It seems that all labor unions at Saab are reluctant to file for bankruptcy. Most of their members want their employee to survive and ask their unions to give Saab more time.
Representatives of Sveriges Ingenjörer (the union of the engineers, approx. 500 Saab employees) and Ledarna (the union of the managers approx. 130 Saab employees) tells TTELA that they do not want to be the ones who put Saab into bankruptcy.
IF Metall (the blue-collar union with approx. 1,500 of Saab employees) and Unionen (white-collar union with approx. 950 Saab employees) are waiting out the other labor unions.
It is quite clear that noone wants the role of the executioner. But in the end they need to act in order to secure their members wages from the state guarantee. One possible scenario is that all the unions file for bankruptcy in Saab at the same time.
But at the moment it looks like Saab will live for at least a few more days, and hopefully long enough to appeal the District Courts decision from yesterday. The appeal is planned to be filed on Monday.
A blog fueled by enthusiasm about Saab, the greatest car company between the North and the South Pole. And their cars, which probably is the only cars that would start on a cold and crispy South Pole morning.
Friday, September 9, 2011
Talks with Pang Da and Youngman on wages
The Wall Street Journal reports that according to Saab's CEO and Chairman, Victor Muller, there are now talks going on with Chinese partners and investors Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automobile Co. on securing wages to remove the immediate threat of bankruptcy.
"If, for instance, Pang Da and Youngman would be able to pay those funds to the employees or another party, that would change the game, right? That would take away the threats from the unions," Muller said to Dow Jones Newswires.
As far as I can understand neither Saab's current owners nor the Chinese partners and future owners want bankruptcy since there are too much values at stake, and even more important the risk that a bankruptcy will shut down Saab for good.
Question is how much wiggle room do the Chinese companies have before the Chinese authorities puts its foot down.
Chinese companies can not make foreign investmenst without approval from Chinese authorities. According to Victor Muller, the decision from the Chinese authorities concerning Pang Da and Youngman's planned investments in Saab is probably only four to six weeks away. A decision that can secure Saab EUR 245 million and new life. But until then a bankruptcy must be avoided at all cost.
So far the Chinese companies have worked around the rules by paying for cars in advance. Which brings me to next piece of news.
Also in the news from yesterday is a confirmation that Vladimir Antonov owned CPP Global Holdings is still very interested in aquiring the Spyker sportscar marque.
“We signed a memorandum of understanding that has now lapsed but we are still very much committed to the purchase and would very much like to carry on," Jon Chester CPP's product and brand director told Birmingham Post.
The sale of the Spyker sportscar subsidiary was supposed to bring in EUR 15 million to Saab (and EUR 17 million in future profits from Spyker), which is more than enough to cover wages. If this deal can't be followed through immediately, then my suggestion is to put up the Spyker sportscar subsidiary as collateral for another advance payment for cars to China. Or is the problem that the subsidiary has already been used as collateral and thus can not be sold before this plegde is released?
Also worth noting now is that Saab in a press release says that it aims at filing an appeal on the District Court’s decision to reject the reconstruction on Monday. The Court Of Appeal may or may not decide to look at the case. The District Court judges have said that it was a very difficult case and that the ruling wasn't obvious. And from that we can hope that the Court Of Appeal will decide to look at the case and even that it is not obvious that its ruling will be the same as the ruling of the District Court.
"If, for instance, Pang Da and Youngman would be able to pay those funds to the employees or another party, that would change the game, right? That would take away the threats from the unions," Muller said to Dow Jones Newswires.
As far as I can understand neither Saab's current owners nor the Chinese partners and future owners want bankruptcy since there are too much values at stake, and even more important the risk that a bankruptcy will shut down Saab for good.
Question is how much wiggle room do the Chinese companies have before the Chinese authorities puts its foot down.
Chinese companies can not make foreign investmenst without approval from Chinese authorities. According to Victor Muller, the decision from the Chinese authorities concerning Pang Da and Youngman's planned investments in Saab is probably only four to six weeks away. A decision that can secure Saab EUR 245 million and new life. But until then a bankruptcy must be avoided at all cost.
So far the Chinese companies have worked around the rules by paying for cars in advance. Which brings me to next piece of news.
Also in the news from yesterday is a confirmation that Vladimir Antonov owned CPP Global Holdings is still very interested in aquiring the Spyker sportscar marque.
“We signed a memorandum of understanding that has now lapsed but we are still very much committed to the purchase and would very much like to carry on," Jon Chester CPP's product and brand director told Birmingham Post.
The sale of the Spyker sportscar subsidiary was supposed to bring in EUR 15 million to Saab (and EUR 17 million in future profits from Spyker), which is more than enough to cover wages. If this deal can't be followed through immediately, then my suggestion is to put up the Spyker sportscar subsidiary as collateral for another advance payment for cars to China. Or is the problem that the subsidiary has already been used as collateral and thus can not be sold before this plegde is released?
Also worth noting now is that Saab in a press release says that it aims at filing an appeal on the District Court’s decision to reject the reconstruction on Monday. The Court Of Appeal may or may not decide to look at the case. The District Court judges have said that it was a very difficult case and that the ruling wasn't obvious. And from that we can hope that the Court Of Appeal will decide to look at the case and even that it is not obvious that its ruling will be the same as the ruling of the District Court.
Thursday, September 8, 2011
Saab appeals the District Courts rejection of the reconstruction
In this clip from Swedish TV, Saab's CEO Victor Muller says that Saab will appeal the District Court's decision to reject the reconstruction application. He continues saying that in the meantime Saab will stay in close contact with the other stakeholders including labor unions, supplier organizations and investors to make sure nothing will happen. And I assume "nothing will happen" means asking that nobody files for bankruptcy until the appeal is filed and decided by the Appeal Court.
It is very unusual for a district court to reject an application for reconstruction. And even the Minister of Enterprise expressed surprise over the decision:
"It's very unusual for a district court to say no to a reconstruction," Olofsson said to Swedish news agency TT.
When asked if this means the end of Saab, she would not count out Saab just yet.
"No, I wouldn't say that. It is clear that Saab is in a very difficult situation but it's not the first time. It will be decisive what the unions do. It's very troubling when employees do not receive their salaries," Olofsson said.
A tragic situation for Sweden
Earlier today the Vänersborg District Court rejected Saab's application for reconstruction. According to the head of the Swedish Association of Automotive Suppliers (FKG), Fredrik Sidahl, this rejection is a tragic situation for Sweden.
"It's an incredibly tragic situation for Sweden. There is an obvious risk that we lose the momentum we had with both Saab and Volvo," Fredrik Sidahl said to Swedish news agency TT.
Sidahl now believes that Saab is heading for bankruptcy.
"Our members will not receive anything. Everything would have been better than this, now they get nothing, they are last in line," Sidahl said.
This afternoon 500 memebers of the engineers labour union at Saab will vote for or against a bankruptcy filing. From earlier we know that both the blue-collar union IF Metall and the white-collar union Unionen have said that they would file for bankruptcy in case Saab was denied reconstruction.
Tough times ahead...
"It's an incredibly tragic situation for Sweden. There is an obvious risk that we lose the momentum we had with both Saab and Volvo," Fredrik Sidahl said to Swedish news agency TT.
Sidahl now believes that Saab is heading for bankruptcy.
"Our members will not receive anything. Everything would have been better than this, now they get nothing, they are last in line," Sidahl said.
This afternoon 500 memebers of the engineers labour union at Saab will vote for or against a bankruptcy filing. From earlier we know that both the blue-collar union IF Metall and the white-collar union Unionen have said that they would file for bankruptcy in case Saab was denied reconstruction.
Tough times ahead...
Vänersborg District Court disapproves reconstruction application
Vänersborg District Court has just announced that it rejects Saab's filing for reconstruction.
According to the written ruling of the court, there are too much uncertainty in how and if Saab will solve both the short- and long-term funding, and if Saab will be able to restart production and also how much damage the Saab brand has taken. All in the all the court thinks that the conditions for Saab to succeed with a reconstruction is not present.
Saab can however appeal the decision of the District Court to the Court of Appeal for Western Sweden.
This means that at the moment Saab is not protected from bankruptcy and at least two of the labor unions at Saab have said that they will file for bankruptcy if the reconstrcution was not approved. Saab also wrote in the application that filing for bankruptcy may be an option the company itself will resort to.
According to the written ruling of the court, there are too much uncertainty in how and if Saab will solve both the short- and long-term funding, and if Saab will be able to restart production and also how much damage the Saab brand has taken. All in the all the court thinks that the conditions for Saab to succeed with a reconstruction is not present.
Saab can however appeal the decision of the District Court to the Court of Appeal for Western Sweden.
This means that at the moment Saab is not protected from bankruptcy and at least two of the labor unions at Saab have said that they will file for bankruptcy if the reconstrcution was not approved. Saab also wrote in the application that filing for bankruptcy may be an option the company itself will resort to.
Suppliers say reconstruction is a good move by Saab
Yesterday Saab Automobile filed for reconstruction at the Vännersborg district court. The decision of the court is expected today at 14:00 CET. According to Victor Muller, Chairman and CEO of Saab, the company also has a plan if the court decide that Saab will not be allowed reconstruction. But Saab warns in the application that if it is denied reconstruction, the alternative may be bankruptcy.
At a press conference at Saab yesterday, Muller said that the company has EUR 150 million (approx. SEK 1.4 billion) in due debt. That is debt than needs to be paid in order to exit a reconstruction. Saab intend to fully pay all due debt and will not ask for debt to be written down, despite that a reconstruction opens for write down of debt. In total Saab's short-term debt was SEK 6.9 billion at the end of June.
The reconstruction application has gotten support from several stakeholders. The head of Sweden National Debt Office, Bo Lundgren, has said that they support the filing.
"Our assessment is that it's good for Saab to enter into a reconstruction now. From their perspective, it will be good to get a little breathing room and an orderly process. We will not object to the reconstruction and will provide the support we can to whomever the district court appoints administrator, " Lundgren said to Swedish news agency TT.
A previous harsh critic of how Saab has handled the production stop and the dialogue with its suppliers, Lars Holmqvist who is the head of the European Association of Automotive Suppliers (CLEPA), has also expressed optimisme and positivity.
"A bankruptcy is bad for all. The fact that Victor Muller dares to take this step strengthens my confidence in him. The fact that he is willing to allow the company to be scrutinized. If Victor Muller shows the district court what he told me, then a reconstruction should be allowed," Holmqvist told TT.
Holmqvist also expressed support of restart of production at Saab: "If Saab pays its debts, or at least some of them, we will help get production up and running again," Holmqvist said to Dow Jones Newswires.
Also the head of the Swedish Association of Automotive Suppliers (FKG), Fredrik Sidahl, was positive:
"This is a positive thing for our members and I hope the court approves the reconstruction," Fredrik Sidahl told Dow Jones Newswires.
"They must have some kind of plan for how to get Saab out of this crisis and start production again. For the suppliers this is better than bankruptcy, where we end up last in line and get nothing," Sidahl told GP.
The previous head of FKG, Svenåke Berglie, who stepped down from the postion last week after 13 years on the job, even thinks that the suppliers will accept a write down of debt:
"If the alternative is bankruptcy, then I believe they will go along with a write down. To get 20 percent paid is better than getting nothing, which is likely in a bankruptcy, " Svenåke Berglie told Dagens Industri.
But as mentioned, Saab intend to fully pay suppliers.
Of course even the labor unions at Saab are positive to the reconstruction filing. This means that they will get paid and that their employee has a chance of survival.
Now the big question is if the court will allow the reconstruction. The court has not asked for any supplement to the 14 pages reconstruction application handed in yesterday. If the court's decide to approve, then the next big question is if there are any creditors who will object to the reconstruction at the meeting with the creditors which will be held approx. three weeks into the reconstruction. And of course the biggest question of all, can Saab raise enough money during the reconstruction period to survive and convince the creditors that they all have a bright future once the Chinese investments are approved by the Chinese government and finalized.
At a press conference at Saab yesterday, Muller said that the company has EUR 150 million (approx. SEK 1.4 billion) in due debt. That is debt than needs to be paid in order to exit a reconstruction. Saab intend to fully pay all due debt and will not ask for debt to be written down, despite that a reconstruction opens for write down of debt. In total Saab's short-term debt was SEK 6.9 billion at the end of June.
The reconstruction application has gotten support from several stakeholders. The head of Sweden National Debt Office, Bo Lundgren, has said that they support the filing.
"Our assessment is that it's good for Saab to enter into a reconstruction now. From their perspective, it will be good to get a little breathing room and an orderly process. We will not object to the reconstruction and will provide the support we can to whomever the district court appoints administrator, " Lundgren said to Swedish news agency TT.
A previous harsh critic of how Saab has handled the production stop and the dialogue with its suppliers, Lars Holmqvist who is the head of the European Association of Automotive Suppliers (CLEPA), has also expressed optimisme and positivity.
"A bankruptcy is bad for all. The fact that Victor Muller dares to take this step strengthens my confidence in him. The fact that he is willing to allow the company to be scrutinized. If Victor Muller shows the district court what he told me, then a reconstruction should be allowed," Holmqvist told TT.
Holmqvist also expressed support of restart of production at Saab: "If Saab pays its debts, or at least some of them, we will help get production up and running again," Holmqvist said to Dow Jones Newswires.
Also the head of the Swedish Association of Automotive Suppliers (FKG), Fredrik Sidahl, was positive:
"This is a positive thing for our members and I hope the court approves the reconstruction," Fredrik Sidahl told Dow Jones Newswires.
"They must have some kind of plan for how to get Saab out of this crisis and start production again. For the suppliers this is better than bankruptcy, where we end up last in line and get nothing," Sidahl told GP.
The previous head of FKG, Svenåke Berglie, who stepped down from the postion last week after 13 years on the job, even thinks that the suppliers will accept a write down of debt:
"If the alternative is bankruptcy, then I believe they will go along with a write down. To get 20 percent paid is better than getting nothing, which is likely in a bankruptcy, " Svenåke Berglie told Dagens Industri.
But as mentioned, Saab intend to fully pay suppliers.
Of course even the labor unions at Saab are positive to the reconstruction filing. This means that they will get paid and that their employee has a chance of survival.
Now the big question is if the court will allow the reconstruction. The court has not asked for any supplement to the 14 pages reconstruction application handed in yesterday. If the court's decide to approve, then the next big question is if there are any creditors who will object to the reconstruction at the meeting with the creditors which will be held approx. three weeks into the reconstruction. And of course the biggest question of all, can Saab raise enough money during the reconstruction period to survive and convince the creditors that they all have a bright future once the Chinese investments are approved by the Chinese government and finalized.
Wednesday, September 7, 2011
Notes from reconstruction filing
Here are some notes from the application Saab has filed at the Vänersborgs district court:
In the future Saab will develop 1 - 2 new cars each 4 - 6 years. That would imply that each car would live approx 6 years before being replaced.
Also interesting to see that Pang Da did get some collateral for the advance payment they did on the cars which were to be delivered this autumn.
Last but not least, it looks like Saab will do changes to their North American sales. Mike Colleran was replaced with Tom Colbeck earlier this year, and now it also looks like they will do some changes in the way they do business over there.
For the application (in Swedish) and Saab Automobile AB's balance sheet 30 June (in Swedish and English), go here.
The same for Saab Automobile Powertrain AB and Saab Automobile Tools AB.
- New Saab 9-3 expected to be launched during 2013
- 1 - 2 new cars to be developed every 4 - 6 years
- Saab Great Britain used as collateral for Pang Da's payment of EUR 45 million for cars to be delivered this autumn
- Saab expects that a reorganization and integration of vehicle and powertrain development will save 15 - 20 per cent on development costs
- Will conduct a review of the business strategy in the USA, which is not functioning optimal at the moment
In the future Saab will develop 1 - 2 new cars each 4 - 6 years. That would imply that each car would live approx 6 years before being replaced.
Also interesting to see that Pang Da did get some collateral for the advance payment they did on the cars which were to be delivered this autumn.
Last but not least, it looks like Saab will do changes to their North American sales. Mike Colleran was replaced with Tom Colbeck earlier this year, and now it also looks like they will do some changes in the way they do business over there.
For the application (in Swedish) and Saab Automobile AB's balance sheet 30 June (in Swedish and English), go here.
The same for Saab Automobile Powertrain AB and Saab Automobile Tools AB.
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