Tag Archives: U.S. Treasury

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

Posted on 03. Sep, 2009 by .



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


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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Saab Automobile Now Funded By U.S. Government’s Majority Owned “New GM”, But For How Long?

Posted on 07. Jul, 2009 by .



It once seemed impossible, but now more evidence is proving my original theory for Saab Automobile’s funding in lieu of getting any new financing.

The “new” General Motors, now owned by the United States Government, is Saab Automobile’s sole source of funding, which means, the United States Government is indirectly funding Saab Automobile at this time.

In the meantime, Saab Automobile needs to secure their new financing sources, but there has been some delay and difficulty obtaining that funding. The delays stem from the Swedish Government, who originally announced emergency loans back in December. Now however, the rules have become not less, bu more strict. The other loans from the European Investment Bank loans for future development may not be able to be obtained until September and that’s been a challenge too. However, we know that ultimately, GM indicated again back in December, that their funding will continue until the end of this year, so Saab Automobile has effectively just under 6 months to secure funding.

Do you remember those dialogues that the Swedish Minister, Maud Olofsson had with Ron Bloom at the U.S. Treasury back in March? Well I do, and recently learned that those dialogues involved an interim financing plan for Saab Automobile through the U.S. Government and the “new GM”. It seems that now, that interim plan is taking place with United States taxpayers are footing the bill for Saab Automobile’s operations in Sweden until that future funding is secured. It was one thing when the Trollblazer (Saab 9-7x) was built in Ohio, but now there are no Saab’s built in the United States.

I find it incredible that it is once again the United States Government that continues to help out others in need, and this time before the Swedish Government did for their own company. To add insult to injury, it was also the Swedish Government that originally refused to help fund Saab Automobile, citing concerns that the funds would end up in the United States. So, this begs an important question, why does the Swedish Government have a double standard allowing the United States government to fund operations in Sweden, where they won’t allow the opposite? The onus is now on the Swedish Government to take a stand against this, if they don’t, well, the writing will be on the wall and they will continue to isolate themselves from everyone.

I can remember being interviewed about the possibility of the Swedish Government owning Saab Automobile, and at one time, I thought it was a reasonable option in lieu of a proper buyer with financing, however never did I ever, think that the United States Government would be indirectly financing Saab Automobile, even if it’s for a few months or so.

While I have certainly spent my fair share of time and resources over my lifetime trying to promote the Saab Automobile marque, I doubt that the entire taxpaying population of the United States would warm up to this idea. GM has indicated that they will continue funding up until December, 2009, so, that’s it, with or without operational financing for Saab Automobile.

Here’s hoping that they find their financing source soon! The sooner emergency financing comes from the Swedish Government, Saab Automobile’s existing operation will be able to sustain itself hopefully long enough so that will be able to make it to receiving their next loan, from the European Investment Bank. Then and only then, will we be able to see Saab Automobile complete their turnaround plan, now with Koenigsegg behind the wheel.

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GM Funding Cut After July 10th, How Will This Affect Saab?

Posted on 02. Jul, 2009 by .


The Wall Street Journal & MSN report that there will be no funding for General Motors from the U.S. Treasury or elsewhere after July 10th.

The question now is, since Saab Automobile’s funding as of today, continues to come from General Motors, what will this mean for them in lieu of any more funding?

We originally heard that Saab Automobile will be funded until the end of December of GM, but now that GM is in bankruptcy court, will that change?

Official: No Funding for GM After July 10

WNEW YORK – Warning that the demise of General Motors Corp. would have a disastrous ripple effect over the entire U.S. economy, an attorney for the automaker called Wednesday for the speedy approval of GM’s plan to sell the bulk of its assets and emerge from court oversight as a new company.

GM attorney Harvey Miller said in a bankruptcy court hearing that the automaker’s only option to the sale is liquidation. He noted the Treasury Department will cut off funding for the company’s operations after July 10 if the sale is not approved by then.

No other investors have stepped forward with an alternate plan or to supply the more than $50 billion in financing the Treasury will have put into GM before all is said and done, Miller said.
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“The economics in this case don’t change if this sale doesn’t get approved, they just get worse,” Miller said, adding that the resulting liquidation would place the future of GM’s hundreds of suppliers in danger, as well as send the U.S. into an even deeper economic crisis.

Detroit-based GM’s government-backed plan for a quick exit from Chapter 11 hinges on the sale plan, which would allow the automaker to leave behind many of the costs and liabilities that have made it unprofitable.

But hundreds of parties including bondholders, unions, state officials, consumer groups and individuals have filed objections to the sale, threatening to hold up the process.

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Bo Andersson, Saab Automobile’s Purchasing Chief Resigns

Posted on 12. Jun, 2009 by .


Bo Andersson, Saab Automobile’s Purchasing Chief, employed by GM, but with Saab since 1987 has apparently resigned to “pursue other career opportunities according to Bloomberg.

Andersson was instrumental in Saab Automobile’s purchasing capabilities with suppliers earlier this past year when production stopped due to custom issues.

I am wondering why this resignation took place at this time, especially with the news as of late about a possible new buyer for Saab Automobile.

June 12 (Bloomberg) — General Motors Corp. said Bo Andersson, the automaker’s global purchasing chief, left immediately to pursue “other career opportunities.”

bo1.jpgA successor will be named soon, Detroit-based GM said today in a statement that didn’t elaborate on his plans. Andersson, 53, joined a predecessor company to GM’s Saab unit in 1987, and was GM’s group vice president for purchasing and supply chain.

Andersson is the first senior executive to leave since the biggest U.S. automaker filed for bankruptcy on June 1. He was a member of GM’s Automotive Strategy Board, which makes all crucial management decisions, and had overseen the global supply chain since 2001.

“They’re going to have some very big shoes to fill,” said John Henke Jr., president of supplier-research firm Planning Perspectives Inc. in Birmingham, Michigan. “He was a tough guy, but he knew his business and he knew what he had to do.”

Henke said Andersson was likely to return to the industry soon, because “he is too good and he loves the business.” Chief Executive Officer Fritz Henderson said Andersson made “tremendous contributions” to GM’s purchasing operations.

Andersson wasn’t available for an interview, a GM spokesman, Dan Flores, said today.

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General Motors Officially Files For Bankruptcy Today

Posted on 01. Jun, 2009 by .


General Motors officially files for bankruptcy today.

Here is the press release from the GM Board of Directors.


GM Board of Directors statement

Attributable to Kent Kresa, Chairman:

“The General Motors Board of Directors authorized the filing of a chapter 11 case with regret that this path proved necessary despite the best efforts of so many. Today marks a new beginning for General Motors. A court-supervised process and transfer of assets will enable a New GM to emerge as a stronger, healthier, more focused and nimbler company with a determination not to just survive but to excel. The Board concluded that the proposed transformation will maximize the value of the enterprise, and the return to the many stakeholders who have been involved with GM over the years.

We are appreciative of the support from the U.S. Treasury, the President’s Task Force on Autos, the UAW and its members, salaried employees and retirees, concurring bondholders, and very importantly, the American taxpayers. The Board is confident that this New GM can operate successfully in the intensely competitive U.S. market and around the world. The Board stands behind the people of GM in embracing this unique opportunity to create value and a new company that will design, engineer, build and market the best cars and trucks in world.”

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Sweden’s Maud Olofsson Indicates That Swedish Government Has a Responsibility To Ensure Saab’s Future

Posted on 15. May, 2009 by .


Maud Olofsson who visited Washington, D.C. back in late March to meet with the U.S. Treasury, has just come out to tell us about the active role the Swedish Government has to convince the buyers that they are also committed to see the new owners invest and secure Saab’s future according to Reuters.

This is a welcoming piece to hear compared to all of the dialogue with Maud Olofsson and the Swedish Government back in December, don’t you think? The future continues to look promising, now on the Swedish Government side as well as indicated below.

HELSINKI, May 14 (Reuters) – Sweden’s enterprise minister said on Thursday she had not yet seen a clear business plan from Fiat (FIA.MI) or other potential buyers of struggling Saab Automobile, owned by U.S. carmaker General Motors (GM.N).

Maud Olofsson said was too early to say if the interested parties met all the criteria for becoming a new owner.

“We have an active role from the government side to try to convince potential buyers that we are committed to see new owners who have the muscle to invest and secure Saab’s future,” Olofsson said.

When asked whether Fiat was a suitable owner, she replied that it was one.

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Swedish Government Talked With Fiat About Saab

Posted on 05. May, 2009 by .


Photo Credit: Regeringen

Reuters reports that the Swedish Government has had contact with Fiat on Saab Automobile.

I would be very interested in hearing more about the details on this dialogue with FIAT at this time, and if it affects the existing Saab Automobile reconstruction process.

I am also curious if any, Maud Olofsson’s remarks were as well. I still haven’t heard about what her dialogue with Rob Bloom at the U.S. Treasury was, when she made her visit to Washington, D.C. late March. I hope to hear back about that dialogue too! from those folks as well.

Here’s the piece from Reuters below.

Swedish govt says had contact with Fiat on Saab
Mon May 4, 2009 11:59am EDT

STOCKHOLM, May 4 (Reuters) – Sweden’s government confirmed on Monday it has had contact with Italy’s Fiat (FIA.MI) regarding General Motors’ (GM.N) struggling Swedish automaker Saab.

“We have had contact with Fiat,” said Hakan Lind, spokesman at the Ministry of Enterprise, Energy and Communications. “The meeting was about Saab.”

Lind said the government had been in contact with Fiat a couple of weeks ago, but said nothing concrete had been decided. He declined to provide any further details.

The carmaker won more time to restructure in early April when a Swedish court extended the period in which the company is protected from creditors. GM has said it plans to cut ties to Saab by the end of the year.

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Maud Olofsson In D.C. To Discuss Saab Automobile With Ron Bloom At U.S. Treasury

Posted on 31. Mar, 2009 by .


Photo Credit: Saab History

TTELA reports that Sweden’s Industry Minister Maud Olofsson, is in Washington, D.C. today to discuss Saab Automobile AB with Ron Bloom, of the U.S. Treasury Department.

I applaud Maud Olofsson for initiating this dialog with Mr. Bloom at the U.S. Treasury Department.

Published March 31, 2009 Updated March 31, 2009

Maud talking Saab in the U.S.

TROLLHÄTTAN On Monday will be Saab’s survival plan up to the evidence in Vänersborgs District Court.

And Industry Minister Maud Olofsson (C) is in Washington to talk about GM’s sale of Saab.

Industry Minister Maud Olofsson (C) is in Washington to talk about GM’s sale of Saab.

I wanted to assure them that Saab’s sales process may actually be completed, that if there are buyers who are interested, the harder this regard Obama talked about do not have the effect that it only closes down and does not consider that there is a sales process, “says Olofsson.

President Barack Obama on Monday made it clear to the American automobile industry that their actions so far are not enough. While he made clear that the automotive industry should not be allowed to go up in smoke, he was also very clear that funding by the taxpayer can not last very long.

GM was up to the end of May to develop a sustainable business plan.

Olofsson met on Tuesday, Ron Bloom, U.S. Treasury Department’s chief negotiator with the automotive industry. She stated to TT that she made it clear to Bloom that she hopes that the tightening of being had not “put obstacles in the way” for GM’s sale of Saab.

That GM was up to the end of May – is it good or bad for Saab process?

– It gives us these 60 days to continue working on a possible purchase of Saab, respond Olofsson.

For nearly six weeks, the Saab Automobile reorganization going on. A relief in the first months was to Saab lax wage in the state wage entered. County Administrative Board of Västra Götaland has SHELL OUT 217 million, including social security contributions.

Olofsson is aware of the risks in the event of a bankruptcy:

– There is a risk that wage goes to nothing and that we may pay the bill.

If reorganization is successful, it is money to be paid back.

On Monday, the creditors’ meeting held in the town hall in Vänersborg. Work on the reorganization plan has been made by a lawyer Guy Lofalk and Saab’s CEO Jan Ã…ke Jonsson.

The determination of the work may continue to have Vänersborgs District Court. Up to three judges to participate. Alderman Tisell Cecilia is one of them.

– There must be a fundamental business concept. The proposal must be serious and not unrealistic. It is important which creditors have comments, she said to TT.
If reconstruction is Saab which ends with their debts and it would then be few other ways than a bankruptcy.

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