SAAB News

The Unseen Reasons Behind Saab’s Exit from GM’s Portfolio and Its Subsequent Bankruptcy: Insights from Bob Lutz

Unveiling the Hidden Reasons: Why GM Dropped Saab and Its Impact on the Automotive Landscape

Bob Lutz, former Vice Chairman of General Motors, reflecting on the decision to discontinue Saab amidst strategic reevaluations within the automotive industry.

Introduction

General Motors’ decision to discontinue Saab has been a topic of discussion and speculation for over a decade. Recently, Bob Lutz, the former Vice Chairman of GM, shed new light on the factors leading to this decision. His insights provide a deeper understanding of the internal dynamics at GM and the automotive industry’s challenges that contributed to Saab’s demise.

GM’s Acquisition of Saab: The Beginning of the End?

In 2000, GM took full control of Saab, marking a significant turning point for the Swedish automaker. While this acquisition was initially seen as a potential boon for Saab, it soon became apparent that the integration into GM’s vast portfolio was fraught with challenges. Lutz describes the period as one where Saab’s unique identity began to be overshadowed by the broader strategic directions of GM.

Integration and Identity Loss

Under GM’s stewardship, Saab underwent significant changes, many of which diluted the brand’s unique appeal. According to Lutz, efforts to mainstream Saab’s quirky designs to appeal to a broader market consistently failed, leading to stagnating sales and an eroded brand identity. “Every time it was made more mainstream, we didn’t sell any,” Lutz remarked, highlighting the brand’s struggle to resonate with a wider audience while maintaining its distinctive characteristics.

Strategic Misalignments and Market Challenges

The automotive industry in the early 2000s was marked by intense competition and shifting consumer preferences. Saab, known for its innovative and somewhat unconventional vehicles, found it increasingly difficult to compete in a market that favored more mainstream models. Lutz’s commentary suggests that Saab’s positioning within GM’s portfolio was always somewhat precarious, caught between maintaining its niche appeal and adapting to market trends.

GM - General Motors


The Decision to Discontinue

Lutz reveals that he had advocated for discontinuing Saab for years before the decision was finally made. The brand, he felt, was “off the mainstream” and its appeal was limited to a small, specific market segment. Despite the affection of the automotive press for Saab’s “goofy” designs, the commercial reality was stark—there simply weren’t enough buyers globally to sustain the brand under GM’s business model.

BOB LUTZ: And when it was goofy, which the automotive press loved, there were only 100,000 people in the whole freakin’ world that wanted one.

The Impact of the 2008 Financial Crisis

The global financial crisis of 2008 and the subsequent recession had a profound impact on the automotive industry. GM, in particular, faced severe financial difficulties that led to a government bailout. As part of its restructuring, GM had to make tough decisions about which brands to keep and which to cut. Saab, unfortunately, did not make the cut.

Government Influence and Tough Choices

The bailout conditions imposed by the U.S. government forced GM to focus on profitability and long-term viability. Brands like Buick and GMC were also on the chopping block, but Saab was among the first to be let go. Lutz’s account underscores the harsh realities of these decisions, dictated by financial necessities rather than purely strategic considerations.

Saab’s Bankruptcy and Legacy

In 2011, just a few years after GM’s decision to discontinue Saab, the company declared bankruptcy. The end of Saab was a significant event in the automotive world, marking the demise of a brand cherished for its innovation and distinctiveness. Lutz’s reflections not only illuminate the reasons behind GM’s decision but also paint a picture of an industry at a crossroads, where innovation often clashed with commercial viability.

Reflections on Innovation and Market Dynamics

Lutz’s career, which spanned across all three of the United States’ Big Three automobile manufacturers, was characterized by a commitment to innovation. However, his experiences with Saab highlighted the complexities of balancing innovative design with market demands. His parting thoughts on Saab offer a poignant reminder of the delicate interplay between maintaining a brand’s unique identity and ensuring its financial sustainability.

Abetter understanding of Saab’s history

Bob Lutz’s candid insights into the reasons behind Saab’s exit from GM‘s portfolio provide a compelling narrative of business strategy, market dynamics, and the harsh realities of the automotive industry. As the industry continues to evolve, the story of Saab serves as a cautionary tale about the risks and rewards of maintaining a brand’s unique character in an increasingly competitive market.

Lutz’s reflections not only contribute to a better understanding of Saab’s history but also offer valuable lessons for automotive brands navigating the turbulent waters of the global market today.

26 Comments

  • El verdadero motivo es que Lutz jamás sintió la más minima empatía, aceptación y tampoco se sintió mínimamente atraído por la marca Saab, su tecnología y forma de entender la fabricación de sus automóviles. Se refiere a ellos como “coches tontos” y todos los demás argumentos que cita carecen de solidez

    • Saab was very Unique for a reason and none of that should have had to change at the time. I really believe if Saab could have afforded their independence they would still be here. However I see that GM is still making cars that are copies from Saab’s Unique build and Saabs technology, amongst others 🤷‍♀️

  • Hilarious his comments “ because they are not car guys they do not understand the business”, so if you so good why you was in bankruptcy? Why you did not do this job before getting to these point.
    Saab had the engineering to apply to other brand and not the other way around, needed to be more what it was not less but with better marketing. He like most GM people never understood what they bought and it shows by his comment.

  • Bob Lutz: the guy who thought he’d know what European consumers would want.
    They want Cadillac instead of Saabs 🤣 And then they made BLS in Trollhättan.
    Was really popular here in Finland: five cars sold when it came out 😁
    I was part of the team which arranged Saabclub Of Finland’s summer event in 2010. I visited couple of dealers in case they’d like to support our club. One of them asked me whether I’d like to take Cadillac BLS commecials and stands with me since the sales had been really poor. Rather not 🤣

    • It was a boutique brand and perhaps it’s getting more difficult in this world to sustain a brand that has a small following, comparatively. Look how Rolls Royce, Bentley, Ferrari, Lamborghini, Porsche, Jaguar have all been absorbed by conglomerates. Perhaps a different company other than GM could have been a better custodian for SAAB and they still might be around!

  • A very sad end to a much loved brand and when you consider all that’s been said perhaps it was better to let SAAB go. Now I say that with a very heavy heart and my reasoning is we would have ended up with a more ” watered down “version of SAAB car’s that would not appeal to those who loved the brand.
    But it also begs the question why did GM acquire SAAB in the first place if they were looking for more mass sales and more of the same, surely it would have been easier to increase production of the mainstream car’s they were already selling. Some people might say that the company couldn’t make enough profit because of production costs but remember that SAAB were all about safety and this is what was causing the company problems because of the cost to build a very safe car. And of course SAAB didn’t want the GM parts bin as a supply they wanted to use different parts etc , how often do you hear for example people saying the car’s had great seats anyway it’s gone now. BTW does anyone know if the SAAB brand and badge rights were bought by any company/organisation?

    • If Saab was such a a doomed proposition, why did GM try so hard to make sure it was completely dead? While they were negotiating the disposition of the brand, suppliers were ordered to destroy the tooling for NG 9-5 models, and Victor Mueller’s financial partner in the proposal to take over Saab was arbitrarily ruled “unacceptable” to GM.

    • The SAAB brand is still owned by the aviation company, and they probably won’t allow any future cars to have that brand.

  • “BTW does anyone know if the SAAB brand and badge rights were bought by any company/organisation?”

    SAAB brand and badge rights are owned by SAAB. They have decided not to allow it to be used for cars.

    • Yes, Saab AB (aircraft) always has owned the rights to the Saab name, the car division was always seen as an off-shoot of first the aircraft division and then the Scania Truck division of Saab-Scania. In 1989 Saab AB granted rights to Saab Automobile AB to use the Saab name, and again in 1995 when Saab and Scania demerged, in 2000 when GM acquired the remaining 50% from Investor AB (who was majority owner of Saab AB) and finally in 2010 with the Spyker acquisition. Saab AB said no in 2014 to NEVS, after the last batch of 9-3N Aeros were made. For the Griffin logo, that requires agreement from Saab AB, Scania and Skane IIRC.

  • GM bought Saab for their turbocharger technology. Same as Ford buying Volvo. The rest of Saab was worthless to GM.

  • Saab were terrible financiers, look at how much they spent re engineering everything that GM sent them.
    I love & miss Saab but they were their own worst enemy

  • To Jonas Nordstrom >
    I’ve done mine, that’s why I can accept that Saab aren’t here today.
    They sucked at running a business & kept over spending when they had nothing.
    If you can’t accept it that your issue

  • To Paul Smythe >
    The MOST missing brand today, in case you have missed that?!
    The cars/inventions was on top in every aspect
    but the board was crap, is another thing.
    You`re not even close to the vicinity of what Saab stod for
    living on the other side of the Atlantic.
    So whom of the engineers have you consulted for
    making your statement?

  • I would bet the threat Saab was to Cadillac was also a factor. Need to get rid of competition for the upcoming ATS release back in the day.

  • Saab was one of many brands stuffed up by GM. They bought Holden in Australia and closed it down. They bought Opel and then sold it. They tried to ram the Chev badge down South Africans throats and that failed. They closed ops in SA. They basically abandoned all Humner, Caddy and Saab customers in SA.

  • TO Samuel Sabo >
    Not Really there’s more Rich People in the world than poor people in the world I own a 2011 Saab 93 convertible turbo 4 I brought it brand new and I still have it and it only has 49100 miles on it and if SAAB stays in business I would brought another one too.

  • TO Samuel Merritt >
    it’s not about the number of rich people, Saab was bleeding money and most rich People went for other Euro brands, I love Saab but what I said is the truth

Leave a Reply