Auto Outlook: Saab drives into the sunset

By AL SWANSON, United Press International  |  Dec. 25, 2011 at 4:30 AM
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It's sad when a once respected company or brand leaves the marketplace. Fans and collectors often try to keep it alive -- at least in memory -- and apparently that's where the quirky Saab is headed.

Swedish Automobile AB, the parent of Saab, filed for bankruptcy in a Swedish court Monday after former owner General Motors Co. refused to permit a bailout sale to two Chinese companies. GM licenses technology used in several key Saab models.

The bankruptcy means Saab, which has not paid its bills since March, or paid its workers since August, likely is headed to same auto graveyard as Studebaker, Hudson and scores of other nameplates with a once proud history.

Some won't let it go without a fight.

Saab's 188 U.S. dealers sold a combined 356 vehicles last month and an outside consultant who is considered a turnaround specialist tells The Detroit News in an interview that he has been hired to review Saab's U.S. and Canadian operations. There are about 2,400 Saab vehicles sitting unsold on dealer lots and showrooms but selling them will be tough since the company in Sweden suspended warranty coverage.

"Cars from a dead brand are perceived as less valuable, and perception becomes reality," executive editor and senior analyst Joe Wiesenfelder said in a release. "If you're going to drive yours forever it shouldn't affect you too much, but if you're in an accident, it's much more likely your insurance company will total your car and present you with a much-smaller settlement check that you'd expect."

Wiesenfelder said when brands like Pontiac, Oldsmobile, Saturn and Mercury disappeared GM and Ford honored their warranties, but with Saab liquidating rather than restructuring, it could lower resale values.

"There will always be people who are able to service Saab vehicles, but the bigger concern for owners might be an eventual shortage of replacement parts," he said.

Wisenfelder predicts dealers will slash prices to try to get rid of their remaining inventory, which have MSRP sticker prices of $32,000 to $60,000 pasted on their windows. Discounts of $7,000 have already shown up on the Saab 9-3 convertible and more than $11,000 on the flagship 9-5 sedan.

The silver lining for Saab lovers who want a new one is they won't take as much of a depreciation hit when they drive it off the lot.

General Motors Wednesday said it would continue to honor warranties on all Saabs sold before February 2010, when the company was sold to the Netherlands Spyker Cars, which became Swedish Automobile.

"If Saab is unable or unwilling to service the warranties in (North America) then General Motors is going to step in and take care of it. "We're in the process of rolling that (information) out to Saab dealers right now," GM spokesman Jim Cain said in a telephone conference with reporters.

GM estimates it will directly cover what remains on the 4-year, 50,000-mile warranties of about 48,000 Saabs in the United States and 9,000 vehicles in Canada. New 2010 and 2011 cars will be sold "as is" -- like a used car -- without roadside assistance or free scheduled maintenance for three years or 36,000 miles.

Saab Cars North America is in a holding pattern and has not filed for bankruptcy or announced liquidation, a spokeswoman said from division headquarters in Royal Oak, Mich.

"I am going to keep the company operating as long as it has the capital," Jim McTevia, whose management company McTevia & Associates will run Saab NA, told the News. "There is a tremendous amount of value here."

McTevia said when people tell him Saab is dead he thinks about the company's dealer network and infrastructure.

"I have seen things happen through my years doing this that have astounded me," he told USA Today. "Everybody said Jaguar was dead. Well, I drive a 2011 Jaguar, the L, the big one, the limousine, and it's a wonderful car. I think, 'How the hell could anyone have said Jaguar is dead?'"

Requiem for Dead Cars

Whether Saab winds up in the car graveyard or not, it's worth considering its automotive legacy.

Child of an aeronautics company that produced fighters for the Swedish military, Saab became known for its durable aerodynamic vehicles that could reliably handle Nordic winters with style.

The 1978 Saab 99 Turbo and the classic 1984 Saab 900 Turbo raised the ante for utilitarian four-cylinder engines that had been relegated mostly to economy cars. Remember the cheap econo-boxes of the '70s and '80s?

Saab's turbocharged four-banger had the power of a six-cylinder or small V-8, without sacrificing torque and horsepower. New fuel-sipping direct-injection, four-cylinder turbos now in U.S., Japanese and South Korean cars owe a debt to Saab.

The New York Daily News and USA Today compiled a list of other models that will not be rolling off assembly lines in 2012.

They include the Ford Ranger small pickup, the upscale Buick Lucerne, land yacht Cadillac DTS and STS models, the retro Chevrolet HHR crossover (GM's answer to the late PT Cruiser), Dodge Dakota pickup, the full-size, rear-wheel-drive Ford Crown Victoria (a favorite of taxi companies and police departments), the eco-box Honda Element, the rotary-engine Mazda RX-8 sport couple (Mazda's last car with a Wankel engine), the crossover Mazda Tribute, the sporty Mitsubishi Eclipse, the Nissan Altima Hybrid (which used Toyota hybrid technology) and the Volvo S40 and V50.

Look Ma: "Hands free"

The fallout is settling from a call by the National Transportation Safety Board for a ban on nearly all cell phone use behind the wheel, except in dire emergencies.

The proposed ban would include chatting on handsets, texting and even hands-free calling using a headset or portable Bluetooth device. Calls made through electronics installed in a vehicle, like GM's OnStar or Ford's Sync, would still be allowed as would talking GPS navigation systems.

The nation's transportation chief, a tough opponent of distracted driving, took exception Wednesday, The Detroit News reported.

"The problem is not hands-free," said U.S. Transportation Secretary Ray LaHood, a former Illinois Republican congressman. "That is not the big problem in America."

LaHood says the issue is one of motorists' taking personal responsibility for their safety and the safety of others. He won't support banning all hands-free calling on the road until research shows it makes sense.

"We need people to take personal responsibility. Put the cellphone in the glove compartment," LaHood said.

NTSB Chairwoman Debbie Hersman said on C-Span while a ban including hands-free calling might not be popular it is the best recommendation for safety.

The agency said missing a call or a text is not worth losing a human life.

"Hands-free is not safer than handheld in many circumstances," she said referring to several horrific crashes that involved drivers talking hands-free while negotiating traffic.

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