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Saab History On The General Motors Business Plan

Posted on 18. Feb, 2009 by .

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The “public version” of the General Motors Business Plan submitted to the U.S. Treasury today at 6:00pm has been posted on GM’s website.

You can download this 117-page PDF document titled “”GM 2009 – 2014 Restructuring Plan”, clearly a summarized version in comparison to the 900+ page official document.

Please click here to download directly at this link.

One thing is clear, GM states that basically on March 31st, 2009, Saab Automobile AB has effectively 9-months to become a completely independent business entity before January 1st, 2010.

It basically looks like Saab Automobile AB needs to secure the loans, both the $400 Million Dollars from the Swedish Government in addition to the $600 Million Dollars that was recently applied for with the European Investment Bank before March 31st.

I guess that at this point, the Swedish Government should rest assured that their money should not be going to General Motors in Detroit, but those loans need to be specifically applied only to Saab Automobile AB in their home country and I hope that both Saab & Sweden ensure that they do.

For the next 9-months following these loans, Saab Automobile AB would to secure a buyer somewhere between March 31st and January 1st, 2010.

Here are the areas that I captured from this “public” version of the GM Business Plan for your reference, but again please feel free to download it yourself and search for “Saab” and you’ll see what I have below.

Saab is to be an independent business entity Jan. 1, 2010, which is 9 months from March 31st, 2009

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4.1 Competitive Product Mix and Cost Structure—General Motors Restructuring Plan calls for rationalizing vehicle sales and marketing operations in the United States through reducing brands, nameplates and retail outlets. This will help to concentrate product development resources on ―fewer, better‖ entries, and generate more competitive dealer
economics.

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Brands and Channels—The Company has committed to focus its resources primarily on its core brands: Chevrolet, Cadillac, Buick and GMC. Of the remaining brands, Pontiac—which is part of the Buick-Pontiac-GMC retail channel—will be a highly focused niche brand. Hummer and Saab, stand-alone retail channels and brands, are subject to ‗strategic reviews‘, including their potential sale. A Hummer sale or phase out decision will be made in Q1 2009, with final resolution expected for both no later than
2010. Saturn will remain in operation through the end of the planned lifecycle for all Saturn products (2010-2011). In the interim, should Saturn retailers as a group or other
investors present a plan that would allow a spin off or sale of Saturn Distribution Corporation (SDC), GM would be open to any such possibility. If a spin off or sale does
not occur, it is GM‘s intention to phase out the Saturn brand at the end of the current product lifecycle.

Provisions have been made in the pro-forma financial statements for all brand-related restructuring costs related to an assumed phase-out of the Saturn, Saab and Hummer
retail channels and brands, should a sale or spin-off prove unachievable.
,
The impact of moving from six to three retail channels, and eight to four core brands will not only result
in structural costs savings in areas such as marketing and human resources, but will enable GM to achieve greater focus on core brands and channels. The Company believes
the ongoing effect of fewer brands to be limited in terms of unit sales, while improving profitability, as over 90% of the Company‘s U.S. aggregate contribution margin (revenue
less variable cost) is derived from core brands.

U.S. Market Share Assumptions

4. Chevy, Cadillac and Buick gain share due to future product plan as well as reduced competition from HUMMER, Saab, Saturn and Pontiac

Saturn, HUMMER and Saab have generated an average annual EBIT loss of $1.1 billion (E2)

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