GM To Cut Supply Dealings With Saab If Chinese Sale Goes Through
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Recent reports from Reuters lay claim that if the deal between Saab and China’s Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automobile goes through, General Motors will essentially sever all remaining ties with the Swedish automaker. This includes parts supply for cars like the Epsilon II-based Saab 9-5 and Theta-based Saab 9-4x. GM reps have already voiced their stance of disapproval on the company’s behalf just days ago.
“Although General Motors is open to the continued supply of powertrains and other components to Saab under appropriate terms and conditions, GM will not agree to the continuation of the existing technology licenses or the continued supply of 9-4X vehicles to Saab following the proposed change in ownership as it would not be in the best interests of GM shareholders,” stated GM spokesman Jim Cain.
The plan would essentially kill the current rescue plan outlined for Saab by Pang Da and Youngman. Saab chief Victor Muller noted that negotiators would have to “go back to the drawing board” on the deal, that is if the other parties are still willing to work around such an obstacle.
Ironically, we remember a time not too long ago where General Motors was in a similar state of serious vulnerability.
Source: Reuters
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Thems fightin’ words!
Good point by Manoli, GM was so desperate that went so far to even beg Ford for help, watching any automaker die is sad and if I was GM I would loan the money to Saab simply because I knew how they felt.
At the end of the day SAAB is dead in the water, it needs GM to survive and can’t merge or be purchased by other entities. It is not GMs fault the company was not sustainable after it sold it, well maybe it is; the automaker really does not have its own platform to base vehicles off of, that is a huge problem, everything links back to GM technology.
Never bet against GM pulling the dick move.
It is pathetic how GM tossed away any possible good will that folks might have for GM. Truly a good point at how they were on the brink just two years ago, and now playing the bully once again. Screw this company, will never work for them again, nor buy from them again.
WoW!
Wouldn’t you think China could retaliate by dropping Buick?
What’s with the bad blood all of a sudden?
No China could not just “drop” Buicl. It is GM’s right to decide who they supply there technology and parts to and can stop doing that for any reason. Banning GM and Buick from China would violate International Trade Agreements between US and China and probably result in a consumer backlash. Not to mention that Chinese auto makers will not be able to grow and compete globally unless having joint ventures with compaines like GM first.
I dont agree with GM’s descision but they likely wont have any consequences for choosing this “bully” route.
Lol!
This is China. While it wouldn’t be in their countries best interest, if they felt they were somehow being mistreated, insulted, or humiliated, they’ll come up with their own reason to break a trade agreement and blame it on us. While I seriously don’t expect this to happen, my question is since GM is doing business by successfully selling Buick’s to China, what gives with the sudden cold shoulder on selling Saab to the Chinese?
GM doesn’t want technology it developed (Epsilon, Theta Premium, engines, etc.) and engineering work falling into the wrong hands. The Chinese suck at making cars today… as a whole (with a few small exceptions). Giving them access to modern, state-of-the-art tech like that found in modern Saab vehicles would accelerate the Chinese auto industry, adversely affecting GM.
So how do you technically “sell” a company that has all these “secrets” that you don’t want to fall into the wrong hands?
I mean if what you say is true, does Saab have a list of “Pre-Approved” buyers of countries that they can do business with? What countries would GM sever ties with Saab over as opposed to ones they would keep?
I just find the whole thing odd. It’s like this wasn’t thought through ahead of time until a company from China made an offer.
I hope someone at GM reads this blog
They do.
Someone does 🙂
It’s simple. GM is not being a bully. They are simply protecting their investments. Why is that because GM is doing this, it’s a problem to some?
I bet if Toyota did this, everybody would be happy.
It is most likely just to protect their intellectual property, yes. The scenario just makes for bad PR.
GM has every right to cease supplying Saab, all Saab is now is a brand that’s why its being purchased for 100 million. You don’t keep ties with a company that is no longer sustainable anyway. This is basic economics folks.
The Chinese are buying the brand folks, they will liquidate the tooling the manufacturing ect. Saabs will be made in China. Example: Hoover in North Canton, Ohio the Chinese purchased the company for the brand and completely shut down the manufacturing, liquidated the tooling and and everything, canned everone except for a small product development group and warehouse.
I guess my question is:
Why not sell Saab to where no matter who buys it, GM’s secrets are kept with GM (if that’s the real reason in this whole issue). By this I mean sell it as is. GM won’t supply parts or supplies to whomever the gaining company is.
If this can’t be done, then liquidate your assets. That way, everybody is on the same page and GM isn’t compromised (but I would feel sorry for the Saab employees).
I also find it strange that if Saab is so “classified” in what they have, why hasn’t it been a popular car company for people to flock to? Would China (or the gaining company), really have a “gold mine” or wealth of information from this company to turn around and make it a hit and compete against GM (if that’s what the fear is all about)?
I mean, I see a Saab and I view it like a Volvo. Yeah, a good car… (I guess…), but I certainly wouldn’t want one.
I don’t mean to insult Saab, but it’s never been a car that I really cared for. So when GM had it’s feathers ruffled over a company from China that seems interested in buying it, I’m like… if it’s such a big deal, why hasn’t the company been successful? Did GM make such a fuss when a Chinese company looked like they might buy Hummer?
This whole thing seems like an iceberg and we’re only seeing the top 10%. I think there’s a bigger issue going on and we’re not privy in seeing it, IMHO.
Here’s a question:
Did GM offer Pontiac and Oldsmobile up for sale or did GM flatly liquidate them in order to protect their interests?
“Did GM offer Pontiac and Oldsmobile up for sale or did GM flatly liquidate them in order to protect their interests?”
Of course not. Both Olds and Pontiac at the time had long lost their autonomy and any semblance of semi-autonomy. There were no “selling features” that would even attract a buyer much less appeal to consumers.
This is what upsets me about all this. GM used Saab for years just like they are using Opel. It’s like letting a good friend fall flat on their face as you watch. “This we do not forgive…or forget.” If one was upset with GM and wanted to get back at them I could not think of a better way other than purchasing a Saab. I hope Saab or whatever is left of Saab services. I am sure most would think I have lost my mind for thinking this way. Fire At Will!
I think the elevator term used by business folks is… “nothing personal; it’s just business” 🙂
I know somebody was going to say that. I guess I am just letting my emotions get in the way. Applying my own sense of right and wrong and it just feels wrong. I know “what goes around comes around” is not scientific but I have seen it happen to many times.