TROLLHATTAN, Sweden -- Saab Automobile AB expects to be profitable this year after cutting its loss to $5.9 million in 2003, its top executive says.
"We stick to our target of returning to profit in 2004," says Peter Augustsson, Saab CEO.
Saab's 2003 loss was revealed in a Swedish regulatory filing. Augustsson says that in 2003 Saab cut its fixed costs by 20 percent, or $200.7 million. The Saab boss expects similar cost savings for 2004.
Augustsson says there are three major components to Saab's recovery plan:
1. Continuing staff reduction. The GM division has about 6,300 Swedish workers, down from more than 9,000 at the end of 1999. "We need to let go several hundred workers by the end of the year," Augustsson says.
Like last year, there will be no early retirement programs. Staff will be cut solely through turnover.
2. Adding products. Saab plans to sell 130,000 to 135,000 vehicles worldwide in 2004, compared with 131,641 in 2003. But it wants to hit the 200,000 mark in 2006.
Augustsson's big hope is the United States, where Saab sold a record 47,914 vehicles in 2003. But U.S. Saab sales through July were 22,888, down 20.7 percent from 2003.
Two new models available only in North America should increase sales, he says. The Subaru-based 9-2X premium compact went on sale in June, and the 9-7X SUV is scheduled to arrive next spring.
3. Increasing productivity. Augustsson says Saab is increasing productivity by 10 percent per year by trimming staff and increasing production at its sole assembly plant, in Trollhattan. Last year the plant built 112,000 vehicles.
Augustsson adds that the plant, which has an annual capacity of 200,000, could add other GM vehicles such as the Opel Vectra successor and a planned Cadillac entry-level model.
But he also said there is a "theoretical" danger of the plant being closed down: "This cannot be ruled out. However, this applies to every single GM plant."