Saab says it is unable to pay employees
Source: Agencies |
June 24, 2011, Friday
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Print Edition
Print Edition
SAAB'S owner said yesterday it doesn't have the money to pay employees' wages, deepening the financial crisis that is pushing the struggling Swedish brand ever closer to ruin.
Dutch owner Swedish Automobile, previously known as Spyker Cars, has courted Chinese and Russian investors and put the Saab factory up for sale in its attempts to revive the brand it took over from General Motors Co last year.
But after months of production stoppages and problems with paying suppliers, Saab said the situation is so dire that it won't be able to pay its 3,700 employees, adding to doubts over how long the brand can survive.
"I do not see a future for the car maker in the current position," said Ferdinand Dudenhoeffer, an auto analyst at the University of Duisburg-Essen in Germany.
Analysts have sounded the death knell for Saab several times since Spyker, a small luxury sports car maker, bought it from GM last year for US$74 million in cash plus US$326 million worth of preferred shares. Skeptics questioned how Spyker and its smooth-talking CEO Victor Muller could turn around a car maker that posted loss after loss during GM's ownership.
But every time the company appeared to be on the edge of bankruptcy, Muller came up with a new lifeline. His latest move was lining up two Chinese investors - Zhejiang Youngman Lotus Automobile Co and Pang Da Automobile Trade Co - in a deal to make and distribute Saab in China. The deal has not yet been approved by Chinese authorities.
Saab spokesman Eric Geers insisted the car maker is not headed for bankruptcy.
"We're saying that we don't have funding to pay out salaries, but we're working day and night to find a solution," he said. "We're assuming we'll find a solution."
Swedish Automobile said it is currently in talks with various parties to solve the financial difficulties, but warned that there can be "no assurance that these discussions will be successful, or that the necessary funding will be obtained."
Hakan Skott, a local union boss at the plant in Trollhattan, said the situation "is creating a lot of worries."
Dutch owner Swedish Automobile, previously known as Spyker Cars, has courted Chinese and Russian investors and put the Saab factory up for sale in its attempts to revive the brand it took over from General Motors Co last year.
But after months of production stoppages and problems with paying suppliers, Saab said the situation is so dire that it won't be able to pay its 3,700 employees, adding to doubts over how long the brand can survive.
"I do not see a future for the car maker in the current position," said Ferdinand Dudenhoeffer, an auto analyst at the University of Duisburg-Essen in Germany.
Analysts have sounded the death knell for Saab several times since Spyker, a small luxury sports car maker, bought it from GM last year for US$74 million in cash plus US$326 million worth of preferred shares. Skeptics questioned how Spyker and its smooth-talking CEO Victor Muller could turn around a car maker that posted loss after loss during GM's ownership.
But every time the company appeared to be on the edge of bankruptcy, Muller came up with a new lifeline. His latest move was lining up two Chinese investors - Zhejiang Youngman Lotus Automobile Co and Pang Da Automobile Trade Co - in a deal to make and distribute Saab in China. The deal has not yet been approved by Chinese authorities.
Saab spokesman Eric Geers insisted the car maker is not headed for bankruptcy.
"We're saying that we don't have funding to pay out salaries, but we're working day and night to find a solution," he said. "We're assuming we'll find a solution."
Swedish Automobile said it is currently in talks with various parties to solve the financial difficulties, but warned that there can be "no assurance that these discussions will be successful, or that the necessary funding will be obtained."
Hakan Skott, a local union boss at the plant in Trollhattan, said the situation "is creating a lot of worries."
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