Saab parent Swedish Automobiles has found another financial lifeline in China as the struggling carmaker faces possible legal action from unions over unpaid wages.
In a statement this morning, Swedish Automobiles announced that an un-named Chinese firm has placed an order for 582 Saab vehicles, valued at 13 million Euro (£11.5m) with full pre-payment ‘expected to be made this week’. Saab plans to use the funds to pay wages and begin partial payments to component suppliers in order to restart production.
Saab’s financial crisis: the current situation.
Last week, CAR reported on Saab’s inability to pay wages, with trade union IF Metall considering legal action that could lead to Saab’s forced bankruptcy.
Over the weekend, Swedish real estate firm Hemfosa has confirmed to Reuters news agency that it is ready to complete a lease-back sale transaction for Saab’s property, but that the deal was hampered by Saab’s ability to secure lease funds from its EIB loan, and Chinese partners Pang Da Automobile Trading and Zhejiang Youngman Lotus Automobile Co.
Saab’s general counsel, Kristina Geers, stepped down from Saab’s board on 23 June, followed by union representatives Hakan Skott (IF Metall) and Annette Hellgren (Unionen) over the weekend. Victor Muller is now the sole member of Saab’s board of directors.
Where does this leave Saab now?
In this morning’s statement, Victor Muller says, ‘I am pleased to announce this agreement, as it secures part of the necessary short-term funding for Saab Automobile and allows us to pay our employees’ wages before the end of this month. The management of Saab Automobile is deeply committed to the company and its employees. I respect the decision of the union members to resign from the board of Saab Automobile. We very much regret the current cash shortage which is causing undeserved hardship to all and we are working relentlessly to resolve the current situation. We hope to secure additional short-term funding, necessary to reach agreement with all of our suppliers to restart production, soon.’
Muller also mentioned the continued presence of thwarted Russian investor Vladimir Antonov: ‘Mr. Vladimir Antonov’s interest in participating as an investor/financier in Swedish Automobile remains unwavering, but he is still awaiting a decision on his clearance from parties at interest following the Swedish National Debt Office (NDO) recommendation to clear him over 8 weeks ago. Once clearance has been obtained, Mr. Antonov can provide much needed financing and/or capital to Swedish Automobile/Saab Automobile at this critical time. We are pushing hard to obtain this vital clearance as soon as practically possible’
The next step will be whether Saab’s unions accept this latest update on unpaid wages, or proceed with a formal reminder notice to demand payment. CAR continues to monitor the situation and will report further updates as the situation develops.
>>Has Saab stopped short of the abyss, or is it just delaying the inevitable? Share your thoughts in the comments section below:
1 March 2011 – Saab Phoenix concept (2011) at Geneva motor show
5 April 2011 – Latest Saab production halt raises concern
11 April 2011 – Saab’s latest factory shutdowns ‘just a blip’
16 May 2011 – Saab announces new China Joint-venture
16 June 2011 – Saab 9-5 Sportwagon (2011) prices and revised 9-5 range
24 June 2011 – Saab unable to pay wages as financing crisis deepens
27 June 2011 – Saab secures more funds as it seeks to avert collapse
28 October 2011 – Saab is sold again: two Chinese makers buy Saab
1 November – Saab 9-3: is this the new 2013 hatch