Saab Bankruptcy: What Does It Really Mean?
December 19, 2011
And so the announcement came. Saab Automobile finally filed for bankruptcy, something it arguably should have done when General Motors gave up on the struggling brand two years ago.
In the bigger scheme of things, the saga about Saab Auto’s troubles — and the eccentric Dutchman Victor Muller’s creative but unfruitful attempts to rescue the company — is insignificant to say the least.
The company has been on life support the past nine months, and in the third quarter the company manufactured only 130 and sold 1,235 cars. Its assets are valued at a mere 3 billion Swedish kronor ($431 million), according to the bankruptcy filing.
In an attempt to highlight exactly how insignificant Saab Auto is, Sweden’s National Institute of Economic Research (NIER) concluded that the worth of Saab Auto’s production (including production value for its subcontractors) was about 3.1 billion kronor last year, representing 0.11% of Sweden’s total economic output. For most part of this year production has been halted, and now the figure is even closer to nothing.
Of course, the bankruptcy is a sad event for employees at Saab Auto and its subcontractors, but NIER noted that Saab’s production last year generated some 6,800 jobs in total, representing only 0.15% of Sweden’s total employment.
So why have media kept reporting about Saab Auto, one may rightfully ask? The reason is that somehow, this quirky little car brand with its few, but fiercely loyal enthusiasts, has been a source of great affection, nostalgia and Swedish nationalism.
According to an assessment made by Rüdiger Hossiep, a psychologist at Ruhr University Bochum, Saab owners have one of the highest level of psychological involvement with their Saab’s, being over ten times more passionate about their cars compared to the average Volkswagen driver. Just consider the passion for Saab displayed by American comedian Jerry Seinfeld.
Hence, for a precious few, the Saab bankruptcy is comparable to what many Apple fundamentalists would feel if Apple suddenly disappeared. Also, the story about Saab Auto is an illustrative and interesting example of Chinese ambitions to capitalize on the struggles of many Western firms — and U.S. resistance against this development.
Now, a bankruptcy isn’t all bad. Saab Auto’s assets and brand are likely to draw some attention from potential bidders and it’s not inconceivable that the bankruptcy process will reveal someone that is able to ensure some kind of future for the iconic car. Let’s just hope it won’t be another Victor Muller, who has been enthusiastic for sure, but has lacked perception of reality and necessary funds.
