Saab's U.S. dealers seek fair compensation in bankruptcy
Saab dealers hope to be compensated fairly for the losses they will incur now that the Swedish automaker has filed for liquidation.
A Swedish court on Monday approved the automaker's bankruptcy petition to liquidate and begin paying creditors. Two receivers were appointed to oversee Saab's assets.
"Obviously it is very sad and disappointing news. A lot of jobs at the dealer level are going to be lost. A lot of assets are going to be lost by the dealers," said Kurt Schirm, chairman of the Saab National Dealer Council.
Saab currently has 188 dealers in the United States.
Saab dealers were told later Monday of the liquidation during a nine-minute conference call with Tim Colbeck, COO of Saab Cars North America.
"All factory incentive programs that were available on Saturday are no longer available," said Bernie Moreno, dealer principal of Saab of North Olmstead, Ohio. "Any payments to dealers are on hold until they get further direction."
Moreno said dealers were not given an opportunity to ask questions because the automaker is waiting for directions from the court in Sweden.
Saab's U.S. officials also declined additional comment, pending a board meeting scheduled for Tuesday.
Schirm estimated there are about 3,000 new vehicles in dealer inventory "that will be worth considerably less than had a deal been put together."
Schirm is president of International Motors in Falls Church, Va.
The Saab dealer council has been in contact with NADA to determine each dealership's customer liability and other issues, he said during a telephone interview.
"As the chair of the national dealer council we have been preparing in advance as to what we are going to do and how we are going to try to secure the dealer network's assets as best as possible to get some kind of compensation for what we are known to lose from our businesses," Schirm said.
Schirm said dealers will have legal claims against Saab Cars North America. But much remains unknown.
"It just depends on whether or not there are assets to fund the claims that we have against Saab [Cars] North America to compensate us for receivables that are outstanding -- if they remain outstanding -- and the loss of our inventory values," he said.
Saab is up to date in terms of payments for warranty repairs, incentives and holdback, said Michele Tinson, a Saab Cars North America spokeswoman.
Bernie Moreno, dealer principal of Saab of North Olmstead, Ohio, said there was not much that dealers could do to prepare for today's announcement.
"Honestly, it is sad. Saab is a very iconic brand," Moreno said. "It has been around for a long time. There are a lot of people who have a certain amount of romance for the brand."
Moreno said there wasn't an opportunity to voluntarily terminate the franchise for the last several months.
"To the extent that the dealers were able to sell off their inventory cheaply, that is all they really could have done to be prepared for it, aside from monitoring their own business expenses and cutting employment levels and cutting contracts," Moreno said during a telephone interview.
He said dealers will need to be careful selling off remaining new-car inventory.
"Knowing where this is headed, you have to have confidence that the incentive money will be received," Moreno said. "Otherwise, whatever loss you are taking on the inventory, this is always a loss, gets magnified."
Commenting on Saab's product line, Moreno said "it is ironic that the best vehicles ever offered by Saab are available as the company faces liquidation. It was just too late. The forces that brought it down were forces that couldn't be fought back."
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