve been in the process of selling Saab for several months unsuccessfully, so we see really no point in carrying on. So we begin the wind down process in early January.

…when it comes to the loans… the buck stops at Spyker?

– I have observed a very supportive Swedish government in this process, it was noted they were never going to be the investor but would support an investor if we were going to find one. So they did exactly what they said they would do, and did it well, we are certainly grateful for their work even though we’ve been unsuccessful in the end finding an investor. We’ve been attempting to do awful lot of due diligence in a short period of time with Spyker, and both parties as of this morning concluded that there are issues on both sides, I know I’ve been purposely non-specific on what those issues are which I will continue to be at this point. I will not go into the details. But we couldn’t conclude the transaction.

This will be one of the big issues in Sweden, so if you could clarify anything at all it would be helpful. Did you get the feeling that the Swedish government wasn’t going to give the guaranties to Spyker or was it some other issue?

– That is probably a good question for the Swedish government itself…

Does this put pressure on the Hummer sale now that the Saturn sale has sundered?

– It doesn’t change any of the work presently under way to selling Hummer, we have an investor we feel, which have government approval in the process of lining up. I don’t have any reason to at the moment to see one would be affected by the other.

What is next for you?

– I have lots of things on my plate…the corporate planning and alliances..I expect to be busy on more industry consolidations. . This is a year we chose not to repeat.

Tags: car maker, Chris Preuss, John Smith, Koenigsegg, proposal, Spyker, suitable products, Swedish Government, TTELA, vehicle manufacturer