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.

Tuesday, September 6, 2011

Bankruptcy is not an option

It looks like Saab is in its conclusive days. These are the days that may decide if Saab is to be or not to be. We can't rule out the possibility that Saab can raise the money needed to pay wages and thus prolong the turmoil another fourth night when the September wages are due. But what if they can't raise the money?

One option that has been mentioned to protect the company from creditors if money can't be raised in time is a reconstruction. An option I do not believe in.

Others say that a bankruptcy would be the best option and it would not necessarily mean the end of Saab. But the way I see it a bankruptcy would definitely mean the end of Saab as we know it.

From earlier we know that it is not possible to buy the Saab brand name and the Gripen logo without buying the whole company. So if Saab is to continue after a bankruptcy, someone needs to buy the whole company. But what will the company produce? All three current models (9-3, 9-5, 9-4X) are fully based on technology design and developed under GM or technology sourced from GM.

When Swedish Automobile bought Saab from GM they made contracts by the hundred to regulate and secure the use of GM technology. If Saab and Swedish Automobile go bankrupt, all these contracts will most likely be void. If someone wants to buy Saab and restart production, that someone must make new contracts with GM.

But will GM be willing to make these contracts again? And will GM be willing if the buyer is Chinese or Russian? Or another possible future competitor? Probably not.

And so bankruptcy is no option. A bankruptcy would be the end and not the start of new Saab.

To save Saab the only option is to raise money.