McDonalds

(originally aired August 18, 2011)

From a Saab Dealership point of view...

If McDonald's corporate stopped making burgers but kept invoicing (charging) independent McDonald's franchisee's for cardboard burger boxes, paper cups, napkins, advertising fees, and facility upgrades, I suspect McDonald franchisees would rally together, hire an attorney and sue the parent company for breach of their franchise agreement.

If the CEO of McDonald's stated McDonald's indeed had a fully funded business plan (three times) when in fact they didn't, I suspect McDonald franchisees would rally together, hire an attorney and sue the parent company for breach of fiduciary responsibility and reliance.

In essence that's life of a Saab dealer today, however in this story Saab dealers do nothing.

-------

A major problem with Muller's Saab is the organization itself. Muller's "leadership team" followed bad habits learned from larger car companies. Mile high dealer objectives, monthly dealer invoicing, poor communications and departmental walls reflect the culture / habits of GM, designed with a focus of selling millions of cars.. not 3,000 Saabs. Examples:

GM styled product offerings - Lets look at Saab's new product offerings. The new 9-5 and 9-4X, designed by former GM employees, reflects a mindset of carlines selling in the the tens of thousands - rather than one hundred. Both the new 9-5 and 9-4 offer a ridiculous high matrix of trim and option packages typically found in Chevy and Buick showrooms.

GM type push for special tools and launch parts - Once again following the mind set of GM, the new Saab organization delivered to its sleepy dealers tens of thousands of dollars in 9-5 and 9-4X spare parts and special tools (how about a $12,000 engine support stand for the 9-5!).

GM Type facility standards - Following GM's "you should be thankful your still a dealer feeling," Saab requested its dealers volunteer thousands of dollars in facility updates ("ice block" building designs) at the same time Saab is not producing cars?

This nonsense doesn't happen by accident, it happens because no one asked the hard question:

What are we doing? and Why?

At minimum, Saab Corporate should have treated their dealers at a graduate level - reducing the financial burdens of keeping Saab dealerships open during these turbulent times. Deferring or suspending all dealer invoicing for items as i.e., Saab cups, plates and paper napkins would have been a great start.

Franchise Agreements and state laws are in force to protect dealership rights. Now facing closure, Saab dealers are left holding large inventories of new cars, parts and special tools.

But no one speaks.

Not Saab's dealer council. Not NADA. Not AIADA. Saab dealers are united... their passiveness during difficult times was truly amazing.

Muller's Wind Tunnel

(originally aired August 1, 2011)

Saab Vs. A Wind Tunnel

Back in January 2010 - Victor Muller stated he purchased Saab for the price of a wind tunnel. Once the purchase of Saab was completed, Muller proudly stated "Saab didn't need one new customer," meaning, if former Saab owners purchased new Saab's, the new organization could easily sell over 100,000 units.

The first time I heard these comments I was really taken back. Was this Muller's 15 minutes of fame speech? or ... was he indeed serious?

Prior to Saab's death in December 2009, Muller was impressed by the thousands of Saab owners gathering in support of saving Saab. 18 months later Saab owners have made it very clear.. they are not impressed.

--------

Assembly plants idle since April, Muller’s Saab is rushing to fill 11,000 orders.

Why?

Exception to the already funded China orders... why the rush to build cars people are not buying? It's estimated the US has an 11 month supply of unsold (new) 9-5 Sedans with MSRP's ranging from low $40's to upper $55's. There are thousands of 9-5 brake rotors collecting rust at US ports as well.

The all new 9-5 may have looked great on consolidated balance sheets (at inflated MSRP’s) but the true cost of sale per unit is likely close to $15,000 per copy (and this doesn’t include the cost of advertising per car sold). The consumer (and current Saab owners) have spoken, they don't want a GM based 9-5 sedan.

The same is unfolding with the all new 9-4X, without launch support to attract "conquest buyers" the carline is failing.

Its fair to say Muller worked very hard, doing wrong things, very well.

* Rush to place GM employees in key executive roles during critical start up periods.

* Rush to embrace Koenigsegg's business plan without proper due diligence.

* Rush to the media without a convincing plan for the brand - to the press and general public.

* Rush to jettison Born from Jets (top 6th recalled automotive slogan) and launch a internally defended global marketing campaign "move your mind."

* Rush to pretend to be an environmentally focused brand without products to back it up.

* Rush to build GM based 9-5’s without defining its need and audience.

* Rush to build the multi million dollar Phoenix project (abandoning the award winning Aero X).

* Rush to build GM based 9-4X without defining its real need and audience.

* Rush to build GM based 9-5 Wagon (segment so thin.. US sales are likely less than 50/month).

* Rush to burn cash without managing the rear view mirror (wholesale and revenue plans).

* Rush to build 11,000 cars with no market demand or retail support.

Unfortunately Muller's Saab is just about finished. There is no saving Saab this time around, and I'm not sure if there is anything left of the brand to save any longer.

Hopefully when its all said and done, and the factory is turned into a freight train assembly plant, someone will purchase the Saab logo and start something up again just for fun.

Pity dealers who have inventory, loyal employees, customers needing warranty repairs and Swedish Govt & EIB who were taken by Muller's salesmanship.

Creditably shattered but not defeated, Muller now eyes the wind tunnel.

Blog Continues

While on air last week a caller asked why I haven't kept up on my blog? So that being said.. I'm back, I will try and update weekly radio show topics and thank you dear caller for the reminder.

Robb

UBER rich

And now the Wall Street automotive report, sponsored by Country Saab.

Al Gore started it, Bush approved it and Obama signed it.

Last week, the US government approved a $528 million loan from the U.S. Energy Department to Fisker Automotive Group, a start up automotive company based in California.

The car Americans are investing in costs $89,000, reach top speeds over 150MPH and go 330 miles without a charge.

A Toyota Prius for the UBER rich.

Production is being planned in Finland some 4200 miles away from Washington DC.

But no worries folks, the 528 million are part of the billions in TARP funds we put on the coffee table sometime last November.

They say good things happen to those that show up... Fisker wasted no time, with check in hand even Walt Disney couldn’t top the joy Fisker executives experienced on their way home.

This is Robb LoForese

WTBQ - "Our Town" Morning Show

Weekly WSA Feature - Each morning on WTBQ 1110AM and 99.1 FM

October 13, 2009

V.O.> Robb

And now the wall street automotive report sponsored by Country Saab of Orange County

What’s in a number? Well if you’re in the auto industry… numbers (after great products) are really all you have..

Over the next few weeks, Ford Motor Company will announce its 3rd quarter results … and guess what ..

Ford’s numbers will be very strong.

That’s because a few years ago.. Ford’s great grandson hired Alain Mulany as his CEO and unlike many CEO’s on Wall Street; Mr. Mulany did exactly what Chief Executives are paid to do…

Improve the numbers.

And he’s just getting started…

In the past investors talked of “blue chip” stocks, however today you would be hard pressed to find any formal definition..

So please let me provide one.

Blue Chip..

Defined within a Big Blue Oval,

Called Ford Motor Company.

This is Robb LoForese

Executive Over-Exposure Takes Its Toll

Similar to x-rays, executive over-exposure can kill you.

Some executives know how to limit their time under the guy while others simply bask in the problems. Blame it on incompetent corporate communications, over-whelming personal ambitions, miss-trust of those around you or money, eventually the traffic in the rear view mirror becomes such a distraction, you simply can’t drive forward.

When is it time to step down? When an executive is so over-exposed, their sheer presence fails to project the confidence needed to impact the organization any longer.

Sadly however, beyond the satisfaction of “got ya” by those not supported, it hurts the organization for the simple reason it most likely took him/her so dam long to get there in the first place.

But real talent knows when its time to step aside and let others carry on. Bill Ford comes to mind as a leader whose vision is indeed ahead of whatever title he holds. Having stepped aside as President / CEO, Mr. Ford is much more effective implementing strategies that go way beyond a daily sales pace.

Finally the reward for stepping down becomes personal, the hope that younger executives you created along the way learn something from your courage and isn’t that what leadership is all about on the upper floors.

Updates

Press Release - January 3, 2009 - Immediate release - The Times Herald Record, NY Times, Automotive News, MSNBC (web casts).

The Wall Street Automotive Report daily format.

Robb LoForese, editor/publisher - The Wall Street Automotive Report, will be broadcasting each mornings on WTBQ, NY Radio 1110AM / 99.1 FM on "Our Town" morning show. Robb LoForese states "The Wall Street Automotive Report segment will feature up to date news and developments on the Auto Industry - from the Board Room - down to the car in your driveway."

Additionally Robb LoForese has teamed with Scott Valenti, an Investment Advisor creating a new radio show called "Wall Street, Main Street, Your Driveway" a full one hour news format, Saturday's 4PM - WTBQ, NY Radio 1110AM / 99.1 FM. Sponsors include Country Saab of Orange County and PKS Investments.

Contact Robb LoForese, WTBQ Studio 845-651-1110 or Rloforese@msn.com