Saab in the proverbial yet again – lacks funds to pay workers
Despite the recent major deals with Youngman and also Pangda Saab has advised its workers that they may not get paid this month due to a lack of funds in the Swedish company’s kitty. The deals with Pangda gave the company a brief loan of 30 million Euros which likely wasn’t enough to satisfy the demands of its suppliers and its workforce, which lead to questions about Pangda’s potential loss of 30 million Euro’s in the next few days. The recent deal with Youngman has not yet received official government approval so it maybe some while before Saab’s top brass see their pay checks.
From Local.Se:
“It is dreadful. Completely unbelievable. I get chest pains. How on earth are we supposed to pay our bills?,” said Fredrik Almqvist, employee of Saab since 16 years to news agency TT.
When Almqvist woke up on Thursday morning, a text message from a colleague alerted him to the fact he would not receive any wages.
He ran downstairs, turned on the TV and read on tele-text that Saab won’t be able to pay their employees.
“It is regrettable to have to notify staff of this the day before midsummer,” said Gunilla Gustavs of the information department at Saab Automobiles to news agency TT.
According to Gustavs it is impossible to say when wages could be paid out to Saab personnel.
“It is impossible to make any sort of forecast, except to repeat that the company is trying to solve this as quickly as possible,” aud Gustavs to TT.
The information reached Saab employees via email on Thursday morning.
“It has been sent to all employees notifying them that the company is late with payments,” confirmed Sten M Larsson, deputy head of trade union Unionen to TT.
And the worker’s trade union IF Metall are worried. The late payment will affect between 1,400 and 1,500 of the union’s members at Saab.
“Of course it is in no way positive that the company has got in such a pickle that they can’t pay wages to their employees,” said Häkan Skött, of the Metall union to TT.
Svenåke Berglie, chairman of FKG, the trade association representing Scandinavian suppliers to the automotive industry, told TT that this shows just how desperate Saab’s situation is.
“It is very worrying that they can’t even give a prognosis. they should be able to say when it will be dealt with, if it is this afternoon or tomorrow,” Berglie told TT.
Recently Saab’s Dutch owner Spyker announced it planned to hand over majority control of Saab to two Chinese companies, distributor Pang Da Automobile and car manufacturer Zhejiang Youngman Lotus Automobile, in a bid to secure last-ditch rescue funding.
While observers hailed the deal, which also boosted Spyker’s share price, they cautioned it might not go through quickly enough to secure the desperately-needed short-term cash Saab needs to stay afloat.
Saab, which employs 3,800 people, was rescued at the last minute in early 2010 when tiny Dutch company Spyker bought it for 400 million dollars from US auto giant General Motors.
After initial optimistic statements and production forecasts, Spyker and Saab have recently been scrambling to pull together enough cash to keep production going and suppliers happy.
Saab’s main factory stood still for over seven weeks during April and May as suppliers halted their deliveries to Saab over unpaid bills.
Production started up again on May 27 but stopped again on June 8 when the company complained it was missing components for the assembly line.
Assembly line workers were informed in a meeting on Monday that they would not be needed back at work until Monday, July 4.
According to the latest Saab statement, the company is in talks with several different parties in order to raise the cash both in the short run and through property sales and leasing.
According to the Saab statement there are no guarantees as of yet that these discussions will prove successful enough to result in more money.
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Here in the US, smaller Saab dealers have been closing down since the first of the year. It’s not a panic meltdown, but it’s happening slowly. Of greater concern, genuine Saab parts are becoming very hard to find at some dealerships, and there is no word on when more parts will be available. Dealers make a high percentage of their profits from parts and service, so this is an additional burden for dealers who are already finding it hard to sell new Saabs because of all the negative news. By not successfully addressing the short term financial situation, Muller has not only put the future in jeopardy, but has made it harder for Saab dealers to remain viable.
It has been reported that Muller has tried many avenues to secure short term funding, and his deals with Chinese companies may have been confidence building attempts to secure those funds. But while some have been willing to invest in Saab’s future, no one has been willing to invest in their “here and now”. Something is very strange about this situation, and now it’s reported that Muller is in the US to have talks with former owner, GM.
Tune in tomorrow for the next exciting episode of “What will Youngman & Pangda actually get?”
Saab 9-3 parts will never be in short supply, that car has been in production since pre-historic times.
I think it’s time for Saab to give up the ghost. Saab cars have not sold well worldwide for a number of years. If GM couldn’t make a profit, how did Spyker think they could turn around the company in a year. There are no magic tricks left for Victor Muller. If the employees are not paid, the unions will force bankruptcy. Saab sales in the US are dismal – even the new 9-5. There are many Saab dealers going out of business and the ones who survive are still not able to sell the cars sitting on their lots. I own two Saabs and want them to suceed. But, I think Saab’s days are over.