The Plane Has Crashed

Call the folks in from National Geographic Channel's Air Crash Investigation. It looks like we have some wreckage to survey.

Just this last Friday, General Motors announced that they were beginning the process of closing down Saab Automobile's operations for good. This comes in the wake of a breakdown in talks with Saab's latest would-be suitor, Dutch sports car maker Spyker. But Spyker was only the latest in a long line of potential benefactors that expressed interest in scooping up GM's ailing Swedish near-luxury brand. Just three-and-a-half weeks ago, talks also broke down with Swedish cottage-industry supercar manufacturer Koenigsegg.

Chinese automaker BAIC was in the mix, as well, and managed to get its hands on the tooling Saab was using to build the 1998-09 9-5 and 2003-06 9-3. They just announced that their Saab-based vehicles will be breaking cover from Beijing as soon as 2011.

Another Chinese automaker, Geely, also raised its hand to bid for Saab back in May. That didn't work out, either, and now Geely is going after Ford's Volvo division. And a couple of US investment groups, Merbanco and Renco Group, tried throwing their hats in the ring, as well. But no deal could be finalized. With the dissolution of talks with Spyker, a post-bailout-and-bankruptcy GM decided to leave its expert loss-making Saab brand without a safe runway at which their troubled craft could land.

Until now. Maybe.

If this all sounds like a mess, you're right. It is. But things with Saab didn't used to be so bad. The quirky automaker had far better, more stable days.
Saab Automobile was created as the automotive division of the Swedish Aeroplane Company (i.e., Svenska Aeroplan AB or SAAB) in 1946. The company released its first production car, the small 92, in 1949.

From the beginning, Saabs were known as quirky and decidedly advanced cars. Saab engineers had a different approach to everything in terms of vehicle design. For example, the 92 used an aircraft-inspired body so aerodynamic that most cars today still don't manage to cheat the wind quite like the 92 did. The car was  powered by a transverse-mounted engine driving the front wheels, which enabled a flat interior floor and excellent traction on ice and snow, common occurrences in Sweden. Most car companies wouldn't get around to building transverse front-drive cars until the '60s, '70s, and '80s. Fellow countryman Volvo didn't start until 1986.

But that wasn't all. Race car-inspired torsion bar suspension gave the 92 a smoother ride and tighter handling than most rivals. And all early 92s were built in olive drab green, WWII leftover paint from the company's aircraft arm. Immediately after the 92 was released, it began a long, successful career for Saab in rally racing, winning the Swedish Rally in 1950 and Monte Carlo in 1952. Things were going well.

The little front-drive Saab would roll through the rest of the 1950s picking up many modifications and improvements, as well as a 7-seat station wagon variant, the 95, in 1959. It would add a two-stroke 3-cylinder engine, more rally wins, and a Ford-sourced V4 engine in the '60s. And the basic design would continue to be refined through the '70s, until its cancellation in 1980.

Saab moved into idiosyncratic sports cars like the Sonett, and upmarket to the safety-engineered 99 in 1968. The 99 was a massive step forward, featuring an excellent slant-4 engine mounted backward in the engine bay so that the clutch could be more easily serviced. It was the first Saab with its ignition key located on the floor between the front seats. This enabled the car's gearshift to be locked when parked, making it much harder to steal. It also meant that, in frontal collisions, driver's knees would not come in contact with the hard, compact machinery that steering column-mounted ignition modules contained. The 99 also featured an aircraft-inspired wraparound windshield, a clamshell-style hood for easier engine access, and a cockpit-like high-mounted instrument panel designed to keep all gauges within easy view of the driver. And sales momentum in Europe, the UK, and the US continued to build.

The 99 would show Saab's first expression of hatchback practicality in 1974 and turbocharged power in 1978. It was these two features that would become Saab's defining qualities for years to come.

In 1979, Saab introduced the iconic 900 line of family cars, and sales soared to new heights. In the US, the burgeoning Baby Boom generation aspired to European brands like BMW, Volvo, Porsche, and Saab instead of their parents' Buicks, Oldsmobiles, Mercurys, and Chryslers. Saab's first convertible debuted in 1986 and became a yuppie car of choice. A more commodious 9000 sedan brought in even more affluent buyers. And Saab began to set year-over-year sales records.

So things were going quite well in the '80s. And Saab turbo-boosted production levels at its Trollhättan plant to meet demand.

But then the economy began to dip in the late '80s, and Saab was soon overproducing vehicles that couldn't find customers. Their product line, while initially well-received, was beginning to show its age at this point. And because less money was coming into the company, Saab couldn't afford to finance their replacements. They began to cast out for a buyer, and General Motors was more than happy to take a 50% stake in 1989.

In acquiring half of Saab, GM was hoping to use its own Opel/Vauxhall platforms and components as the basis for Saab's future line of upscale cars. They needed the extra high-margin volume, too, as GM's European brands weren't terribly profitable, due to high labor costs and massive competitive pressures to keep prices low. However, the company knew it needed to give Saab a level of autonomy so that its future products, though GM Europe-based, would win over Saab's current loyal customer base.

The trouble is that GM's sales, market share, and profitability, particularly in America, were sliding, and their shrinking bank account now had to pay the bills for Saab, along with the Saturn brand upstart, and GM's six American vehicle divisions. So Saab's 900 (based on the new-for-'68 99) and 9000 (ca. 1985) replacements were delayed. This left Saab's cars to compete against newer metal from the better-funded Germans and nascent luxury car entries (i.e., Lexus, Infiniti, and Acura) from Japan.

When the all-new 900 debuted for 1994, Saab loyalists shrieked at its platform's Opel parentage, while many others were as put off by its quirky styling and lacking reliability. They were instead attracted to the critically-acclaimed competition from BMW and Mercedes-Benz, and entries in the emergent SUVsegment (e.g., Jeep Grand Cherokee). By the time GM released the funds to replace the 9000, it was 1998, the 9000's 13th season on the market. And its replacement, the new 9-5, retained a host of components from its predecessor, none of which was a hatchback bodystyle. Purists shrieked even louder at this last fact.

Saab continued to offer only 2 models through the '90s and into the new millennium. They replaced the 900-based 3-and 5-door hatchback 9-3s in 2003 (after a longish 9-season run) with a firmly un-quirky sedan lineup. And reliability woes continued to mount as the competition pulled further away from Saab in its market segments.

GM, facing even greater losses in North America and at Saab, decided to act by supplementing Saab's 2-car lineup with a new, smaller car. They contacted Subaru, of which GM owned about 5%, and asked if they could lend Saab the platform for the Impreza wagon. Subaru agreed, and Saab designers went to work hastily grafting a Saab-like nose to the front and different taillight lenses to the rear.

What emerged was the 9-2X, or "Saabaru" as people in the automotive press called it. It was instantly seen for what it was -  a hastily badge-engineered Impreza WRX wagon with a higher price tag. The car was dead on its Fall 2004 arrival. It would last only two model years, and by the end of 2006, Saab was offering so many sales incentives to move them off of lots that many were sold for thousands less than their more pedestrian Subaru-badged cousins.

GM also decided to come late to the SUV party with the Saab brand. But because they'd spent so much money revitalizing Cadillac, they didn't want to spend too much on a vehicle that would ultimately compete for buyers with the much-loved SRX. So they took a mediocre Chevy Trailblazer, threw on a Saab grille and clear-lens taillights, put the ignition key on the console, and sold it as the 9-7X in 2006.

For a car company that pioneered transverse front-wheel-drive and small, turbocharged 4-cylinder engines, the "TrollBlazer" was simply anathema. It was a clumsy, inline-6 or V8-powered, rear-drive biased, Ohio-built marketing exercise of extreme cynicism. What it was good at was making Saabphiles do spit takes at their televisions whenever it appeared in "Born From Jets" commercials. What it was not good at was just about everything else, particularly getting anyone to buy it.

By 2006, though, GM began a wholehearted effort to right the entire ship, and that included trying to fix Saab. The company showed an excellent concept called the Aero X at the 2006 Geneva Motor Show. People gasped at its beauty. They were awed by its aircraft-style canopy door/roof assembly. And they were reassured by GM management that Saab still had some life left in it.

GM spent the years since then revamping the product line and preparing Saab for a future of bright new models. But when the financial crisis hit, GM just didn't have the money to finish the job it started. With production at Saab's one manufacturing plant at 45% capacity, extremely high labor costs, and huge inefficiencies at the plant itself, GM was losing about $5,000 on every Saab sold. And they couldn't justify taking US and Canadian taxpayer dollars to continue to fund a potential turnaround in Sweden.

So Saab, the advanced, idiosyncratic automotive division created from an aircraft company, has called its last "Mayday". It's on a rapid descent and headed for a mountainside. If these 11.5th hour deals don't go through, and the company crashes, it will certainly be a tragedy.

Let's hope that someone will pull up on the controls in time.