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GM Europe to Keep Sagging Saab Plant in Business

 By William Diem

WardsAuto.com, Jan 23 2006

GM has plans to keep Trollhattan running even after its core products move to Adam Opel AG’s underutilized plant in Russelsheim, Germany.

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PARIS – General Motors Europe plans to fill the Saab Automobile plant at Trollhattan, Sweden, with a mixture of low-volume cars not yet on the market.

Although Saab continues to lose money and GM’s leading investor proposes the brand be sold or shut down, GM has plans to keep Trollhattan running even after its core products move to Adam Opel AG’s underutilized plant in Russelsheim, Germany.

Saab 9-3 will move to Germany by 2008.

In a recent interview, GM Europe President Carl-Peter Forster says Trollhattan will be kept in business, and there will be no reduction of the workforce. Last year, 3,000 plant workers built more than 100,000 units of the Saab 9-3 and 9-5.

“We have the right number of people on board” at Trollhattan, Forster says. “We simply don’t produce enough cars yet. We have the paint shop. Everything is in place. If we built 250,000 cars with the current headcount, we would be extremely productive.”

By the end of the decade “we will be building 250,000 cars,” Forster says, thanks to “some next Saab vehicles, without being too specific about which ones.”

Although he declines to name them, both the Saab 9-5 and 9-3 will move to Germany by 2008.

“It is not at all certain that the factory will live,” says Jean-Michel Prillieux, forecaster for French consultant Mavel SA. “First, there is the possibility that GM would sell Saab. Second, he (Forster) could just be saying that.”

The only announced future product for Trollhattan is the Cadillac BLS, a made-for-Europe Cadillac based on the 9-3, for which production begins in late February. Apparently, both Russelsheim and Trollhattan will be Epsilon II plants.

Prillieux says the 10-year-old Saab 9-5 is scheduled to move in 2007 to Russelsheim, where it gets renewed on a long version of the new Epsilon II platform.

The 9-3, also on the Epsilon II, will move there a year later. GM also builds the Epsilon-based Opel Vectra in Russelsheim. Other midsize front-wheel-drive cars using the current Epsilon platform are the Chevy Malibu and Pontiac G6.

Prillieux, who projects automotive production to help suppliers form their strategies, says GM plans to have four vehicles in Trollhattan by 2009. They include the:

  • Cadillac BLS, 20,000 units.
  • Cadillac BRX SUV, 30,000 units.  

  • Saab 9-4X (based on the BRX), 15,000 units.  
  • Saab 9-1 or 9-2, a competitor for the Volvo C30, 50,000 units.  

The two Cadillacs and the 9-4X would all use the Epsilon II platform.

In addition, Prillieux says Saab may bring the 9-3 convertible back to Trollhattan from Magna Steyr Daimler Puch Fahrzeugtechnik AG & Co.KG in Austria, which would add 20,000 units and bring total production to 135,000 units.(See related story: Graz Approaches Global Vision)

He says the 9-1/9-2 is planned for 2008 or 2009, and the Cadillac BRX for 2008.

Saab sales in Europe hit a record 81,401 units in 2005, a 0.7% gain from 2004, European auto makers’ group ACEA says. But even adding U.S. sales of 38,343 units, including two rebadged models not sold in Europe, the brand is tiny.

“Why does GM still own Saab?” Jerry York asked earlier this month. York is an advisor for investor Kirk Kerkorian, who is GM’s largest shareholder with 7.8% of its shares.

“Forty thousand units per year in the U.S., less than 150,000 units per year on a worldwide basis. Unless what I see in the press is wrong, it has pretty much been a money loser. So why not get rid of it?”(See related story: York Gives Chapter, Verse on GM)

Saab sales were exceptionally strong last year in the U.K., surging 35% thanks to the new 1.9L diesel engine from the aborted Fiat-GM Powertrain joint venture and demand for the 9-3 Sport Sedan and Sport Hatch.

“We were on the spot with the product mix,” a Saab spokesman says, noting the U.K. has moved from almost zero diesels five years ago to nearly half the market now.

This year, Saab Europe will get a new product with the 9-3 convertible, to be built by Magna Steyr in Graz. Sales start in June. The U.K. is one of Europe’s best convertible markets, so the company hopes for another good year there, especially because the convertible will offer the 1.9L diesel.

In the U.S. market, where Saab’s 2005 sales totaled 38,343 units, barely more than 2004’s 38,159, the auto maker also sells a handful of the 9-2X sport wagon (basically a rebadged Subaru WRX) and the 9-7X midsize SUV, (redone Chevrolet TrailBlazer).

Saab had planned to have a 9-6X, based on the Subaru B9 Tribeca cross/utility vehicle, but the deal collapsed last fall when GM sold its stake in Fuji Heavy Industries Ltd., the maker of Subaru. (See related story: Toyota Buys Stake in Fuji as GM Dissolves Relationship)

In addition to 3,000 plant workers, Saab has about 1,700 employees at Trollhattan in the Saab Brand Center.



© 2006, Primedia Business Magazines and Media, a PRIMEDIA company. All rights reserved. This article is protected by United States copyright and other intellectual property laws and may not be reproduced, rewritten, distributed, redisseminated, transmitted, displayed, published or broadcast, directly or indirectly, in any medium without the prior written permission of PRIMEDIA Business Corp.

 
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