Can Saab survive?

Posted by: David Welch on January 11, 2006

There is little doubt that the future of Swedish carmaker Saab AB is in question. In addition to the fact that its sales are a paltry 130,000 or so a year globally, the division loses money for parent General Motors, and has been a drag on the recovery of its European business.
Saab has been such a failure that when Jerome B. York, the top lieutenant for billionaire Kirk Kerkorian, made a speech in Detroit Jan. 10 to tell GM how to fix its problems, he suggested dumping the long-suffering division.
Right now, GM wants to keep it. GM-Europe President Carl-Peter Forster told me at the Detroit auto show this week that Saab attracts affluent buyers that other GM brands can’t reach. It doesn’t have bad baggage like Buick or Pontiac. He added that Saab’s financial results—though not good—are showing signs of improvement.
But is some improvement good enough? GM is adding some new models to Saab. But top management knows that it can’t keep pumping money into it forever. GM Vice Chairman and CFO Frederick A. “Fritz” Henderson said he just finished his plan to fix Saab. It’s now integrated into GM, and can develop models using the corporation’s worldwide engineering capabilities. So he’d like to see if the plan works before ditching it. And unlike Oldsmobile—which GM killed off over the past five years—it doesn’t overlap with other GM divisions. But he wasn’t exactly lavishing it with praise. “I’m never overly optimistic about Saab,” Henderson said. “No brand has a God-given right to exist. We have a commitment to it, but we have to get results.” York may not get his wish immediately, but Saab clearly doesn’t have forever to prove its worth.

Reader Comments

Saaby

January 13, 2006 12:14 PM

What's happened with this Swedish carmaker, is it become just another brand of GM? Where is the Saabness that makes it unique and special? Sharing platform will not be the solution to save it.

What's the problem with GM are they like too much of the re-badge work and NOT good about it. I remember back in the early 90's, the 9000 Aero was stated as cruising plane on the highway. Now, the flagship sedan is no longer flying, it's just a mediocre automobile. GM ruined the Saab.

GM killed itself because it's lack of the renovation; and created no character of their products. Now, the same application is killing Saab.

Jud

January 17, 2006 2:11 PM

I considered buying a new Saab last year. Out of the box, they're super slick and nice. I passed it over though because I heard that getting them serviced by people that know what they're doing is hard to do. I also heard that reliability can be an issue.

douglas mcintyre

March 2, 2006 7:41 AM

David Welsh's stuff is some of the best analysis of the car industry around.

Doug McIntyre

Kyle

April 13, 2007 3:45 PM

saab started out as a very reliable european car brand. over the years saab has lost its unique feel and even power. gm shouldnt kill saab. being the horrible american car company it is, pretty soon gm will end up closing its doors to japanese car buyers. gm cant do business, an it deserves to be killd by toyota,honda, nissan, subaru, etc. saab was an excellent brand with a sporty unique feel and performance and amazing reliability. but gm thought it could really take over a succsesful brand and turn it into a failure like each and every gm car, not just gm all american cars. saab should be transferred to renault or nissan to get it back in track. ford and chrysler are definit ly better american carmakers, saab would have survived if it fell into ford or chryslers hands but unfortunately it didnt.DAMN GENERAL MOTORS TO HELL. AND bAD LUCK TO THE FUTRE OF GM!

Corto

April 21, 2007 3:09 PM

Good question, to which I think the answer is no, but the next 3 years might prove me wrong. I currently own my third Saab, a 2001 9-5 which is holding out great as a very comfortable, practical, safe, relatively frugal highway cruiser with oodles of passing power. This is what made Saab a great brand: very few cars offer all of this in the same car, and believe me I've looked elsewhere. The problem, is GM is moving Saab away from this niche and further, it hasn't renewed the power plants on the existing Saabs, which are not the best in their class anymore for gas mileage. Worst, the only new engine introduced recently is a gas gusling V6 turbo and all we hear about for the future is 300-hp units. Let's not forget Saab owners are known to be well educated and rather liberal, which has to transcend into an environmentally conscious lot. The next three years are decisive because they will see the introduction of a x-over (that's all this planet needs right), a new 9-5, a next generation Astra-based small car and an Epsilon II 9-3. That's a lot of new metal for a brand that usually brings out a new car every 10 years! For sure, the 9-5 must me a smasher that can compete against the usual suspects (Audi, BMW. Merc the Japs and of course arch-rival Volvo). The small Saab could be a hit if it is sufficiently different from the Asta and Saturn brothers. But I think Saab needs to show leadership in the green car business and offer turbo-diesel hybrids and the likes to really make a impression. Sure they will sell a few gas gusling x-overs in the US but that will not save the company. Comfortable, practical, safe, fun do drive environmentally friendly cars will save Saab but I'm far from sure that is what GM has in mind for the surviving trolls. GM is not even trying to push Saab as it's global luxury brand; rather, it is spending millions$ to push Cadillac on the world market. That will only work in oil producing nations where gas and money is no object. And frankly, why get a Cadillac with all the European monsters out there. All in all, I wish Honda had bought Saab, but it's not in their culture to buy other brands. By the time my 9-5 is worn out, many many years down the road, I doubt Saab will have something to offer me, if they are still around, but I hope I am wrong.

mateo

May 28, 2007 2:58 PM

GM KILLED SAAB. look at the interior of a new saab. its all GM. what the folks at GM don't get (and this is why they're getting their cans handed to them by japanese automakers) is that buyers are NOT going to pay $40,000 for a 9-5 that includes the same GM corporate radio and climate system found in a BUICK!!! GM sucks! i own a 1999 9-3SE and really wanted to stay with SAAB, but since GM took it over and killed it, i'm done. will never buy another SAAB or ANY GM CAR.

mateo

May 28, 2007 3:00 PM

Further, look at the SAAB 9-7 SUV - its a BUICK with a SAAB badge on it. and the 9-2 is a SUBARU!!! i would say that i hope GM goes down and falls off the face of the earth, but i wouldn't want all of those autoworkers to lose their jobs!

Mr. Bell

July 1, 2007 8:30 AM

I just got my saab serviced at a GM service shop in new york city. It was the worst service I have ever received. The GM mechanic put fluid in my vehicle that’s intended for a automatic but my car is a manual.
The new GM directed designs for the SAAB sucks. Seems the only good American design can be seen in apple computers , firearms and software. How come the Swedish government did not bail saab out of trouble the way the US government does ford ? I don’t think I will ever buy another saab again.

Donald MacDONALD

July 8, 2007 8:02 AM

entirely agree. Another GM disaster. A wonder it does not rebadge a Daewoo as a SAAB. Investor AB led by the Wallenbergs knew what it was doing when it sold firstly 50% then the whole lot to GM - which proceeded to further load the best designing team of all of GM - OPEL near Frankfurt (GMA at Melbourne is probably the next best) with further problems - and instead of using the SAAB design teams to invigorate GM - made SAAB on Opel platforms. Individuality and innovation seems to have gone - sales and resale value are poor in Australia. The GMer's who negotiated this probably did the Fiat deal as well - both in and out of Fiat. Except for Holden and the cheap Daewoo, GM does not seem greatly interested in cars except for Bob Lutz whose fingerspitzengefuhl would shame many car executives a generation younger. The Alfred Pritchard Sloan system worked for generations - but no system since has worked - though at times it made huge profits. I recall earlier Fortune 500 listings - where it was ahead of Mobil, Jersey Standard (Esso). Its future - bleak. Let it break up voluntarily and move away from the unions of Michigan and Detroit. Let engineers and those with a true passion for cars rule. How many decades is it since Cadillac was regarded as a true luxury world brand? Once it and RR were on different peaks the two most highly regarded car brands - perhaps either did not entirely deserve it - in the world.

Robert

July 8, 2007 11:18 AM

It's all about the interior. GM doesn't seem to understand the finer points of NOT using cheap plastic to fit interior trim pieces. These parts are bad because they are outsourced and able to squeeze suppliers for cost in ways they cannot do with their own production.

I own a 92x and do love it, but at it's core, it is a Subaru. Dealer service? Pretty bad indeed. In fact, I am a double orphan in the sense that the car is no longer produced AND my dealer has gone out of business.

GM and all can learn something from Apple. Jobs forces varying disciplines (Cost, electrical, programming, etc.) into the same physical space during product development. It forces them to hash out issues in real time.

Anyone wanting to know what I'm referring to should rent the movie Tucker. There's a scene in the movie when certain features are being pulled from development by the cost accountants. Great movie anyway!

My thoughts on saving Saab? Well, in the short term, bring in a non 50 state compliant diesel 9-3. Sure, it won't sell in the NY and California markets, but they will get there somehow. And it will get people buzzing about Saab. BTW- you can go to Saab's UK website and custom build a Diesel 9-3 online. Pure fantasy for Yanks, but fun to dream.

I will also say, that GM right now is building the best cars they ever have. With that being said, it is clearly NOT good enough. We all hear folks talk about how good they used to be. NOT TRUE! We simply had no Toyota, Honda or other dominant player to judge them by. Just other mediocre domestic fare.

You will probably see GM kill off Buick prior to Saab. I think the strategy now for GM is to starve Buick dealers out of product and watch them die off rather than repeat another Oldsmobile buyout.

James

July 17, 2007 12:53 AM

I have a high-mileage 2002 9-5 Aero, it's my third SAAB and my second 9-5. I have enjoyed both of them. They are great cruising cars, and hold a ton. I can fold the rear seat and put my road bike inside, not to mention skis, etc., at other seasons. Very good snow cars also. I have found both the 9-5s to be quite reliable, and have had no service problems. Indeed, my current SAAB dealer has an excellent service department. (I don't think I would take this car to a Chevy dealer.) However, I doubt I'll buy another,as there has been no substantial product development on this model, or the 9-3 for that matter. There should be 4x4, gas-hybrid technology, etc., etc. GM has spent no money on the marque since 1999.

Lisa Edelman

August 2, 2007 2:38 PM

I owned a 1983 saab turbo, In 1983 and It was an excellent car...I was hit by a drunk driver and walked away from an accident with a few minor problems... I was told That it was a miracle that I survived the accident. I believe that it was the safety of the car... I bought another one... I was also very pleased with that saab. I now own a saab 1999 9 5 that i bought in 1999... This car has had so many problems... I think GM Sucks! I will never buy another saab after this one...

Lisa Edelman

August 2, 2007 2:46 PM

I owned a 1983 saab turbo, In 1983 and It was an excellent car...I was hit by a drunk driver and walked away from an accident with a few minor problems... I was told That it was a miracle that I survived the accident. I believe that it was the safety of the car... I bought another one... I was also very pleased with that saab. I now own a saab 1999 9 5 that i bought in 1999... This car has had so many problems... I think GM Sucks! I will never buy another saab after this one...

Dylan

August 15, 2007 8:31 PM

I've been looking at the 2007 Saab 9-3, but much of my online research has been negative. Does anyone have anything good to say?

J Baustian

August 25, 2007 2:46 AM

I've owned two Saabs, a 1973 99EMS and a 1984 900T. If Saab can build and sell a model with a 2-liter turbodiesel engine and manual transmission for $20k or less, I might buy one. Otherwise I'm not interested.

Spadecat

October 7, 2007 4:23 PM

The Saab SPG continues to be the benchmark of the brand. Unfortunately for Saab and its enthusiasts, the last one was made in 1991. GM's attempt to recapture this glory via its Viggen Sports Sedan has been an absolute disaster. In fact, the whole GM lineup falls far short of the Saab panache, feel and handling of its earlier models. Return the brand to Sweden and to its niche consumer base; its the only chance of brand surviving.

Bob

March 12, 2008 4:54 PM

I have owned a Sonnet, a 900 SPG, and a 2000 9-5 Aero. All were great cars. The current crop lacks nearly all of what made my cars Saabs and fun. Until GM tires of stealing the engineering innovations and trying to piece meal them into the Malibu or the Buick, Saab is doomed. Either sell the division or fund it as an independent car company. The reason that the Corvette has survived for all these decades is that it is built successfully for a particular subset of the American buyers, not the mainstream. Build the 9X concept and people will flock to the showrooms. Not all will buy the 9X (I would!) but the bleed over to the rest of the line would be palpable. How do you win the 2000 concept car of the year award and then decide not to build? I just don't get it.

saabfan

September 17, 2008 10:11 PM

own 2004 aero 2.0t, so many annoying problems that I never thought a 2004 car could have. defective sun roof motor, sometimes auto climate fan fail to work, steering volume control not working, dash info screen shows constant failure this and failure that, interior rattling, pieces of plastic mysteriously falls off, HID light went out, spend in the shop so many time I stop counting, dealer was pretty nice though, I love the the exterior look, handling, turbo, location of the key. But I think this is my last one. Great car but so far behind in reliability. If Hyundai can do for its brand, what on earth prevent Saab from doing the same?

saab93aero

December 2, 2008 8:28 PM

I don't know about all these comments, i drive a 2008 saab 9-3 aero and i love it so much that words cant even describe.

I have driven many cars, including general motors and there's absolutely nothing in this car that reminds me of any other gm, you dont have to keep thinking that it has a gm radio, it does'nt say gm on it so who cares!

It's very fun drive, awesome performance, the design is unique and 100% saab, it feels very solid in all forms, the interior is very comfortable and cosy, the ergonomics are perfect and everything is soft to the touch...

I had 2 minor issues, as soon as i brought the car home i noticed a scuff on the passenger seat and a scratch on the foglight housing, they took care of it on a dime and even lent me a brand new 9-5 for the day.

If you ever read positive comments about saab you'd be surprised how positive those comments are.I owned many audi's and vdubs before but nothing has taken my breath away like my saab does, its the most pleasurable car ive ever driven and the though of me without a saab is a scary one.

kmorton

December 12, 2008 3:33 PM

I love quirky cars - what can I say? I had a 1967 2-stroker Saab (what a fun car), a '78 EMS, and a 2001 9-3. All of my Saabs were excellent, but I did notice that the 2001 9-3 just didn't really feel like a Saab (although it was the nicest of the group).

I agree with others in that the reason GM is in such financial trouble right now is that "inovation" is a term that doesn't really exist with them. Instead the powers that be at GM just look for the best way to maximize a buck without doing any proper research into what people want or what might be best for the planet (EV-1 for example). It seems that each auto they produce is simply a clone of another. If it weren't for so many people losing jobs I wouldn't be sorry at all to see GM go under.

Three weeks ago I purchased a Smart car. The first thing I said to my salesperson when we were set to go on a test drive? "Hey the ignition is on the floor just like a Saab!" I almost bought the car without even driving it for that alone. It will be a sad day indeed if Saab does die away like so many inovative car companies in the past.

threesaabs

January 11, 2009 3:16 PM

We currently have three Saabs. I know this will incur the wrath of orthodox Saab owners, but our 2007 9-3 is the best Saab we've ever had. GM has fixed all of the electrical gremlins, and the car works flawlessly. Our 9-5 has been very troublesome, and an old 900 we have has been spotty. I say let Saab design the basic car and let GM develop the systems. A good partnership.

4-SAAB's

February 22, 2009 5:59 PM

Well, lets see. My daily driver is a 25 year old 900 that we bought new. We have a 900T, 9000T, and a 9-5 (2005) Here are my thoughts. Being 6'6" the 900's and 9000 fit well, the 9-5 not so much. The 900's and 9000 track well, have firm controllable steering and suspension. The 9-5 is floaty and tiring on a long drive. It really does not fit me well. Don't get me wrong my wife loves her 9-5, its just not the car that SAAB was meant to be. Lets redesign the interior, cloth seats anyone? I really would like a "base model" in the line up, I don't need or want all the bells, whistles, chimes and other "junk". Let the base model be a 9-3 and is should sell for less than a Toyota camry. Our first 900 was $2,500.00 LESS than a base camry. Then we can compete and SAAB will again regain its reputation, not as a GM "luxury brand" but as a good car.. Thats what we need.

belsky

March 25, 2009 7:33 PM

Dylan.. I own a 2007 9-3 Aero conv. First one we bought was a lemon.. computer issues forced us to have it towed 5 times in one month. Saab took it back and gave us a new one (with the color we originally wanted). Had an issue w/the battery loosing juice and it hosed the whole system. Replaced the battery and havent had a problem since. I like the car, its fun to drive. As long as I dont have any more issues, I'll be happy with it (b/t/w I"m 6'5" 260lbs and I fit in the damn thing! Big plus!)

William Lockyer

May 30, 2009 6:42 AM

i have an '89 Saab 9000 2.3L CDSi, it has never broken down, starts 1st time EVERYTIME!!(just passed its 17th mot without issue!!!) This is my 7th(?) Saab and ive never had a 'bad' problem with any of them, maybe this is because they're true Saabs, from sweden-not USA!! GM- give Saab back to the swedes and put proper Saab engines back in them and watch them flourish............Saab...born from jets!!

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Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

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