December 12, 2011

A sad tale. A Saab story

Have you heard that Saab is near bankrupt?
Saab, in case you don’t know, is a Swedish car manufacturer––founded in 1937––that for the longest time had a rigorous, loyal, and yet somewhat stingy following.
Beatniks bought Saabs.
And college professors. College professors, that is, in snow belts.
Saab’s cars were quirky, off-beat and as loveable as a three-legged mutt with a loopy grin.
In the automobile landscape, Saab was a fringe player destined to remain a fringe player.

I loved Saabs, though. Still do.
I loved their independent appeal, their doing-it-my-way bent.
So, how come I never bought one?
Don’t know, really. Too young to be a beatnik, maybe. Or too dumb to be a college professor.

The truth is I don’t know why I never bought one. But I do know that, now, it might just be too late.
Why? Because of General Motors, that’s why. And Saab management’s strategic error of shacking up with a company infinitely larger than its own.
You see, in 1990, General Motors courted Saab; whispered sweet nothings about more market share and bigger profits.
And when a big company approaches your little company with big ideas and an even bigger cheque, it takes strong nerves and an iron will to not let yourself get wooed.
So, in the end, Saab capitulated. It became General Motors with a Swedish accent.

And now, and now… Saab is just about bankrupt. Mostly because the company that was going to give it wings (get the pun? No? Then read this) is now the one shooting it down.
I’ll spare you the details, the board-room maneuvering, behind this unfortunate tale, and I’ll just point you here for the deets.
Because the point I want to make is it all reminds me of something an elderly bookkeeper told me, years ago, when I was making my start in business. “Business,” she cautioned me, “Has no soul.”
And, if you read the background on the Saab/GM soap opera, you’d say touché to that opinion, wouldn’t you?

The other thing I’m reminded of is that I often caution my clients about getting cozy with big business.
Sure, sometimes it pays off.
But here’s what you have to understand about big business. They have a tendency to change their minds.
And when they do, they don’t waste too much time explaining why.
And yet, despite my words of warning to others, I do understand how alluring that siren call can be. I understand it all too well because I once (and only once) fell for it myself.
Yes, it’s true. Years ago, I too got into bed with a big business. A huge business.
Words got used. Impressive words like synergy and leverage.
We’d work together, they said, build something long-term, something mutually profitable.
And I let myself get wooed too.

Bottom line is I felt, first-hand, the pain of having the bottom fall out of that basket holding all my eggs.
And lest you think otherwise, the pain is more than financial. It affects you mentally and emotionally too. And, let me tell you, you take it personally.
Which is why, I suppose, Marc Cuban once said, “Business is always personal.”

So where does all this leave us?
Hopefully it leaves you with a lesson in strategic management.
As for me, I’m hoping that Saab pulls out of this mess. And, should the worst happen, I’m perusing the autotrader, wondering about a used Saab.


Comments (2)

  1. December 22, 2011
    Joseph Pearl said...

    The word is, General Motors, which had formerly owned Saab and held on to some of Saab’s technology licenses, blocked the sale of Saab to Chinese investors because GM didn’t want these investors to get a hold of this technology. Some are now speculating that because of this, replacement parts on the newer model Saabs will be difficult to obtain. If this is the case, my guess is that a company will begin and supply these parts.

    Joseph S. Pearl, LL.M. – A Professional Law Corporation
    1400 Chester Ave., Suite C
    Bakersfield, CA 93301

  2. December 30, 2011

    Thanks for commenting. While understanding the corporate rationale behind GM’s strategy, I can’t help but be disappointed and a little upset that Saab’s pretty much defunct. And my reasons for feeling that way are, I’ll have to admit, utterly selfish. I’ve always wanted a Saab, never got around to buying one and now, for reasons you make clear, probably never will. Time to move on, I guess.

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