Business

Saab's future hangs on foreign deals

Ron Fortune is wrestling with uncertainty again.

It was nearly two years ago that Fortune, owner of Euro-Tech Saab at 1122 E. Central, wasn't sure he'd have a Saab franchise because of months of on-again, off-again efforts by General Motors to sell the Swedish automaker.

Now, Saab's Dutch owner, Swedish Automobile, says it doesn't have cash to make payroll for its 3,700 workers in Sweden.

Meanwhile, a couple of different deals that Swedish CEO Victor Muller is working on with Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co. in China, sit on the table, awaiting Chinese government approval.

Another one, with Russian investor Vladimir Antonov lined up as a potential buyer of the Saab factory and part-owner of Swedish Automobile, hasn't received the necessary approvals from the European Investment Bank, which last year gave Saab a $580 million loan.

Those deals could mean the infusion of hundreds of millions of dollars into the company and give it the footing it needs to have a fighting chance.

"If he (Muller) doesn't get this money, it's pretty much sayonara," Fortune said Friday.

In the same breath, Fortune said he's optimistic that one of the deals on the table will get done.

"My gut feel is it's a 50-50 (chance), maybe better," that Saab will get the money it needs to get business rolling again, he said.

But some analysts don't hold much hope for Saab's longevity.

Bill Visnic, senior analyst at Edmunds.com, said the brand has had too many obstacles to overcome in the past two years for it realistically to survive — without a deep-pocketed equity suitor.

"It really appears increasingly desperate as each new piece filters out about this," Visnic said.

The brand, which posted multiple losses as part of GM, endured the GM bankruptcy and then a lengthy and sometimes tumultuous sale process. And then Saab was sold to Spyker, which renamed itself Swedish Automobile, a company whose experience in automaking was limited to building luxury cars with a $200,000-plus price tag. Since then, the company has been beset by cash problems, including halting since March as Saab struggles to pay suppliers for parts. It's expected to remain shut at least until July 4.

Visnic said Saab would have a better chance of succeeding if it had been acquired by a company with a lot of cash on hand — and patience.

"They needed time to re-establish the brand... the financial wherewithal to wait it out," he said.

The fact that the company is now at a place where it can't make payroll is "just really tantamount to a death sentence," Visnic said. "I just don't know how else to view that."

He said the irony is the cash-flow crunch is happening at the same time Saab rolls out new product, such as its 9-4x, which is a finalist for the North American Car/Truck of the Year awards at the North American International Auto Show in January in Detroit.

Theoretically that could "tide them over to get to the point where people are buying more (of Saab's) cars," Visnic said.

Euro-Tech's Fortune said if he can't keep the Saab franchise, he'll convert his nine-employee dealership into an independent dealer strictly selling used cars.

"I think it's more than likely (Muller is) going to get a deal done," Fortune said. "But there's definitely the potential that he wont get a deal done."

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