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 23, 2011

Saab not able to pay wages

In a press release issued this morning Swedish Automobile (previously known as Spyker Cars) announced that Saab Automobile is not able to pay wages to the employees. Here's the full press release:

Trollhättan, Sweden: Swedish Automobile N.V. (Swedish Automobile, formerly Spyker Cars N.V.) announces that Saab Automobile AB (Saab Automobile) will be unable to pay the wages to employees as it has not yet obtained the necessary short-term funding. Swedish Automobile and Saab Automobile are in discussions with various parties to obtain short-term funding, including via the sale and lease-back of the real estate of Saab that was announced previously, and with their financiers in connection with current financing arrangements. These discussions are ongoing. There can however be no assurance that these discussions will be successful or that the necessary funding will be obtained.
Saab Automobile has ongoing negotiations with suppliers in reaching agreement on the terms of payments in order to resume an orderly inflow of parts and components.

Swedish Automobile will update the market of any new developments.

The wage stop will first affect 1,400 - 1,500 Saab employees organized in unions which has entered collective agreements with the employer. These employees were to be paid wages before the coming weekend. The remaining employees at Saab are supposed to be paid wages on Monday, but if no short-term funding is secured by then, they will not receive their wages either.

According to Swedish Radio, what happens now is that the union's central organization will send a payment request to Saab. Saab will have seven days to respond. If Saab then can not pay wages, the union will have to make a decision on filing for bankruptcy in Saab or not.

The latest development is a clear sign that Saab is more or less out of cash. If the property sale or any other short-term funding isn't secured within days, then it's most likely over for Saab. But I will ask you to not lose hope just yet. Saab has been written off many times before and still managed to find a solution in the end. So keep the faith that the management of Saab and Swedish Automobile can get Saab out of the latest fix!