Tag Archives: Government Motors

Did GM Fill The 22% Financial Hole In the Saab Deal?

Posted on 03. Sep, 2009 by .

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The local reports that it was not an anonymous investor, but solely the work of Government Motors that filled the remaining 22% hole that previous U.S. investor, Mark Bishop backed out of.

What seriously concerns me about this deal is that I honestly feel that this “loan” won’t be without a significant amount of strings from GM to Saab. Furthermore, this means that the newly “independent Saab” will have nearly a quarter ownership by the company that they are working so hard to be a part of, GM. How is that going to work in Saab’s favor when a huge percentage of the ownership is status quo as we know it well circa 1989-Present?

I have deep concerns about the independent nature of this new company still referred to by GM as a brand, which I maintain should be referred to as an independent company. I guess Saab won’t be independent until they are literally independent of GM, correct?

If you are a U.S. taxpayer, this means you are part owner of a Swedish, Norwegian, Russian automobile company due to the 60% U.S. Treasury owned GM.

I leave you with the article from the local today that does not need any translation.

GM to fill Saab funding hole: report

http://www.thelocal.se/21830/20090902/

The prospective purchaser of the ailing Saab Automobile company – the Koenigsegg Group – has found new investors to enable it to complete the deal, according to reports in the Dagens Industri business daily.

Saab’s current owner, General Motors, will also stump up three billion kronor ($412 million) to fill the funding hole.

The paper’s information reportedly came from a source close to the deal. Koenigsegg Group, which has been pressing the Swedish Government over the last two weeks for top-up funding in order to save the company, has stated that it can now complete the deal without government assistance.

“Koenigsegg Group no longer needs additional financing from the Swedish state due to securing financing with the help of GM and new investors,” said the source.

The new settlement may be presented as soon as next week. Saab requires approximately 11 billion kronor ($1.5 billion) before the company can begin to operate profitably, according to the Koenigsegg Group. Current owner GM has already contributed 2.8 billion kronor ($385 million) in the form of a loan and through paying for production equipment for the new Saab 9-5. The Koenigsegg Group has contributed 720 million kronor.

The company also hopes to secure a loan from the European Investment Bank of around 5 billion kronor. In order to secure that loan the company will require a guarantee from the Swedish Government.

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European Investment Bank Tells Saab History That Koenigsegg-Saab loan Won’t Be Reviewed Until October

Posted on 25. Aug, 2009 by .

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The European Investment Bank has recently indicated to Saab History what the media has been speculating recently, that the loan application for Saab Automobile & Koenigsegg, will not be reviewed by September 30th, but by sometime in late October.

Secondly, it has also been indicated by the EIB below that the EU-Commission needs the Swedish Government to act as a guarantor of this loan so that the commission can approve this loan for the EIB, then the loan process can continue, and not until this takes place first. (ie. Swedish Government -> EU Commission -> European Investment Bank=Loan Approval)

This effectively means that the financial support for the sale of Saab Automobile will not take place until the Swedish Government gives the EU commission the ability to approve the project, and finally the EIB ultimately approves the loan in the end. This entire process appears that it will take up a good part of September and October, perhaps even a little after. Saab has until the end of December of this year until Government Motors ends their financial support for the company.

I hope this sets the record straight as to when the financing will be “complete”.

Subject: Questions on Koenigsegg-SAAB Automobile EIB loans

Dear Sir,

The current status of the SAAB loan application with the European Investment Bank (EIB) is that the most likely scenario is that it will be presented to the bank’s board in October.

When the bank had received all the relevant project related economic financial information from the new owners concerning the SAAB project the EIB staff were able initiate a formal due diligence to discuss together with the borrower to verify and stress test the lenders’ business plan in order to be sure that the loan can be repaid.

When the bank starts to formally analyse a project a letter is sent from the EIB to the EU Commission requesting a non-objection from the EU-Commission to the project as this is needed in order to be sure that the loan is in line with EU objectives. The Commission needs to respond to the bank within 2 months and the board cannot approve a project until there is an “inter-services agreement” on a non-objection from the Commission.

After having analysed a project, the EIB staff submits reports covering the loan application to the management committee in order for this to decide if the loan application should later be presented to the board. These reports are distributed one week ahead of the management committee meeting which takes place four weeks in advance of each board meeting. This means an internal process of 4-5 weeks after the due diligence is finished.

An EIB loan to SAAB will most likely require securities, such as a swedish state guarantee for the EIB loan.

The process to get Commission approval for state guarantees for loans needs to be initiated between the Swedish government and the EU Commission and this process needs to be more or less completed before the EIB can approve the loan.

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New Government Motors Emerges From Bankruptcy Court

Posted on 10. Jul, 2009 by .

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The new Government Motors, 60% owned by the United States Treasury Department & 11.7% owned by Canada’s Government, emerges from bankruptcy court today, and surprise-surprise, even though Saab Automobile is part of this “new GM”, they aren’t mentioned in the press release below:

New GM to Focus on Customers, Cars and Culture

The New General Motors Company Launches Today

* GM gets back to the business of building great cars and trucks, serving customer needs
* New company created from GM’s strongest assets
* Four core brands backed by the nation’s largest and strongest dealer network
* Streamlined organization on a global basis for faster decisions, sharper focus on the customer
* Commitment to open communications

DETROIT – The new General Motors Company began operations today with a new corporate structure, a stronger balance sheet, and a renewed commitment to make the customer the center of everything the new GM does.

“Today marks a new beginning for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers,” said Fritz Henderson, president and CEO. “We are deeply appreciative for the support we have received during this historic transformation, and we will work hard to repay this trust by building a successful new General Motors.”

Created from the old GM’s strongest operations in an asset sale approved by the bankruptcy court on July 5, the new GM is built on:

* Four core brands in the U.S. and the largest, strongest dealer network in the country,
* A fresh lineup of Chevrolet, Cadillac, Buick and GMC cars, trucks and crossovers, each with leading-edge designs and technologies that matter to both consumers and the environment,
* A competitive cost structure, a cleaner balance sheet, and a stronger liquidity position that will enable GM to invest in new products, key technologies, and its future,
* A winning culture focused on customers and products.
[…]

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General Motors Plans To Become Independent Of Itself

Posted on 07. Jul, 2009 by .

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General Motors, on the day of the news about their asset sale being approved by the New York City bankruptcy court, is one step closer to being independent of itself. It sounds like GM trying to mimic Saab Automobile once again, where Saab wanted to become independent of GM carving itself out of the brand portfolio. However, one can only be so independent with governments having a majority stake.

The “New GM” will be a 60.8%” majority ownership by the U.S. Treasury Department & 11.7% Canada & Ontario Governments, giving it an appropriate name of “Government Motors” for the time being with over 70 percent owned by North American governments.

On the other side of the spectrum, I find it almost comical that the remaining 10 percent of the “old GM” will be now given the name “Motors Liquidation Company”. It’s clear that this name for the “old GM” company has only one purpose and I guess that name was given to ensure that’s the case.

The part that I would like more details on is, how much of Saab Automobile is part of the “new GM”, all of it, or some of it?

Here’s hoping a breakdown chart comes out in the future describing in detail, what’s part of that “old GM”.

Here is their press release:

Approval marks another step toward the launch of an independent new GM

GM 363 Asset Sale Approved by U.S. Bankruptcy Court

NEW YORK – General Motors achieved another milestone in its reinvention last night when Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York approved the sale of substantially all of General Motors Corporation’s assets to NGMCO, Inc., an entity funded by the U.S. Department of the Treasury. In connection with the closing of the sale transaction, NGMCO, Inc. will change its name to General Motors Company and continue to operate under GM’s historic corporate and sub brands. The approval marks another step toward the launch of an independent new GM.

The new company will acquire GM’s strongest operations and will have a competitive operating cost structure, partly as a result of recent agreements with the United Auto Workers (UAW) and Canadian Auto Workers (CAW).

The new GM will have lower leverage and a stronger balance sheet, which when combined with a lower break-even point, will allow it to reduce its risk, operate profitably at much lower volume levels, and to reinvest in the business in the key areas of advanced technology and product development. GM’s subsidiaries outside the United States will be acquired by the new company and are expected to continue to operate without interruption.

The new GM will be headquartered in Detroit and will be led by Fritz Henderson as president and chief executive officer and Edward E. Whitacre, Jr. as chairman of the board of directors.

“A healthy domestic auto industry remains vital to the global economy and we deeply appreciate the support the U.S., Canadian and Ontario governments and taxpayers have given GM, and the sacrifices that have been made by so many. This has been an especially challenging period, and we’ve had to make very difficult decisions to address some of the issues that have plagued our business for decades. Now it’s our responsibility to fix this business and place the company on a clear path to success without delay,” said Henderson.

The new GM’s common stock will be owned by:

· U.S. Department of the Treasury: 60.8 percent

· UAW Retiree Medical Benefits Trust: 17.5 percent

· Canada and Ontario governments: 11.7 percent

· The old GM: 10 percent
[…]

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Swedish Media Say Saab Is Part Of The New GM

Posted on 07. Jul, 2009 by .

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The Goteborg Post, a newspaper in Goteborg, Sweden the same city where Saab Automobile’s 125 person marketing, sales & design office is located, was quoted stating that Saab Automobile is actually part of the “new GM” citing their need for funding, regardless of their interest of becoming independent.

Saab is part of the “New GM”

The federal Judge Robert E Gerber has approved U.S. Government, and GM’s plan to split the GM of a healthy and a sick part. Contrary to all the tips ended Saab in the healthy part.

Saab needs more money

– We have just received notice that Saab is located in the “New GM”, until the sale is completed. That we did not before, “says Saab’s Gunilla Gustavs for GP.
Otherwise, Saab’s attitude to what happens in the bankruptcy court does not affect Saab.

– We speak with the same people, “says Gunilla Gustavs.

The plan approved in American law on Sunday night means that the government takes about 61 percent of GM’s assets after having borrowed the car maker to 50 billion dollars.

In the 95-page ruling, sales to proceed. There are a few days the right to appeal, but Judge Gerber was very clear in his writing.

Several players tried to stop segregation. According to Gerber would be the only option A discontinued the liquidation of the Group which would mean that the complainant did not receive any money at all ..

In writing to the conviction, he called this “a disaster for GM’s creditors, its employees, suppliers who depend on GM for their own survival and the communities in which GM operates.”
[…]

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The Daily Show Showcases Life In Sweden

Posted on 26. Apr, 2009 by .

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I just watched a video by the Daily Show where they showcase Sweden in reference to the idea of “socialism” being applied to the United States today with Government Motors (GM) formerly known as General Motors and the financial industries bailouts as of late.

In this video they cover the Stockholm, Sweden area where I used to live, along with some interviews at a SCANIA factory as well!

The portrayal of Sweden in this video was one of the many reasons that contributed to my decision to live in Sweden some years ago.

I highly suggest you watch this film and please provide your feedback in the comments below. I hope this serves you well for some good humor for the start of the week.

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