IMPORTANT NEWS: National Electric Vehicle Sweden has agreed to buy the assets of Saab Automobile and the sale is expected to be finalized during the summer.

Thursday, June 9, 2011

Production temporarily suspended pending stable supply of parts

After this week's stops and starts at Saab's manufacturing plant in Trollhättan, Saab has just issued a press release telling us that they have decided to stop the production until parts and materials from the suppliers once again is flowing without major delays.

Chairman and acting CEO of Saab Automobile, Victor Muller, says the following in the press release:

“We anticipated that we would not see a smooth inflow of supplies as from the day we restarted production, May 27th, and communicated that in our press release of that day. We have a few thousand suppliers worldwide with each of whom we have to reach acceptable terms and conditions to resume production of parts and subsequent deliveries. Many suppliers are located outside Europe and re-stocking inevitably takes time."

“Thus far we have reached agreements with the vast majority of our suppliers and we are confident that we will reach agreement with all remaining suppliers in the coming days, thereby stabilizing our operations and our production in particular. However, it is not to be excluded that we will see production hiccups in the near future until the supply chain is fully back to normal. I reiterate our appreciation for our suppliers who are working with us constructively to come to terms and put our production back on track. At this moment, we have almost 10,000 orders on hand, including those for the Saab 9-4X which is currently being built in Mexico.”

So did Saab just restart the production too soon, as the suppliers which also had stopped their production for Saab during the seven weeks Saab's production was stopped, also need to get their production going before a stable flow of parts and materials can restored? Or is this an indication that some suppliers are reluctant to deliver to Saab under the current circumstances with the continued uncertain financial postion for Saab?