Car Boss – The tension mounts

Welcome to our imaginary world of The Car Boss. Where we play the biggest motoring board game we can come up with. We can make decisions, talk to the big players and hopefully make a success without actually having to risk millions in the process.

It’s been a difficult few weeks especially as we have just returned from Trollhatten, the home of Saab. The purpose of our visit was to see exactly what our purchase offer would buy. But having not only seen an idle factory, the knock-on effect for the town of Tollhatten has had a far more lasting impression.

So far in our bid, we’ve put an offer on the table and flown out to Sweden with the bosses of General Motors. As exciting as this buyout plan could be, I do have a different and very personal view on the situation having taken in our recent visit. It’s fine to say that Paragon Automotive have the funds available, but to entice an entire workforce back to work and gaurantee to revive the town of Trollhatten, is a very heavy responsibility to have. This isn’t just buying a car company and re-starting production, but a personal voyage for every single person working back at Saab.

We’ve calculated that around 6000-7000 people would rely on Paragon Automotive to make it work again, from factory staff to Saab’s suppliers. Redundancy levels from the factory closure are far higher than we expected. Trollhatten has a population of around 50,000 and relied on Saab for its core business; hotels, restaurants and clubs. Nearly half of these have already seen a dramatic loss of busines and some have had to close altogether. The factory closure has had a far bigger impact than any press article has touched on.

Three thousand five hundred people lost thier jobs, and Saab was the biggest private employer in Tollhatten. A large proportion on the workforce gave over 30 years service and now have difficulty in finding new employment. The biggest Saab dealer in Sweden is now stuck with 500 unsold cars.

Despite this, there seems to be some activity around the factory technical centre. Several disguised prototypes appear from behind the security gates, but it’s an eary feeling as hundreds of Saab’s lie dormant waiting for the lawyers’ arguments to end. We’re not told exactly who is using the facilities, but it gives some hope of a revival. Any car company needs more than just grit and entreprenurial flair to succeed. It’s a business that involves murky politics, trade unions, vast workforces and most intimidating of all, vast sums of cash. If this deal does go ahead we need to be braced for relentless media scrutiny.

Our plans continue and a we’re in the process of putting a new model line-up together. But what has to be important, is striking a balance of retaining the heritage of the brand and bringing it right up to date. Saab’s were loved because they were quirky and different, and we think General Motors had difficulty understanding this. They became successful for being one of the first manufacturers to exploit the world’s growing demand for good value, premium sports saloons. They were safe, agile and distinctive, but the world moved on as BMW muscled thier way in and VW polished it’s Audi brand. Saab stood still.

We’ve been asked to put a financial plan together but we’re in tough competition. Various Chinese car makers and we believe, Mahindra, are also crunching the numbers too. A tense few weeks lie ahead.