Economy

Saab's New Chinese Boss, And A Vision For An Electric Car Future

Jiang Dalong beat out a dozen competitors to win a bid to takeover failed Swedish carmaker Saab. Having made his millions in renewable energy, Jiang talks to Caixin about Saab's (green) road back from the dead.

Will Jiang Dalong save Saab? (FaceMePLS)
Will Jiang Dalong save Saab? (FaceMePLS)
Liang Dongmei and Pu Jun

In March of this year, Jiang Dalong was chatting with a Swedish cab driver all the way to downtown Stockholm from the airport. He asked the driver: "Which car do you consider to be the world's best?" The driver paused and answered: "The Saab. But the company has gone bankrupt. Every time I think about it, I feel so sad."

And then without being able to control his emotion, the driver asked to stop the car at the roadside. Choked up, he declared that Swedes like him would be grateful to "whoever could bring Saab back to life."

Jiang asked what the cabbie thought was the best road to that rebirth.

"Not a car that uses gasoline," he said. "It has to take a special path."

It was just a few days before this conversation that Jiang had submitted his bid to acquire the Swedish company. "I thought, were I ever given the chance, I'd never let them down," he recalled in a recent interview with Caixin.

Jiang Dalong is the president of National Electric Vehicle Sweden AB (NEVS) a company formed in May in Sweden with the specific intention of acquiring SAAB Automobile AB from its bankrupt holding.

On June 13, the deal was signed between Saab's liquidator and NEVS. NEV Sweden is owned by National Modern Energy (51%), a Hong Kong-based energy company with operations in China, and Sun Investment (49%), a Japanese investment firm.

At the press conference following the announcement of the takeover, Jiang told reporters that his plan is to build only pure electric vehicles.

Another chance for Saab

In early 2009, due to the financial deterioration of its parent company, General Motors, Saab was placed on the road of no return. It was sold twice before it embarked on insolvency proceedures. During this process, several Chinese companies lacking certain core technologies in car manufacturing competed for Saab, and all failed. They were not alone, as offers from other car companies from various countries were rejected because General Motors, the major supplier of Saab's parts and owners of its major intellectual properties, opposed the sales, an industry source told Caixin.

The reason why GM opposed the other Chinese deals is very clearly known. It does not want to foster a new competitor in China. The NEV's clean energy background therefore makes it distinctly different from the others.

"I was still not sure of making it until the last moment. Our bidding price was not high, nor did we have car industry experience. At the peak there were as many as 13 big multinationals in the competition," Jiang said.

"We are very careful with every penny we spend. No business class, no luxurious hotels, no brand-name lawyers," Jiang went on, pointing out that he didn't even hire a mergers and acquisitions adviser.

The success of his bid obviously surprised a lot of people in the automobile industry. So how did Jiang make it? In his own words: "Because our operation in the field of biomass power generation is highly esteemed. Our approach has been recognized."

An industry source analyzed that Jiang's acquisition coincides with a new energy boom at home and abroad. He is trying to build up a green industrial chain that runs through power generation, electricity transmission, and the use of electricity. The electric vehicle is downstream in this chain. The transition of the Saab is basically "a traditional shell coupled with a new energy source."

Jiang didn't deny that the Saab transaction amounted to $250 million dollars, as rumored, merely saying that he had agreed not to reveal this information. The scope of the purchase covers Saab's major assets including Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB, as well as the Saab factory.

Nevertheless, the rights to use the name Saab, a key point, has not yet been granted. Not insisting on this actually contributed to striking the deal, although negotiations continue. "I'm sure all parties will eventually find the right solution," says Jiang.

An industry source pointed out that the fact that the trademark is not included in the acquisition, even though NEV wants to use the name, means it will probably have to pay tens of millions of dollars each year.

An electric future?

The majority of people who have been engaged in electric car development are not so optimistic about Jiang's move. The clean energy companies, such as biomass power generation and energy storage, in which Jiang invests have shown poor profitability up to now. At the same time, he will need to make huge investments in research and development for the electric car.

Because of GM's refusal to license the technology in the Saab 9-5 and 9-4X models, NEV has bought only the 9-3 model. Saab Automobile Parts AB is not included in the acquisition either since GM possesses most of its intellectual property.

However, Jiang is confident about the future prospects of the electric car market. He showed Caixin reporters a McKinsey industry research report that says that by 2020 there will be over 200 million cars in China. This means the fuel they will need is equal to the total global oil production. "Traditional cars are certainly not going to be sustainable. So we bought Saab and we will transit from its current 9-3 version to an electric version, then we will develop the Chinese market where the huge potential lies," Jiang stated.

In Jiang's viewpoint, "Saab's origin as an airplane manufacturer means it's very specialized in the technology of lightweight construction and security. Thus is precisely what the future electric car needs."

But automobile professionals believe that neither the technology nor the market for electric cars are mature yet. The typical proof is that up to today none of the world's car manufacturers have been able to mass produce an electric vehicle, unable to resolve issues around safety, driving range and charging convenience.

However, Jiang is confident. "Ten years ago, many people also questioned and opposed the idea of biomass power generation, but we made it." He said that since late 2006 National Bio Energy, over which he presides, has benefited tens of millions of farmers, and has accumulated more than 6 billion RMB ($944 million) of cash by producing grid power.

Jiang, who believes that electric cars will start turning profits within 10 years, emphasized the social responsibility of an entrepreneur. "If you do the responsible thing," he said, "profit will come sooner or later."

Read the original article in Chinese.

Photo - Flickr/FaceMePLS

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Society

The Food Truck, A Sign That The White And Wealthy Are Moving In

In San Diego, California, a researcher tracked how in the city's low-income neighborhoods that have traditionally lacked dining options, when interesting eateries arrive the gentrification of white, affluent and college-educated people has begun.

Balboa Park Spring Fling Food Truck festival

San Diego Food Trucks via Facebook
Pascale Joassart-Marcelli

SAN DIEGO — Everybody, it seems, welcomes the arrival of new restaurants, cafés, food trucks and farmers markets.

What could be the downside of fresh veggies, homemade empanadas and a pop-up restaurant specializing in banh mis?

But when they appear in unexpected places – think inner-city areas populated by immigrants – they're often the first salvo in a broader effort to rebrand and remake the community. As a result, these neighborhoods can quickly become unaffordable and unrecognizable to longtime residents.

An appetite for gentrification

I live in San Diego, where I teach courses on urban and food geographies and conduct research on the relationship between food and ethnicity in urban contexts.

In recent years, I started to notice a pattern playing out in the city's low-income neighborhoods that have traditionally lacked food options. More ethnic restaurants, street vendors, community gardens and farmers markets were cropping up. These, in turn, spurred growing numbers of white, affluent and college-educated people to venture into areas they had long avoided.

This observation inspired me to write a book, titled The $16 Taco, about how food – including what's seen as "ethnic," "authentic" or "alternative" – often serves as a spearhead for gentrification.

Take City Heights, a large multi-ethnic San Diego neighborhood where successive waves of refugees from places as far away as Vietnam and Somalia have resettled. In 2016, a dusty vacant lot on the busiest boulevard was converted into an outdoor international marketplace called Fair@44. There, food vendors gather in semi-permanent stalls to sell pupusas, lechon (roasted pig), single-sourced cold-brewed coffee, cupcakes and tamarind raspado (crushed ice) to neighborhood residents, along with tourists and visitors from other parts of the city.

Informal street vendors are casualties.

A public-private partnership called the City Heights Community Development Corporation, together with several nonprofits, launched the initiative to increase "access to healthy and culturally appropriate food" and serve as "a business incubator for local micro-entrepreneurs," including immigrants and refugees who live in the neighborhood.

On paper, this all sounds great.

But just a few blocks outside the gates, informal street vendors – who have long sold goods such as fruit, tamales and ice cream to residents who can't easily access supermarkets – now face heightened harassment. They've become causalities in a citywide crackdown on sidewalk vending spurred by complaints from business owners and residents in more affluent areas.

This isn't just happening in San Diego. The same tensions have been playing out in rapidly gentrifying areas like Los Angeles' Boyle Heights neighborhood, Chicago's Pilsen neighborhood, New York's Queens borough and East Austin, Texas.

In all of these places, because "ethnic," "authentic" and "exotic" foods are seen as cultural assets, they've become magnets for development.

Food vendor at outdoor international marketplace called Fair@44.

Fairat44 via Instagram

A call for food justice

Cities and neighborhoods have long sought to attract educated and affluent residents – people whom sociologist Richard Florida dubbed "the creative class." The thinking goes that these newcomers will spend their dollars and presumably contribute to economic growth and job creation.

Food, it seems, has become the perfect lure.

It's uncontroversial and has broad appeal. It taps into the American Dream and appeals to the multicultural values of many educated, wealthy foodies. Small food businesses, with their relatively low cost of entry, have been a cornerstone of ethnic entrepreneurship in American cities. And initiatives like farmers markets and street fairs don't require much in the way of public investment; instead, they rely on entrepreneurs and community-based organizations to do the heavy lifting.

In City Heights, the Community Development Corporation hosted its first annual City Heights Street Food Festival in 2019 to "get people together around table and food stalls to celebrate another year of community building." Other recent events have included African Restaurant Week, Dia de Los Muertos, New Year Lunar Festival, Soul Food Fest and Brazilian Carnival, all of which rely on food and drink to attract visitors and support local businesses.

Meanwhile, initiatives such as the New Roots Community Farm and the City Heights Farmers' Market have been launched by nonprofits with philanthropic support in the name of "food justice," with the goal of reducing racial disparities in access to healthy food and empowering residents – projects that are particularly appealing to highly educated people who value diversity and democracy.

Upending an existing foodscape

In media coverage of changing foodscapes in low-income neighborhoods like City Heights, you'll rarely find any complaints.

San Diego Magazine's neighborhood guide for City Heights, for example, emphasizes its "claim to authentic international eats, along with live music venues, craft beer, coffee, and outdoor fun." It recommends several ethnic restaurants and warns readers not to be fooled by appearances.

Longtime residents find themselves forced to compete against the "urban food machine"

But that doesn't mean objections don't exist.

Many longtime residents and small-business owners – mostly people of color and immigrants – have, for decades, lived, worked and struggled to feed their families in these neighborhoods. To do so, they've run convenience stores, opened ethnic restaurants, sold food in parks and alleys and created spaces to grow their own food.

All represent strategies to meet community needs in a place mostly ignored by mainstream retailers.

So what happens when new competitors come to town?

Food vendor at outdoor international marketplace called Fair@44.

Fairat44 via Instagram

Starting at a disadvantage

As I document in my book, these ethnic food businesses, because of a lack of financial and technical support, often struggle to compete with new enterprises that feature fresh façades, celebrity chefs, flashy marketing, bogus claims of authenticity and disproportionate media attention. Furthermore, following the arrival of more-affluent residents, existing ones find it increasingly difficult to stay.

My analysis of real estate ads for properties listed in City Heights and other gentrifying San Diego neighborhoods found that access to restaurants, cafés, farmers markets and outdoor dining is a common selling point. The listings I studied from 2019 often enticed potential buyers with lines like "shop at the local farmers' market," "join food truck festivals" and "participate in community food drives!"

San Diego Magazine's home buyer guide for the same year identified City Heights as an "up-and-coming neighborhood," attributing its appeal to its diverse population and eclectic "culinary landscape," including several restaurants and Fair@44.

When I see that City Heights' home prices rose 58% over the past three years, I'm not surprised.

Going up against the urban food machine

Longtime residents find themselves forced to compete against what I call the "urban food machine," a play on sociologist Harvey Molotch's "urban growth machine" – a term he coined more than 50 years ago to explain how cities were being shaped by a loose coalition of powerful elites who sought to profit off urban growth.

I argue that investors and developers use food as a tool for achieving the same ends.

When their work is done, what's left is a rather insipid and tasteless neighborhood, where foodscapes become more of a marketable mishmash of cultures than an ethnic enclave that's evolved organically to meet the needs of residents. The distinctions of time and place start to blur: An "ethnic food district" in San Diego looks no different than one in Chicago or Austin.

Meanwhile, the routines and rhythms of everyday life have changed so much that longtime residents no longer feel like they belong. Their stories and culture reduced to a selling point, they're forced to either recede to the shadows or leave altogether.

It's hard to see how that's a form of inclusion or empowerment.The Conversation

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Pascale Joassart-Marcelli is a Professor of Geography and Director, Urban Studies and Food Studies Programs at San Diego State University

This article is republished from The Conversation under a Creative Commons license. Read the original article.


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