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We already knew that poor Saab was struggling; yesterday, it offered to pay its suppliers only 10 percent of its outstanding debts. Today, the ailing automaker is offering up a worse deal for its employees: no pay!
Saab’s financial situation has become dire, to say the least. The company now has so little short-term cash that it is no longer able to pay any of its employees. In a prepared release today, it said that it was in discussion with “various parties” to resolve the funding issue through the sale and lease-back of its real estate. (Haven’t we heard this one before?)
Interestingly, Saab appears to have had a bit of a reality check, as its latest press statement says“There can, however, be no assurance that these discussions will be successful or that the necessary funding will be obtained.”
Saab’s newfound realistic outlook is not assuaging fears with labor unions, however. The IF Metall and Unionen groups representing Saab’s workers are demanding that the automaker pay its members wages by Monday, saying it needs to resolve the short-term cash flow issues immediately. If Saab does not pay up, IF Metall has threatened to enter legal proceedings to procure the wages, something that would most likely end only in bankruptcy for the automaker.
In attempts to secure short- and mid-term financing, Saab has entered into two deals with Chinese companies: one with Pang Da for a bulk purchase of vehicles, and one with Youngman Lotus Automobile and Pang Da for a Chinese-based manufacturing joint venture. Both deals, however, are still pending official approval from various world governments and agencies.
Source: Saab, Automotive News (Subscription required)
I have a question. Is it only the workers who didn’t get paid or was it everyone, including upper management?
The damage is done. While I may be totally wrong on this and they may rebound to be a strong company, I find it hard to believe that any consumer will invest their hard earned cash into a vehicle made by a company that may not be there tomorrow…and with repeat news reports of their continued hardships, I don’t see consumer confidence getting any better.
This doesn’t make sense. Saab’s sale was supposed to save the company, not delay its demise. What kind of due dillegence took place to permit the company to be sold to an insolvent company? Geely should buy Saab and create one uber pseudo Swedish car maker. Volvo could take the upper end of the market with the S60 and a new S80. Saab could take the lower end of the market with a new 9-3 coupe, sedan, roadster, shooting brake, and other varients. Both companies could share the XC60 crossover, with Saab getting a version that looks and performs like an Infiniti FX.
That sounds like a terrible idea, considering the two companies share neither parts nor platforms, and still owe much of their manufacturing and part supply to their former owners. And considering the 9-3 and the S60 are the same size, what sort of viability or need would there be for Saab?