Tue
Jan 26 2010

What went wrong for Saab?

Hilton Holloway
In hindsight, Saab could never have prospered as the most distant member – in terms of both intellectual approach and physical distance – of the General Motors family.

It suffered two distinct decades of muddle and under-investment.



GM closes Saab


A brief history of Saab

When GM swept in and snatched 50 per cent of Saab from under Fiat’s nose in 1990, the Swedish carmaker hardly benefitted. GM’s components bin contained little worthy of a premium brand.

The 1993 900 was a brave effort with poor hand, but the split of ownership between GM and the Swedish Investor Group meant investment in new products was comically lacking in the 1990s.

While other premium brands expanded massively on the back of a mass roll-out of new products, Saab remained stuck with just four distinct models. Low volumes and unique engineering further undermined Saab’s business case.

At the beginning of the decade, GM took full ownership and Saab tried to begin a new chapter with the 2003 9-3.

However, extensive modification of the Vectra components package it was designed to be based on was costly and caused a rift with GM management that never fully healed.

GM continued to keep Saab on an investment drip feed and compounded the farce by pitching Saab into short-lived alliances with both Subaru and Fiat Auto. Selling cars into the US from Sweden was also rarely profitable for much of the last decade.

Looking back, it was probably the last-minute cancellation of the first 9-5 replacement in early 2005 that was beginning of the end under GM ownership. A co-production with Alfa Romeo, Saab designed the all-new Premium platform and finalised the 9-5 replacement.

But GM’s exit from its Fiat Auto alliance resulted in the new flagship Saab being binned at the 11th hour.

Saab never recovered. By 2009, the current 9-5 was 12 years old and the 9-3 six years old. Although the new 9-5 and 9-4X SUV are finished and ready for the showroom, the global recession and GM bankruptcy meant that Saab finally ran out of time as a GM brand.

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About Hilton Holloway

Has two product design degrees and used to design mountain bikes. Realised that cars were a lot more interesting in 1990, and has been writing about them ever since.

Comments

JeremyT December 18, 2009 4:51 PM

A very sad day for all the Saab employees and also those at Saab's dealer network.  

Also a sad day for enthusiasts.  I was brought up lusting after black 99 Turbos and the lovely 900 Turbo 16S in silver

John McToon December 18, 2009 4:57 PM

SAAB, PONTIAC, OLDSMOBILE, SATURN, VAUXHALL, OPEL.

Can anyone see the connection here?

I can.

Manufacturers of pile 'em high, sell 'em cheap, plastic, low quality, everyone's-got-one, high-depreciating, indistinct rubbish that people can no longer afford.

I feel for the workers. Their bosses have let them down. I could have told you ten years ago this was going to happen.

JackB December 18, 2009 6:45 PM

I wonder what the stillborn 2005 9-5 replacement looked like - I hope someone will let us know. Alfa 159 platform was a much more noble base for a new 9-5 than another Opel Vec... sorry, Insignia.

John McToon December 18, 2009 7:11 PM

Hilton - any chance you could change your photo to one with a smile? You look really cheesed off.

Adrian B December 18, 2009 7:40 PM

I own a SAAB 93 2.0 LPT coupe that I bought from brand new eleven years ago. It is in good condition with no rust on it and I love it. The build quality was almost on a par with its German rivals of that time.

       Sadly, I can not say the same for the latest 9-3s, the build quality is poor with cheap interior plastics and the whole standard of car is way below that of (and I hate to say it) its German rivals.

Next month I will be replacing my beloved old SAAB with either a brand new BMW 320d Efficient Dynamics

saloon or the Audi A4 2.0 TDI saloon. I can't make my mind up. This is the sort of competition that SAAB has to deal with certainly with in the last five years.

FR3000 December 18, 2009 8:54 PM

A poor end to the saga it seems - I feel for the workers at Saab that will lose their jobs; mostly on the back of greedy GM high level management that are essentially covering their own backs as a result of thier pathetic mis-management.  

It really is a final insult to add to a long list - Saab was stiffled by the ageing Dinosaur that is GM from the start,  they swooped in rubbing their greedy hands together with the typical cheap and nasty approach.  They have since slowly suffocated a car firm that had potential to be brialliant had it been given more slack.

Had support and investment been forthcoming from it's parent company who knows what Saab could have made of itself; sadly it is no more and although they weren't always the best cars out there some of them showed flashes of brilliance.

HiltonH December 18, 2009 8:58 PM

John

You are right - I do need a new photo.

But today, this is how I feel.

I was a Saab fan and got to know the people at Trollhatten quite well.

I feel so massively sorry for them. Saab was such a small operation it really was a family - and the local economy will be devastated.

As some who grew up in Leyland (Lancs) I have some idea how it is over there in Trollhatten tonight.

John McToon December 18, 2009 9:31 PM

It's too easy to make simple overview comments like most on here. When you know the people it becomes personal and real. I feel for them, especially at Christmas. Commiserations Hilton.

David D December 18, 2009 11:16 PM

David Davies

Anyone with a shred of humanity in them, and knows something about life in Trollhatten will applaud Hilton H in setting the right tone in response to this very sad news.  It will be an unmitigated disaster for so many people - wives, husbands, partners, children of those to be redundant, not to mention the poor workers themselves.  The Swedes, generalising, are very gentle,

kind and thoughtful people so they will have a more supporting community than many places in Europe.

Turning to SAAB itself - I believe they did have certain distinctives in their BRAND which appealed to certain niches in the European market.  However, I think we have to say the world car market is a savage place in which to do business, and far more than this is required to succeed.   I would suggest the following :

BREADTH and DEPTH knowledge of the GLOBAL CAR MARKET - by CONTINENTS, by NATIONS, by CAR SEGMENTS, covering CRUCIAL FACETS and TRENDS - eg Legislative requirements, Trends toward phasing out

Carbon Productive vehicles and so on and so forth.

CLEAR SPECIFICATION of the MARKET SECTORS in each of the CoNTINENTS to be addressed  by the company.

CLEAR DEFINTION of PRODUCTS to be TARGETED at those SECTORS.

DESIGN of the PRODUCTS involving the detailed design of each product AND the MANUFACTURING PROCESSES

TO BE ADOPTED.

CLOSELY related to the above has to be a consideration

of EXISTING Manufacturing Capacity and a SPECIFICATION of NEW Manufacturing Capacity which will be required.

I've said enough about that, I now want to say something about the PRODUCT RANGE.  If you look at the Premium Brand area which Saab was strugglng to address, all the successful companies have a

FAMILY of MODELS which enjoy a considerable number of commonality of parts, particularly the expensive bits like engines, gearboxes and final drive units.  This greatly REDUCES COSTS, and HITS different parts of the MARKET with the different models giving more opportunities for SALES.

Poor SAAB they effectively had 2 models built around the 9-3 and 9-5 - this did not give SAAB a chance, long term.  They were planning extra models based on GM products, the best known being the 9-4X, but all far too late.

To have any long term future in this sector of the market YOU HAVE TO DO WELL IN THE US.  Jaguar have always understood that, and have given the US market a great deal of attention and money.  They have just got the No1 spot in the highly influential  J D POWER Customer satisfaction ratings.  I can tell you that has an unbelievable effect on the American buying public.  Jaguar are on a roll there - why - outstandingly well designed and executed products which are carefully targeted and marketed.  Alongside this performance poor Saab trails out of sight.

So, in the light of these things my view is that Saab never had a chance in the longer term.  Their fate was sealed when you finally consider GM's stewardship.  

I don't suppose the story will ever be written about this Car Industry and Swedish tragedy and GM's role in it,

HOWEVER, I don't think it's the complete end of SAAB

based cars - I suspect one of the Chinese Car Companies whose appetite for Western 'Quality Car'

Brands is uinsatiable will buy up the rights to the 9-3 and old 9-5 cars.  It will be interesting to see if the rights for the as yet unlaunched new 9-5 are snapped up too.  Remember this happened to the Rover and MG Brands, being bought by 2 seperate Chinese Car Companies - which companies have subsequently merged into 1.  Their new cars ROEWE and MG are beginning to appear on the market. So perhaps we may see SAAB based cars, but they'll be designed and built in China.

What I have said is based on the fact that I have worked with European and American car manufacturers

going back many years.

Mart_J December 19, 2009 12:45 AM

There's an irony in the site that the blog is bedecked with Volvo adverts.

But all said, i hope Saab have a future. After selling off the crown jewels, they will only be left with the new 9-5, and they need a smaller car to drive sales. I always though a golf sized [9-1] would be good, as they have a strong image and design direction.

Mart_J December 19, 2009 12:47 AM

Quote Autocar: By 2009, the current 9-5 was 12 years old

The 9-5 can trace it's roots back to the '86 Fiat Croma... that's more than 12 years ago.

HiltonH December 19, 2009 2:45 AM

mart

The 9-5 was very loosely (only 35 percent by content) based on the 1995 Opel Vectra.

The 1983 9000 was a sister car to the Fiat Croma and Alfa 164.

caddy06 December 19, 2009 2:25 PM

However many nice things were said about SAAB most people only want to buy BAM (BMW, Audi, Mercedes) in Europe, even Lexus with Toyota money and superb quality hardly out-sold SAAB.  So GM made a rational decision and the Swedish government were not prepared to help either.

One question that remains is is there any way a premium sector player can survive against the BAM bandwagon? The only way I can see is to be a pure Design, brand and assembly house where you take a body in white less external panels, suspension and interior from a big supplier like Ford, Toyota or even GM and wrap the skin, do  the suspension and do a trademark interior along with a non mainstream marketing strategy.

I think if you  bought in the body electrics and basic powertrain you could avoid most of the cost and with a Magna style asembly ( or even using Magna) you MIGHT get to 100k units globally and break even with BAM level pricing. I think you would even need to outsource the spares distribution as well so you just design and marketing.

It is probably too late now for SAAB to do this approach but it is the only way I can think of for any choice to exist beyond BAM in the Euorpean premium sector.

AndyRAC December 19, 2009 5:14 PM

Simple, GM. End of....

james26 December 19, 2009 7:22 PM

Very sad, hope somone buys the name. Went past a 9-3 wagon today (58 reg) and you could help but think it looks a bit naff inside and out, esp around back lights. Saab's of old where classy and a bit lefty something of late they lost. In the last year they have been doing a Rover tarting last years (ok many) models.

I really don't know why Saab did't you produce a coupe, a small car, surley some of the small cars from Vauxhall/Opal under a Saab badge?

Always I think people who did't want german car found a Volvo fine and never rightly went for the 9-5 or 9-3, that is all GM fault.

James.      

Mr_H December 20, 2009 11:43 AM

A very sad day for the automotive world. Having been a longtime admirer of SAAB, and their 'left-field' design and engineering values, I grew up lusting after a 900 T16S - I loved the quirkiness - a million miles away from the boring grey gruel most people chose to drive around in - this car gave off all the signs of being a true piece of automotive engineering, rather than another parts-bin special. I still have an old TG on video, with Quentin Wilson explaining how bullet-proof the cars were, and that they were capable of running well beyond 250,000 miles.

Fast forward a few years, and I have now had 2 SAABS, a 9-3 Sportwagon and an '02 9-3 Hatch. I still love the quirkiness, and still love the looks, but oh dear, they just don't live up to the old image. The Sportwagon was horrible to drive, the controls numb, and the interior, although beautifully designed, was plasticky and badly made. The 9-3, which I currently own, has been the most unreliable car I have ever owned (and I have had 2 Italian, 1 BL car, and 2 French cars), recently costing me over £3k in repairs to the weakest part of it - the GM sourced diesel engine.

The SAAB story is the classic one, repeated over here at Rover, of cars with a once peerless image, imaginative and robust engineering (and remember, the SAAB Turbo engine was based on a Triumph design), let down by short-sighted new owners, wanting to cash in on a well deserved image, with half-baked cars representing only the image of the brand, and not the core values.

Everyone may mock BMW but they have never diluted their core brand values, or engineering excellence to cynically exploit their hard won reputation or image. That's why so many people lust after one.

Having been to Sweden, and worked with a number of Swedish people, I know that the loss of one of their icons of Swedish rationalism, left-field thinking and practicality will hit hard, as will of course, the loss of all of those SAAB worker's jobs. The Swedes are justifiably very proud of their strong design and engineering heritage.

I hope that SAAB can exist again, but only as a Swedish car maker, not a badge on another Chinese re-hash (Roewe anyone? though not....)

Lee23404 December 20, 2009 4:45 PM

As others have said the blame for this falls on GM's doorstep.

About 3 years ago when my company Vectra was due for replacement I had the choice of another Vectra or I could pay about £150 a month more for the equivalent 9-3. I headed off to the Saab dealer and came away disappointed. Yes the 9-3 looked better and had a better badge but that's where the advantages ended. it was no better built, was no better to drive and was less family friendly. After years of wanting a Saab I left that dealership disappointed but £150 a month better off.

What had things come to that a Saab was no better than a vectra?

Ask GM...

noluddite December 21, 2009 5:36 AM

Well said FR3000.

RobotBoogie December 21, 2009 11:01 AM

It's all about the product. The last really convincing new Saab was the 1978 900. Everything since then has been warmed over partnership efforts with other manufacturers (Fiat, GM) where a set of left field styling cues and operational quirks have hid some pretty ordinary and often very dated engineering. Sad day for the company's workers but in a way it's a surprise that it has taken this long for Saab to reach this point.

NobbyUK December 21, 2009 11:52 AM

We all know that there are too many players trying to push too much metal in the European car supermarket, especially as Chinese and Indian brands head this way, but it seems in Saab's case that only the good die young.

It's rare to find such genuine affection for a manufacturer, especially among journos, but one can't help imagining what could have been with a wider product range (9-1, 9-3, 9-5 & one or two niche cross-overs) allied to Saab's positioning and quirkiness - a real premium alternative to the Germans?

I hope the Saab networks around the world get a final chance of a future without GM - Happy New Year, Trollhatten.

jerry99 December 21, 2009 12:46 PM

Whilst GM may be partly to balme the writing has been on the wall for a long time.

If Renault gave up with the Safrane after the early success of the R30 and R25, Citroen rarely made a success of the CX and later models whilst Fiat never succeeded with big Alfas and Lancias why did Saab expect to keep going with the 900 and 9000 formula?

Volvo saw the light just in time, helped by Ford, but for some reason Saab ignored all this whilst Vectras and Mondeos became bigger and offered almost all a Saab did.

merson December 21, 2009 2:46 PM

Its all a bit too easy to blame GM, to my knowledge SAAB had been losing money since 1984/5 and were in a terrible financial condition when GM got involved.

The malaise with the manufacturer was just part of the global challenge of competing with the Japanese and German companies who made exceptionally good cars.

Massive expansion through company purchase has worked very well for VW and although it is a terrible shame for SAAB that it didn't work with them, the people who ran SAAB got a very good deal and GM had no desire for the deal to fail and (financially at least) lost the most from the deal.

SAAB-Scania sold the automotive part of the business to GM and many of those executives kept a presence within the wholly owned subsidiary or on the GM board.

As with so many other manufacturers the economies of scale and globalization made it very hard to compete in producing automobiles at profitable prices. This has meant that for all of us, cars are very, very cheap.

Today, cars are very very cheap.

james26 December 21, 2009 8:13 PM

I went in Saab 9000 when i was young and ever since that point a Saab was going to be a car for me.

Fast forward 20 years: then going in to a Saab dealer and coming way thinking there now a rubbish - made the French brands seem really good even the Vauxhall offing seemed as good or dare say better. I bought a Honda then a VW then a Skoda by the way.

I did find a old 9000 for sale and went to car dealer to have a look at one, yes they where as good but GM killed them by there poor 2 model offerings and cost cutting ways. Only hope Spyker pull something off

James.    

noluddite December 22, 2009 8:14 AM

Not sure i agree with the 'world leaders in engine technology' statement. From memory, the 96 was fitted with a Ford V4, and the 99 had a Triumph Dolomite engine. This remained the mainstay for many years. Saab were, however, pioneers in turbocharging. And before you think i'm kknocking Saab, let me say that I loved their pre-GM cars, especially the 9000.

saaby December 23, 2009 11:06 AM

Hilton, you are the Saab champion in UK motoring press, please do your bit to support Saab to strive for independence over closure.  GM is still in negotiations with Spyker and another consortium so it's not over yet.  There is a strongly held view in the Saab community that GM wish to close Saab regardless due to corporate political pressure - this can be exposing factual criticism of their actions and a groundswell of opinion in favour of giving the underdog a chance of independent life.  If Saab can realise a value to GM (and the US taxpayer who own GM) now (and there is a significant value being offered), why would they not sell?   Saab should live or die buy its business plan which has been approved by KPMG, EIB, Deutche Bank and Swedish Government - yet GM want to close.  Let them give Saab the chance to live or die by their OWN actions, not a global corporate 'tidying up' decision.  Please highlight the ongoing nature of the negotiations and help Saab survive - we're relying on you to keep getting the true news out there and thanks for work to date.

Saabsunited.com as ever has the latest info.

Thank-you.

Eric van Spelde January 28, 2010 9:25 AM

Noluddite: by 1972, that 'Triumph' engine had morphed into the B20 that had virtually nothing in common with the original Ricardo design bar being a SOHC slant four. 1976 saw the first wastegated turbo application in the 99 Turbo, and in 1980 this was augmented with APC -the first knock-sensor based (boost) control system worldwide. Three years later, Saab put a 16 valve DOHC head on the engine and thus created the first combination of turbo and 4 valves per cylinder (with an intercooler and 'hotwire' electronic fuel injection to boot) - creating what now is the 'de facto' standard performance engine for just about anything bar exotics. Ion-sensing knock control? Saab had it as early as 1988, and made it an integral part of their Trionic engine management systems in 1993.

Let's not forget the groundbreaking Saab Variable Compression concept of 1997, either.

Saab (historically) a leader in engine development? You'd better believe it.

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