Saab runs out of cash to pay wages
Saab, the Swedish car company renowned for its sometimes quirky designs, moved closer to bankruptcy Thursday after it conceded that it didn't have any money to pay employees' wages.
After months of production stoppages and problems with paying suppliers, Saab said the situation is so dire that it won't be able to pay its 3,700 employees, raising doubts over how long the brand can survive.
Its Dutch owner Swedish Automobile, previously known as Spyker Cars, has courted Chinese and Russian investors and put the Saab factory up for sale in its attempts to revive the brand it took over from General Motors Co. last year.
Analysts said the future for the company was very bleak indeed.
"I do not see a future for the car maker in the current position," said Ferdinand Dudenhoeffer, an auto analyst at the University of Duisburg-Essen.
Saab has been fighting for its survival since Spyker, a small luxury sports car maker, brought it out of liquidation. Skeptics questioned how Spyker and its smooth-talking CEO Victor Muller could turn around a car maker that posted loss after loss during GM's ownership.
But every time the company appeared to be edging toward bankruptcy, Muller came up with a new lifeline. His latest move was lining up two Chinese investors — Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co. — in a deal to make and distribute Saab in China. The deal hasn't been approved by Chinese authorities.
Saab spokesman Eric Geers insisted the car maker is not headed for bankruptcy.
"We're saying that we don't have funding to pay out salaries, but we're working day and night to find a solution," he said. "We're assuming we'll find a solution."
Swedish Automobile, the name that Spyker adopted this month, said it's in talks with various parties to solve the financial problems, but warned that there can be "no assurance that these discussions will be successful, or that the necessary funding will be obtained."
If Saab doesn't find a solution, its employees could ask a court to declare the company bankrupt in order to activate a government salary guarantee, said Peter Torngren, a lawyer who led Saab's liquidation process before Spyker bought the brand. He is no longer involved with Saab.
The IF Metall metalworkers union, which represents 1,500 Saab employees, will send a written request for payment on behalf of its members, demanding Saab to "react" within seven days, union spokeswoman Lisa Wernsted said. She wouldn't say what the next step would be if Saab still declines payment.
"That is a decision we will have to take if we come to it," she said. Yahoo/AP