Saab loses $300 million in 2005, report says

[Northstar]

Reuters

Automotive News / January 17, 2006 - 9:00 am

FRANKFURT -- General Motors' premium brand Saab lost more than $300 million in 2005, a German newspaper reported on Tuesday, heaping pressure on GM given calls from investor Tracinda to sell Saab and other loss-making units.

The Handelsblatt daily cited company sources saying Saab's loss widened from nearly $200 million in 2004, but a GM Europe spokesman said the company does not break out earnings for individual brands and would not comment further on earnings before its quarterly report on Jan. 26.

The spokesman said Saab had its best ever fourth-quarter sales at the close of last year and its highest annual sales in Europe in 2005.

"Having its best year ever from a volume standpoint, having the 9-3 Sport Combi for a full year, having the new 9-5 and the 20th anniversary of convertibles for the 9-3 in 2006 should bode well for the Saab brand and we expect that we will continue to gain momentum," the spokesman said.

"There is no question that the company has got a commitment to Saab," he added, citing its progress in cutting costs and in launching a new model offensive at the brand.

GM Europe President Carl-Peter Forster said at the Detroit auto show last week that if orders continued at the pace of late last year, Saab could boost volume by between 10,000 and 15,000 units. It sold 82,100 in Europe plus more than 38,000 in the United States in 2005.

"I think (for) Saab there is potential for a step up in the cycle of performance," Forster said.

GM Europe is in the process of cutting its workforce by around one fifth in a drive to restore profits. It last made an annual profit in Europe in 1999.

In a separate interview, Forster said he wants productivity at core brand Opel to rise by 3-5 percent a year.

"That means 3 to 5 percent more cars with the same number of workers or 3 to 5 percent fewer workers for the same car production," he told German magazine Auto Motor und Sport.

When its main Ruesselsheim plant in Germany is properly utilized, it will be able to turn out cars in 19-20 hours versus 26 hours now for an Opel Vectra, he said.

By comparison, the magazine added, Volkswagen needs around 50 hours to make a Golf and 54 hours to build a Passat in Germany, while its premium arm Audi takes just under 40 hours to make an A4 model.

http://www.autonews.com/apps/pbcs.dll/arti...ct=newsletter06

[Guest Josh]

General Motors' premium brand Saab lost more than $300 million in 2005, a German newspaper reported on Tuesday, heaping pressure on GM given calls from investor Tracinda to sell Saab and other loss-making units.

When GM can hardly give its American units suffecient vehicles to be successful in North America why continue to invest and focus on SAAB, a vehicle that sells just over 32,000 vehicles per year in the United States?

That's pitiful. Maybe we should invite FIAT back into the fold too.

[regfootball]

When GM can hardly give its American units suffecient vehicles to be successful in North America why continue to invest and focus on SAAB, a vehicle that sells just over 32,000 vehicles per year in the United States?

That's pitiful. Maybe we should invite FIAT back into the fold too.

for some folks, they don't like Chevy's and stuff and like the euro styled Saab. GM's fault with all its divisions is starving them of new product. if Saab had one all new (not rebadged) model out every year at a minimum, they would have no issues.

As usual, the core issues with GM boil down to product, and often times it seems as though their product and content decisions are based upon them being handcuffed from a financial standpoint...for continuing reasons.

Cars like the 9-3 are a great alternative to those less than reliable VW's and bland Acuras.

If GM cut saab, they would lose all that sales volume, they would not gain any of that back through any of the other North American brands. All the Saab buyers would defect to Volvo, VW, Audi.

it would not help them stem losses in their other divisions.

Edited January 18, 2006 by regfootball

[Guest Josh]

They would not lose it if they had Oldsmobile as an alternative which is what it was meant to be but was never given the chance to be. There's no reason why GM has to keep shouldering a $300 Million dollar losing company on board.

There doing nothing more than using valuable resources. Look at it like this if you want to keep them under GM's umbrella. Drop them from North America, focus on your core brands. They bring in 32k sales a YEAR and that was on a high note from the company. Surely you can make those sales up through exciting Pontiac product (if you don't believe...lets take a spin in the Solstice) and Buick product that meets the target market.

SAAB is a weak, limp brand in North America. Worldwide it may have some clout, but in China Buick reigns supreme. I guess I'm just confused as to why General Motors needs SAAB.

[FUTURE_OF_GM]

Ok... We can worry about the 300 million after we cure the 4 BILLION at GMNA.

[Palmer]

They would not lose it if they had Oldsmobile as an alternative which is what it was meant to be but was never given the chance to be.

Are you kidding?

Oh yeah, the saab drivers would have fallen right into those SWEET Achievas. Or the Aleros.

It sold 82,100 in Europe

Hmm.

Oh, wait. this sales reigon is the only one that matters.

Edited January 18, 2006 by Palmer

[zoomtm]

Are you kidding?

Oh yeah, the saab drivers would have fallen right into those SWEET Achievas. Or the Aleros.

Hmm.

Oh, wait. this country is the only one that matters.

FYI Europe is not a country

Joshie Poo is always right

Edited January 18, 2006 by zoomtm

[Palmer]

Hows that? I changed it to "sales region"

What about the "oldsmobile option" that was mentioned before?

Come on now.

Edited January 18, 2006 by Palmer

[regfootball]

Are you kidding?

Oh yeah, the saab drivers would have fallen right into those SWEET Achievas. Or the Aleros.

Hmm.

Oh, wait. this sales reigon is the only one that matters.

beat me to it.

those liberal college yuppies would not 'drive your father's oldsmobile' no matter how hard they reworked the cars.

GM is mostly irrelevant to Euro intenders as it is. take away Saab and they lost the very last bit of any cred as a world car company that GM has in the US public opinion right now.

Saab caters to the style and fashion crowd. No domestic brand has or ever will have a chance of doing that, except maybe cadillac, and caddies are too expensive. the 9-2x, 9-7x, and 9-5 redux are simply life support to keep the brand stable until GM again decides to start funding products again.

Buick and Pontiac would need serious makeovers to even approach the radar of these buyers. it would mean, among all things, ditching the 'cost effetive' pushrod v6's...which any euro intender would thumb its nose at big time.

Edited January 18, 2006 by regfootball

[razoredge]

OK, while I know its makes no sence from me to stand up for Saab, I will. Saab has always been around and has had a certain amount of clout, its also....I would assume is an important part of a particular country and same as I hate the multinationals for destroying my country, my way of life, I would not wish it on others. Anyone ever stop to wonder if Saab wasnt a capitol off loading pit..much like most any smaller business's bought out by the "big boys" have been ? We have seen it for decades......buy it, run it into the ground, spin the accounting......pocket the cash.......fold it when your done.

Then once again how quickly we forget how GM's accounting tactics have been used to spin and distract the reality of who, what, where, when and how the money is evaporating. For instance wasnt alot of money just spent on some European Cadillac from Saab ? I mean I ran my own business for 20 years and let me tell you I knew how to unload the money in Oct,Nov & Dec rather than give it to Sammy.

Still you have to wonder how they loose 300 million with ???if Im reading this correctly......120,100 units what are they building over there, hand built one off cars and selling them for $35,000. Someone else do that math for me but isnt that like alot of money per car to build ? HELLO ! somebodys lyin here or somebodys spinning things to make something look worse than it is..like ignoring the work/development just put into the turbo ecotec ? Was that billed under Saab but yet not for sale or showing profits ?

So while we're all worried about 300 mill @ Saab

and 4 bill @ GMNA

WTF is the tally on this little saturin folly ? Hmm? where is it ?......shush... dont bring that up.....watsamatterU ? shush...

Is the 4 billion loss at GM shown on this years "losses" the money that went to FIAT ? Is it or isnt it ? Ive asked this question many times and all the "insiders" here have yet to answer.

and just WTF did the adminstration at GM get paid while all these losses were pileing up ? shush..........would you quit it.......you gonna throw us in....shush

Edited January 18, 2006 by razoredge

[sciguy_0504]

If it was up to me I'd get rid of it, sell it back to the Swedes. At the least, I'd focus Saab to be competitive in Europe and stop stelling them in the U.S.

[Northstar]

If it was up to me I'd get rid of it, sell it back to the Swedes.  At the least, I'd focus Saab to be competitive in Europe and stop stelling them in the U.S.

Agreed. Keep it Europe-only or sell it.

Who gives a $h! if GM would lose 32k sales a year. They could easily sell 10 times that amount in sales by using the money to make a kickass Malibu.

[SoCalCTS]

How much of the $300 million was created by the decision to leave Trollhatten? I bet a lot of this "loss" was a one time accounting loss as a direct result of shifting production out of Sweden.

[VenSeattle]

How much of the $300 million was created by the decision to leave Trollhatten? I bet a lot of this "loss" was a one time accounting loss as a direct result of shifting production out of Sweden.

The shift in production is for Epsilon II. I believe the Cadillac BLS & current SAAB 9-3 are still built in Trollhattan.

Even if the production shift is the cause for 2005, then try explaining the $200 million they lost in 2004. Half a Billion in losses for the passed two years alone.

[CSpec]

The shift in production is for Epsilon II. I believe the Cadillac BLS & current SAAB 9-3 are still built in Trollhattan.

Even if the production shift is the cause for 2005, then try explaining the $200 million they lost in 2004. Half a Billion in losses for the passed two years alone.

I think he means moving SAAB HQ to the rest of GM Europe in Zurich.

[Imaj]

they should dump Saab no matter how much sales numbers they bring into GM!!

[Sixty8panther]

Wonder how many millions Olds lost in 1998, 1999 & 2000.

[Imaj]

Wonder how many millions Olds lost in 1998, 1999 & 2000.

I dunno if they lost any money, but Oldsmobile was a "damaged brand". Ironic, isn't it

[MyerShift]

GM should only sell SAAB (and hopefully back to the Swedes) if it can make a profit over what it cost for the entire purchase. Selling at a loss could be worse than losing $300 million for this particular year. Like DaimlerChrysler selling off the rest of Mitsubishi. They sold it for less than it was purchased for. If Mitsubishi (or Fiat or Isuzu) aren't highly damaged brands, I don't know what would be.

[balthazar]

In 2000 when Olds' discontinuation was announced, Zarella stated Olds had been "losing money for years"... but who really knows if that was truth or spin.

saab is a lost cause and canNOT be sold for a bottom line profit; not even remotely close. Without a doubt the entire saab experiment has been a failure and has only robbed from the core divisions' product.

Edited January 19, 2006 by balthazar

[daves87rs]

SAAB is a weak, limp brand in North America. Worldwide it may have some clout, but in China Buick reigns supreme. I guess I'm just confused as to why General Motors needs SAAB.

Enough said. The bottom line is the only thing that matters.....

[daves87rs]

beat me to it.

those liberal college yuppies would not 'drive your father's oldsmobile' no matter how hard they reworked the cars.

GM is mostly irrelevant to Euro intenders as it is. take away Saab and they lost the very last bit of any cred as a world car company that GM has in the US public opinion right now.

Saab caters to the style and fashion crowd.  No domestic brand has or ever will have a chance of doing that, except maybe cadillac, and caddies are too expensive.  the 9-2x, 9-7x, and 9-5 redux are simply life support to keep the brand stable until GM again decides to start funding products again.

Buick and Pontiac would need serious makeovers to even approach the radar of these buyers. it would mean, among all things, ditching the 'cost effetive' pushrod v6's...which any euro intender would thumb its nose at big time.

True, BUT GM needs to worry less about fashion and style, and more about the product......now.

[balthazar]

>>"those liberal college yuppies would not 'drive your father's oldsmobile' no matter how hard they reworked the cars."<<

Average age of saab owners is undoubtedly in the late 40s to 50s: 'college yuppies' is an irrelevant statistic. The reference to Oldsmobile invites the counterpoint- how many Olds drivers would have any interest in driving a saab?

>>"...take away Saab and they lost the very last bit of any cred as a world car company that GM has in the US public opinion right now."<<

'US-public opinion of General Motor's world cred'??? How do you come up with this stuff? Where did you see study results of this?

saab would not lend 'world cred' to any international manufacturer- it's been on the downside of popular opinion for 15 years. A forgotten love child of the '80s.

>>"Saab caters to the style and fashion crowd. No domestic brand has or ever will have a chance of doing that, except maybe cadillac, and caddies are too expensive."<<

saab caters to a handful of loyalists who treasure the archaic over all else. Fledgling interest in advancement has crippled saab's image worldwide and it's product delivers neither fashion or style. #1 adjective used by far in the last 20 years: "quirky". Lots of real meaningful 'cred' there.

>>"Buick and Pontiac would need serious makeovers to even approach the radar of these buyers."<<

There aren't enough to bother going after.

>>"it would mean, among all things, ditching the 'cost effetive' pushrod v6's...which any euro intender would thumb its nose at big time.

"<<

I suppose a primarily FWD lineup is readily embraced in the entry-lux segment in europe, eh? Damnit- when will mercedes & bmw get on the bandwagon here?

There is a LOT of animosity and anger toward saab by enthusiasts because of the leeching and misdirection they've effected. Money wasted, lost time, no return. As much as taking huge loss would anger them even more, cut saab loose; it's heyday is long over and the venture will never pay off.

[TurboRush]

>>"those liberal college yuppies would not 'drive your father's oldsmobile' no matter how hard they reworked the cars."<<

Average age of saab owners is undoubtedly in the late 40s to 50s: 'college yuppies' is an irrelevant statistic. The reference to Oldsmobile invites the counterpoint- how many Olds drivers would have any interest in driving a saab?

>>"...take away Saab and they lost the very last bit of any cred as a world car company that GM has in the US public opinion right now."<<

'US-public opinion of General Motor's world cred'??? How do you come up with this stuff? Where did you see study results of this?

saab would not lend 'world cred' to any international manufacturer- it's been on the downside of popular opinion for 15 years. A forgotten love child of the '80s.

>>"Saab caters to the style and fashion crowd.  No domestic brand has or ever will have a chance of doing that, except maybe cadillac, and caddies are too expensive."<<

saab caters to a handful of loyalists who treasure the archaic over all else. Fledgling interest in advancement has crippled saab's image worldwide and it's product delivers neither fashion or style. #1 adjective used by far in the last 20 years: "quirky". Lots of real meaningful 'cred' there.

>>"Buick and Pontiac would need serious makeovers to even approach the radar of these buyers."<<

There aren't enough to bother going after.

>>"it would mean, among all things, ditching the 'cost effetive' pushrod v6's...which any euro intender would thumb its nose at big time.

"<<

I suppose a primarily FWD lineup is readily embraced in the entry-lux segment in europe, eh? Damnit- when will mercedes & bmw get on the bandwagon here?

There is a LOT of animosity and anger toward saab by enthusiasts because of the leeching and misdirection they've effected. Money wasted, lost time, no return. As much as taking huge loss would anger them even more, cut saab loose; it's heyday is long over and the venture will never pay off.

Daves87RS up there said that the bottom line is the only thing that matters.... well this is what I see the bottom line being:

They bought out a manufacturer of cars (Saab) and didn't have the right ammount of cash to infuse into it to keep the brand going in a positive motion

Recently, they were loosing money with olds..... now a variety of their segments are starting to loose money......

So what does this say?

We could see what GM was getting in to when 2 brands were not making it on top..... (due to lack of good product by proper budgets)

and now the rest is starting to go on a downwards slide as well........ regardless of if it's Saab (a brand that most of you probably don't see or value) or Oldsmobile.. . the fact is that it's not ONLY happening to Saab anymore. The lack of good decisions with Saab is now showing through other divisions as well.

It is no longer a Saab only problem but rather a GM problem.

Bash saab all you want, say that they are sub-par, uncompetitive, underpowered, understyled, no high volume seller... whatever.

But when GM cuts its ties with Saab and Saab has no buyers to keep making Saab cars, GM will keep sailing its Complacent boat of ignorant bull-Sh*t i the no-good decision making direction and eventualy sink if it doesnt change the way it does its buisness.

Like others have said, 300 million is peanuts compared to the 4 billon overall.....

When the dust setles, I'll be driving my last production model 9-3 SS turbo, getting 40 MPG with plenty of acceleration, beating most in my class on top end acceleration and warming my but in dark pewter leather seats with seat warmers on, while enjoying the money still sitting in my bank account from the savings I have over buying an infiniti or BMW.....probably looking at a 1000$ ECU upgrade to add an easy 30-40 bhp and a healthy increase in torque....

my 2 cents...

Edit: oh, and the reason why we are all noticing biased oppinions against GM in recent car reviews and those sarcastic, un-deserved comments about the camaro concept by outside magazines and others is because people are afraid of the unknown and tend to get spooked by a product or manufacturer when they get a sense of insecurity around them....... It's only showed up in recent years (consistent with GM's downfalls) with GM bashing in reviews and we all know its unfair.....

Us saab fans have felt the same way about Saab reviews and comparisons for years before it started happening with GM...... we are all in the same boat of suffering. I know you guys's pain, can't you recognize the similarity with the pain Saab and Saab fans have been enduring since the early 90's?

Like I said above, Saab may very well be on its way to be put on the choping block and out all together... but the rest of GM seems to be flowing in the same direction as Saab is regardless of if they take Saab out of the game....

Edited January 19, 2006 by TurboRush

[FUTURE_OF_GM]

Oldsmobile aside (I'm still pissed about that one)

I think GM should keep and expand Saab... It still has potential but the problem is; GM has. like Saturn or even Buick in recent years never been serious about giving it decent product.

What GM needs to do is get a comprehensive plan for Saab and Saturn and work hard at cracking the Euro mindset. Both have big growth potential IMO, but Saab will have to either SLOWLY turn or wait it's turn until the core divisions are fixed. And that's exactly what it's doing, just like Hummer. It's getting the scraps and band aids while Saturn, Chevrolet and Pontiac/Buick are fully funded. Remember volume=money and neither Saab nor Hummer=volume

[Robert Hall]

The biggest mistake GM made with the current 9-3, IMHO, is the lack of a hatchback..a Saab with a trunk is just another sedan....Saabs need hatchbacks.

[drew770]

Saab is 1 kick a$$ vehicle away from being revelent again.

Because Saab always and will always be low volume they need 1 really outstanding vehicle to bring in buyers that will other wise go to Volvo or VW.

None of the current Saabs are crapola so if GM would deliver just 1 world class, stylish, quirky (Swedish) design mid volume Saab then the loyal fans would return to the dealer and maybe look at what else if offered by Saab.

IMHO, Saab is a great Worldwide brand but a niche player here in the states. GM should focus on improving it's European lineup and the rest will follow.

Saab can go places that Cadillac would not be welcomed especially since Americans and our corporate brands are currently disliked around the world.

Saab has to be designed to take advantage of European and Asian tastes and not American. Whether it is designing for diesels, hatchbacks/fastbacks or wagons the focus should be on markets outside of North American because that is Saabs strenths.

[buyacargetacheck]

Sell Saab to FIAT!

Seriously, does GM fashion itself as the "welfare" car company? Why does it feel the need to take in all the hard cases around the world? GM doesn't have the $$$ to do this anymore.

Get rid of it now. It'll never pay off. Sink the money into Chevy or Cadillac instead.

[SingleStylish]

Mark my words... as long as Ford owns Volvo, GM will own Saab. My guess is that you will see future product decisions aimed directly at Volvo, VW, and Acura. All of those brands are niche brands and occupy a small but very profitable area of the car market. None of the cars that these companies produce are bargains or even close to mass market however, they sell to a different buyer. GM at this point only has Saturn to fill that niche and they have a long way to go. Again, Saab could be there faster if they just got some serious product. Does anyone really think Saab would have lost money if they had a competent 9-5 replacement the year after the 9-3 and then the year after a REAL distinctive XC90 competitor instead of a Bravada remade??? For real... GM has bigger problems than Saab and some well spent money could probably help GM out!

[SingleStylish]

And BTW since we are talking of money losing Euro brands... what of Opel do you guys say??? Should have sold them too??? They only returned to profitability the first quarter of this year!

[buyacargetacheck]

And BTW since we are talking of money losing Euro brands... what of Opel do you guys say??? Should have sold them too??? They only returned to profitability the first quarter of this year!

The difference is that Opel is essentially GM Europe. For GM to sell Opel would mean giving up the European car market entirely. Saab is too small and requires too much in resources just to capture a few VW intenders (who don't consider Saab anyway).

By the way, even Saab-loyalists don't really think of today's Saabs as real Saabs. The last real Saab (one without Opel genes) was the 9000 and even that one was codeveloped with FIAT.

Yes, that's it. GM should sell or give away the Trollhattan plant and the brand to FIAT. The car-equivalent to Montezuma's revenge!

[97regalGS]

since when did GM start reporting profit/loss for each individual brand?

[ZL-1]

since when did GM start reporting profit/loss for each individual brand?

If they had a source at GM Europe's headquarters in Zürich, the figure could be quite credible. I'm pretty sure that while GM doesn't report those numbers to the outside, the info is prepared and reported inside the company.

[carman21]

I think that Saab & Opel should remain out of NA or get out until they become respectable brands like VW or Audi. Opel is not on par with VW and neither is Saab with Audi. Saab has even fallen behind its swedish rival Volvo. So, GM should rebuild its damaged Eurobrands before exporting them back to the US.

Meanwhile, GM should concentrate on rebuilding Chevy, Pontiac, Saturn, Buick, & Cadillac. The Autoworld revolves around two poles Detroit and Japan. Europe has lost relevence. GM Europe is still important but, GM Daewoo is the future. GM Daewoo is responsible for a sales boom in Asia for GM. Globally 9 out of ten GM autos are soon going to be GM Daewoo in Origin in rapidly growing markets like China or India. The sooner GM looks to Asia the better. After all Toyota the biggest threat to GM is an Asian company.