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For Saab, It’s Likely All Over But The Crying 9
Posted by Kurt Ernst in Automakers, Automotive, Kurt, News, Saab on 09 9th, 2011

Saab's 2006 Aero X concept. Oh, what could have been… Image: Saab

The near-final chapter is Saab’s storied history appears to have been written yesterday, when a Swedish court denied the struggling automaker protection from its creditors. Saying that the automaker lacked a clear source of funding to continue operations, the court denied Saab’s petition for the equivalent of reorganizational bankruptcy and opened the door for labor unions and creditors to begin bankruptcy proceedings. Saab is appealing the court’s decision, but it’s unlikely that a higher court will be more sympathetic to the automaker.

While labor unions filing bankruptcy against Saab may look like a dog biting the hand that feeds it, the move is necessary under Swedish law for Saab’s workers to collect unemployment benefits. Saab’s workers haven’t been paid since July, so it isn’t likely that they’ll be willing to wait patiently for Saab to land new sources of financing. Neither will Saab’s suppliers, some of whom haven’t been paid since the first quarter of this year.

In Saab’s petition before the court, the automaker cited some $340 million in committed funding from Chinese partners Youngman and Pang Da, but the court wasn’t willing to factor in either deal. Both require approval from the Chinese government, who has been reluctant to approve deals between Chinese manufacturing companies and foreign automakers. Given China’s goal of creating two or three world-class Chinese auto brands, approving a deal to save Saab would have been more of a distraction than a means to an end.

What happens next is up to Saab’s creditors, but the future looks very bleak. Barring a last minute investor, willing to sink $140 million or more into an unprofitable company, Saab’s final chapter is just weeks away.

Source: The Detroit News

Planned Obsolescence? Unavailable Part Forcing Owner To Scrap ’04 Chevy Cavalier 24
Posted by Kurt Ernst in Automakers, Automotive, Chevrolet, Chevy Cavalier, Kurt, News, Planned Obsolescence on 08 24th, 2011

A 2003 Chevy Cavalier Coupe, not the one owned by PaperDol.

It’s no secret that drivers are holding onto cars longer these days, since the whole concept of disposable income seems to have gone the way of the dinosaur. The average time that drivers hold on to new cars now is something like 10 years, which, under most circumstances, doesn’t pose a problem with parts availability. That’s not always the case, as a California blogger who goes by the name PaperDol recently found out.

PaperDol drives (or drove, actually) a 2004 Chevy Cavalier. A few weeks back the accelerator pedal went to the floor, with no corresponding forward motion from her car. At first, the driver thought her foot had slipped from the accelerator; upon closer inspection, she realized that the accelerator pedal assembly itself had broken. PaperDol’s first trip was to her trusted mechanic, who was unable to locate the $50 part in GM’s replacement part inventory. Because of federal safety laws, the part couldn’t legally be replaced with a used one, so her mechanic advised her to bring the car to a Chevy dealer.

Thus began, in PaperDol’s words, a “nightmare of mind-searingly bad customer service,” and anyone who’s had recent experience with a large corporation can associate far too well. First she was told the part was on its way, only to find out later that the last example in America, the world and perhaps the entire universe had been sold just three weeks earlier. The response from a mechanic at the dealership, “there are no guarantees in life,” did nothing to ease PaperDol’s frustration.

The dealer’s next course of action was to try and upsell her into a new Chevy, going so far as to offer seven-year financing to “keep the payments low” (and, coincidentally, pad the profits made by the dealership on the loan). For now, the situation is at an impasse: PaperDol is sans cars, the dealership has run out of options and GM is only saying that it will “get back to the customer.”

Source: Left Lane News

Can The Chinese Save Saab? 11
Posted by Kurt Ernst in Automakers, Automotive, News, Saab on 05 11th, 2011

Saab's 9-5 in testing. Image: © Saab AB

In many ways, the saga of Saab automobiles is playing out like an old-fashioned movie cliffhanger. Each week, our hero (Saab, in this case) seems closer to imminent death, yet somehow survives to fight another day. For the past month, Saab’s financial state has looked bleak: a plan to sell off Saab assets to raise capital was being heavily scrutinized by both the European Investment Bank (EIB) and the Swedish Debt Office. At issue was the potential buyer (Vladimir Antonov), a Russian investor with alleged ties to organized crime.

This week, there’s a new twist: Hawtai Motor Group, a privately owned Chinese company, is seeking to invest some $210 million in Saab, giving them a 29.9 percent stake in the struggling automaker. Per Daniel Barr, Swedish Debt Office project leader for Saab, the automaker has filed an application for ownership change which must be approved by both the Debt Office and the EIB before money can change hands. Even if the agencies do green-light the ownership change, Hawtai will still require approval from the Chinese government. In other words, the transaction is still a long way from being signed, sealed and delivered.

Saab has been at a production standstill since a lack of cash flow forced suppliers to halt deliveries in April. Should the deal with Hawtai gain approval, the company could begin production of automobiles within two weeks. Even that may prove to be a double-edged sword for Saab’s employees, since the investment by Hawtai is likely to pave the way towards Chinese manufacturing of Saab automobiles.

Source: 4 Wheels News

Avera Motors Becomes Rivian Automotive 16
Posted by Kurt Ernst in Automakers, Automotive, Avera, new cars, News, Rivian Automotive on 03 16th, 2011

Image: Rivian Automotive

How is it even remotely possible that a car manufacturer I’ve never heard of exists in my own state? Especially since they promise to bring mid-engine, rear drive performance to the masses, all with a focus on fuel efficiency and affordability. Think of a Toyota MR2 Turbo mated to a Toyota Prius, and you get the picture; unfortunately, that’s the only picture we have to date (except for the cloaked image above). Rivian Automotive, it seems, has spent the last few months fending off legal action from Hyundai, who was concerned that the Avera name was too close to Hyundai’s Azera. Not that buyers would likely confuse a fuel-efficient, American built sports car with a luxury sedan from Korea, but experience tells me it’s best to keep lawyers busy. That way, they have less time to protect us from ourselves.

So now that we know Rivian Automotive, what doe we know about them? The answer is not much, but they’ve made some big promises. First, they claim that their vehicle will be fun behind the wheel, with a mid-engine, rear-drive layout, lightweight space frame and double wishbone suspension. They claim their vehicle “won’t break the bank”, but they stop short of defining a price bracket. Using race car architecture, they say their vehicles will provide “industry leading safety”, and even display a yet-to-be earned five star rating. Finally, they bill themselves as a green company, without even telling us how the car will be built or what will power it. In fact, the only reference to the drive system is the vaguely ambiguous statement, “Rivian Automotive’s lightweight and aerodynamic platform enables fuel economy well beyond today’s best hybrids. That’s a bold statement to make unless you’re certain you can back it up.

If it seems like I’m being overly harsh on Rivian Automotive, it’s only because I want them to succeed. Scratch that, I need them to succeed, since they have the potential of single-handedly saving employment on Florida’s Space Coast. I’d much rather see former NASA engineers building a new and remarkable automotive platform than working at Denny’s or Home Depot (your two best employment options in Florida). If I’m skeptical, it’s only because experience tells me that anything that sounds too good to be true usually is. God, I hope I’m wrong about Rivian Automotive.

Hyundai Ponders Second U.S. Manufacturing Plant 17
Posted by Otto in Automakers, Automotive, Hyundai, News on 01 17th, 2011

Hyundai's plant in Montgomery, AL

Hyundai is in an enviable position among automakers: sales of its vehicles are so good that Hyundai’s considering the possibility of building a second manufacturing plant on U.S. soil to boost capacity. Hyundai’s existing plant, in Montgomery, AL, has already farmed out production of the Santa Fe SUV to Kia, who builds in in their West Point, GA, manufacturing plant. That’s freed up Montgomery to focus on building the Sonata, but Hyundai also has serious expectations for sales of the redesigned Elantra. If sales continue to grow, even running three shifts per day in Montgomery may not be enough to satisfy customer demand for product. While lack of capacity isn’t a limiting factor today, clearly the writing is on the wall.

Hyundai’s U.S. sales grew nearly 25% in 2010, fueled by a freshened mix of product and a growing base of loyal supporters. It’s entirely likely that their sales will grow in 2011 as well, with the only real question being, “by how much?” That said, funding construction of a new manufacturing plant is a major risk, unless you’re absolutely certain that you can sustain the momentum of sales growth that you’re currently experiencing. Hyundai executives aren’t going to rush into any decisions, and will take the remainder of this year to compile the information necessary to make a go / no go decision on a new plant. A formal decision isn’t expected until some time in 2012, but I suspect that Hyundai can move very quickly is the right answer is “build”. If sales continue to grow at 25% annually, the company won’t have much of a choice but to expand manufacturing in the U.S., but that’s a good problem to have.

Source: Autoblog