Shared fates - Saab and Olavi J.

Troubled Swedish car manufacturer had production in Finland for 33 years

Olavi J. Mattila

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By Jaakko Lyytinen
     
     
This piece perhaps requires a little by way of background.
      In 1968, Saab-Scania and the Finnish state-owned engineering company Valmet joined forces to create what was then known as Saab-Valmet, with an automobile plant located in Uusikaupunki on Finland's west coast.
      That factory turned out Finnish-made Saabs from 1969 until some six years ago.
      Valmet Automotive, as it now called, still manufactures Porsche cars, and will soon be producing plug-in hybrid and electric vehicles. However, the old Valmet name is long gone, swallowed up into the Metso Corporation when Valmet and Repola merged in 1999.
      Now the Swedish side of that 1960s joint venture is in dire straits, hit by the double-whammy of falling sales and the apparently bottomless debts of Saab's parent, General Motors.
      A few days ago GM went cap in hand to a reluctant Swedish government for funding, but Saab's future - the company has filed for reorganisation, or effectively for bankruptcy protection - is in serious doubt.
      Things were very different in November 1969...
     
     
"This first Finnish-made automobile - EKA-96 - that passes under a triumphal arch as the fanfares ring out is at the same time the harbinger of a new era being ushered in, for in this way Finnish industry has joined hands with the modern international mainstream in yet another field", declared Simo Pasanen, reporting from Uusikaupunki for the Finnish Broadcasting Company on November 13th, 1969.
      From the Saab-Valmet factory in Uusikaupunki, the blue Saab 96 saloon was transported to Helsinki and ceremonially handed over to President Urho Kekkonen at his official residence, Tamminiemi. Kekkonen had been instrumental in getting the automobile plant built.
     
The delegation handing over the keys to the car - though ironically the great man did not actually have a driving licence - was naturally led by Olavi J. Mattila, the Valmet Director-General from 1965-1973.
      Contrary to popular legend, the car given to the President was not in fact the very first manufactured in Uusikaupunki, but the second.
      The factory wanted to be quite sure that Kekkonen got a car that wouldn't fall apart on him or his wife Sylvi.
     
And now that epic narrative of a new era is drawing to an close.
      Saab has filed for reorganisation - in effect for insolvency protection while the company attempts to secure some kind of future for itself, perhaps as an independent entity through an injection of private capital.
      The Swedish firm's American owners General Motors presented a restructuring plan last week in which they said they planned to phase out Saab by 2010.
      The Swedish government have thus far shown little enthusiasm for taking over ownership of Saab, which employs around 4,000 in Sweden, and which posted a loss of SEK 3 billion (roughly EUR 275 million) in 2008. The manufacturer has not been in profit since 2001.
      Saab's direct connection with Finland came to an end back in 2003, when the last Saab Cabriolet rolled off the production line in Uusikaupunki, some 738,000 vehicles after EKA-96.
     
Now the once-proud Swedish icon is threatened with a fate not much grimmer than that which befell Olavi J. Mattila.
      At one time, the Mattila family had six Saabs in the garage. Father Olavi J. was a cabinet minister on several occasions, twice serving as Minister for Foreign Affairs in the early 1970s; he was the boss of a large state-run enterprise, and was known as a huge presence in Finland's lucrative bilateral trade dealings with the Soviet Union.
      Later, however, Olavi J.'s businesses began to grow longer shadows, and eventually he became entangled in dodgy Nigerian investments (presumably an early "419 scam") that brought personal financial ruin and - in 2004 - a 16-month suspended sentence for aggravated fraud.
      When the bailiffs came in to repossess Mattila's property in the 1990s, among the items taken away to meet creditors' claims were a Valmet tractor - and a Saab 9000. Mattila's brand-loyalty held up to the end.
     
"Mattila's career was almost like something out of antique tragedy: after a sluggish beginning he rose into the heights as corporate leader and influential political figure alike, but then he plunged earthwards into shame", is the opening of the entry for Olavi J. Mattila in Kansallisbiografia, an online collection of 6,000 biographies of individuals who have made important contributions to the development of Finnish society.
      Not so very unlike Saab, really.
     
Helsingin Sanomat / First published in print 22.2.2009


Previously in HS International Edition:
  General Motors´ financial woes threatening future of Saab brand (4.12.2008)
  Valmet Automotive plant in Uusikaupunki to hire 150 new employees (26.8.2005)
  Last Saab rolls off a Finnish production line (29.4.2003)

Links:
  Saab Press Statement - general facts of formal restructuring
  Valmet Automotive - History

JAAKKO LYYTINEN / Helsingin Sanomat
jaakko.lyytinen@hs.fi