Bernie’s bargain hunt
The danger of being perceived to be super-rich is that it becomes increasingly difficult to pick up a bargain. This must be very galling for Bernie Ecclestone, who like any entrepreneur likes to buy low and sell high. In the case of his offer to take the moribund Saab off GM’s hands, in partnership with Genii Capital, it appears that GM has been holding out for something to “sweeten” the deal.
In other words: “You’ve got plenty of money – so divvy up some more, old chap.”
Although the Telegraph has quoted new GM Europe CEO Nick Reilly (a GM career man) as saying that the company could change hands for a nominal sum, the figure mentioned in the story – $1 – does not actually appear in any reported quotes, so it may be an invention of the writer. A representative of the prospective purchasers told Reuters that GM is seeking assurance that Ecclestone and Genii have the wherewithal to ensure Saab’s future.
The explicit Ecclestone-Genii alliance has been of great interest to F1 insiders, many of whom have been speculating that Genii’s investment in the Renault F1 team was lubricated with funds from Bernie’s capacious vaults – as was the case, they say, with the succession of new names above the door of Eddie Jordan’s former equipe.
Still, I’m a trifle baffled by the Saab business – in every sense of the phrase. Is it a bargain? I doubt if even David Dickinson would describe it as “a bobby dazzler”. What brand capital Saab once had as a maker of solid but distinctive and quirky mid-size cars is long gone to all but a tiny cabal of ageing loyalists.
Saab’s antediluvian model range needs urgent investment, and developing new cars isn’t a cheap process. The devaluation of the brand began in the mid-1980s, before GM’s takeover, with the 9000 model, the product of a misbegotten platform-sharing agreement with the Fiat group.
GM took a 50 per cent stake in 1989, and even though it quickly became clear that the automotive giant had no clear strategy for Saab, it completed the takeover in 2000. The ‘new’ 900 model of 1993, relaunched five years later as the 9-3, was a pastiche of old hat Saab design cues riding on an Opel/Vauxhall Vectra chassis. It was safe enough if you were to run headlong into a moose, but otherwise its dynamics were too poor to commend it to the discerning driver.
Mid-way through presiding over a two-decade spell of ennui and underinvestment, GM decided to make Saab a ‘premium’ brand. I went on the launch of the all-new 9-3 in 2003, during which it was explained that all the Saab dealers would have to subscribe to new standards of presentation in order to keep their franchises. At this point Saab’s model range consisted of a reheated Opel Vectra and a glorified Fiat Croma, although behind the scenes it was developing model for the US market based on the Subaru Impreza – a dog of a car that principally appealed to boy racers and rally geeks (there’s an overlap; I could draw you a Venn diagram).
I paired up with fellow iconoclast Iain Robertson for the drive, and we concurred that while the car wasn’t bad, it had too much from the GM parts bin for it to compete with BMW and Mercedes. Still, one of the other veteran motoring hacks saw some cause for optimism.
“Have you seen the sort of people buying BMWs nowadays,” he hissed rhetorically after dinner, tremulous fingers clutching a glass of port. “Forgive me, my lad – who are you, anyway?”
Ultimately, branding is about product. Making the showrooms posh didn’t transform Saab into the premium brand it wanted to be, and buyers steered clear of its ageing and underwhelming model line. The absence of bespoke multi-cylinder engines didn’t help; there was a GM V6, but other than that Saab stuck with small-capacity turbocharged fours at a time when premium customers wanted silky, pukka V6s and V8s. Tumbleweed blew across the polished tiles of the lately refitted dealerships.
So if Bernie and has buddies do get hold of Saab, they have a hell of a lot of investment and product-planning to do. Sticking a Saab badge on the nose of an F1 car (if that is one of their aims) won’t bring this brand back from the dead.