Report: Faltering Ex-GM Affiliate Unable to Pay Wages
- Posted on August 1, 2011 at 7:47pm by
Becket Adams
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According to a recent Fox business report, “Struggling Swedish car maker Saab said on Tuesday it cannot pay almost half of its workforce this month because it has not received the funds it had expected, reviving fears about its precarious finances.”
Saab spokesman Eric Geers said the decision affects about 1,600 people out of 3,640 employees. That is 45 percent of Saab staff that will not receive wages. Geers declined to say when they would be paid or how much money Saab still needed so that it could pay wages. What is clear is that Saab’s financial stability is in serious doubt.
“The money has been committed; the only thing is it has been delayed. This is very, very unfortunate for those people who have been affected,” Geers said.
Saab—who, until recently, was owned by General Motors–has been struggling with its finances for decades. Much like its previous owner, Saab has crept from one crisis to another and has been forced to seek funds in hopes of restarting production.
Fox business reports, “Car assembly was halted in April because suppliers refused to deliver parts until they were paid, and Saab only narrowly fended off a demand for one of its units to be declared bankrupt last week.”
The company said it is doing all it can to collect the funds it owes (an estimated $47 million) and is seeking assistance from various groups to raise additional short-term funding. Geers stated that Saab is ready to sell factories and office buildings rather than file for bankruptcy.
Saab’s chances are “slim,” said Martin Crum, an analyst at Amsterdams Effectenkantoor BV. “The company is still not able to produce cars; that’s the main concern. If you don’t sell cars, you don’t get cash in.”
Since being bought by GM in 2000, Saab has failed to turn a profit. As a result, GM implemented a major turnaround plan in 2002 that included firing almost a fifth of its domestic workforce.
But with GM itself hit badly by the financial crisis and begging for government loans, it gave up and announced in 2009 its intention to shut down Saab. However, the destruction of Saab was avoided when GM struck a deal with the Dutch sports car manufacturer Spyker and sold the company to them in February 2010.
But since then, Saab has continued to fall short of sales targets. Last year, they missed the 50,000 target aimed for, selling only 30,000 cars, and will most likely miss their target of selling 80,000 cars this year.
In the first quarter of 2011, only 10,000 cars were assembled at the Trolhättan factory, and hardly any in the second quarter, with production more or less at a standstill since April.
Saab will need to think of creative ways to raise enough capital to stay in business. They can only get so much assistance from their Dutch-owned parent company and they can forget about government intervention.
The Swedish government has said it will not take the initiative in saving Saab, and that the company itself must be responsible for finding solutions to its financial woes.
A company told to handle its own financial problems? What a novel idea!
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Sniper48
Posted on August 3, 2011 at 8:02amBut didn’t Obama fix all this with our money? I’m sure there must be some misstake! I can’t wait to buy my next GM (Government Motors) car. It will be big and shinny, but with gasoline at $55 a gallon all I can do is sit in it and go, “varoom varoom”. I can’t raise the money to buy a car, but with Obama’s help I now must pay for YOUR car, even if you don’t have a job either. But Obama told us everything is going to be OK with all the “hope” and “change” we can use. Now that even speaking of the US Constitution is punishable for inciting a riot, I have little else to say. I see the future and it is black, very black.
Report Post »TelepromoterNChief
Posted on August 2, 2011 at 7:23pmBlah blah blah .. . SAAB is so great. . yatta yatta yatta. . .
Come on people, SAAB is done. Let’s get in line for one of those nifty Chevy Volts.
LoL
Report Post »Smokey_Bojangles
Posted on August 2, 2011 at 5:30pmCall Obama.He has Magic Pockets!
Report Post »Steel Awesome
Posted on August 2, 2011 at 5:14pmI’m sure that Geitner will route some of our newly borrowed money to Saab if a union is involved in any way, shape or form.
Report Post »UpLateAgain
Posted on August 2, 2011 at 5:00pmI’m confused. I thought Sweden had the perfect Euro-socialist economy. How can a Swedish company be having financial troubles?
Report Post »NuffSaid
Posted on August 2, 2011 at 4:48pmOne of the finest automobiles made, shame that GM greed took them out of their element. My best wishes and prayers for SAAB, its investors, engineers and its fine employees.
Report Post »BrendaNNC
Posted on August 2, 2011 at 3:33pmMy husband and I have had two Saubs and currently have a 2007 Saub Convertible and LOVE it!! We’ve gotten several letters from various dealers saying that they would love to buy our car. NO WAY!!
Report Post »brian8793
Posted on August 2, 2011 at 2:12pmI bought a 2003 Saab 9-3 Vector with 95,000 on it for $8,300 OTD. I now have 112,000 on it and so far it is the best car I have ever had. The seats are the most comfortable I have ever sat in. The car is quick and roomy. The parts are high quality, not like American made cars.
I lowered my Saab and did a bunch of other upgrades, and I get complimented on it, daily. It’s a DOPE RIDE.
Report Post »My next car is going to be a 1994 Saab 900 Turbo and I’m gonna slam that bad boy!
Longbow
Posted on August 2, 2011 at 11:52amLet it go bankrupt.
Saab has always been a niche car company, never much demand for their products. It sucks for the employees but this company has no future. There’s already too much capacity in the auto industry. There are other auto makers in much better financial shape than Saab that are struggling to earn a profit. In this environment, Saab has no real chance to survive on their own. GM propped ‘em up for years, time to let the inevitable happen.
Report Post »dontbotherme
Posted on August 2, 2011 at 11:50amWe owned many SAABs since the 70′s. We loved everyone of them. They would get well over 200,000 miles on them easily before we would think of getting a new one. When GM bought them out we stopped buying new ones. We would buy older models with 70,000 miles or more on them & drive them till they died (well over 200,000 miles). Hate to see a good manufacturer go down. I am hoping they still make airplanes.
Report Post »Coach54
Posted on August 2, 2011 at 10:49amwhat a sad, sorry, saab story…
Report Post »dontbotherme
Posted on August 2, 2011 at 12:05pmCoach54: like :)
Report Post »StanO360
Posted on August 2, 2011 at 2:39pmDude, that’s an awesome post
Report Post »timej31
Posted on August 2, 2011 at 10:40amSaab. The worst starter yuppie car ever.
Report Post »Inbred Jed
Posted on August 2, 2011 at 3:02pmSAAB = Sorry A** AutomoBile
Report Post »Apple Bite
Posted on August 2, 2011 at 10:01amThis is sad, because SAAB makes much more than automobiles….
Report Post »affinnity
Posted on August 2, 2011 at 10:33amSAAB actually builds good quality, very high tech cars, but they are just way too expensive to own and operate.
Report Post »HD Veteran
Posted on August 2, 2011 at 9:58amTedDrunk is right.
Maybe Obama will buy saab and then give ‘em to the chicoms. Your tax money at work.
Report Post »GadsdenPatriot
Posted on August 2, 2011 at 3:31amI’m not buying anything owned by commie supporters. Support Capitalism, buy FORD!
Report Post »teddrunk
Posted on August 2, 2011 at 7:12amer..ah…Fords are built by UAW members. They’re Communists too.
Report Post »affinnity
Posted on August 2, 2011 at 10:29amFord UAW workers are forced to join the union. The UAW leaders are Liberal but not many workers are Conservatives.
Report Post »1TrueOne55
Posted on August 2, 2011 at 12:07pmBuy Ford they refused Bailout funds and have more money in the bank to weather the Storms that are coming.
Report Post »brian8793
Posted on August 2, 2011 at 2:08pmI’m not going to buy Ford CRAP. I would only buy a Toyota Truck. I’m not a MORON. I’m not going to buy something because it makes me feel “patriotic.”
Toyota trucks are the best, and everybody knows it. The four-door Tacoma is a perfect truck. Add a turbo charger to it and you got yourself a SWEEEEEET RIDE!
Report Post »trolltrainer
Posted on August 2, 2011 at 2:47pmX2 on the Tacoma. It is also built in the US where most “American” cars are not.
I buy a vehicle at face value of the vehicle itself, not some mistaken ideology. That said, for a heavy truck the Ford Super Duty is hard to beat.
Report Post »Inbred Jed
Posted on August 2, 2011 at 3:03pmI really like both of my Acura TLs a 2005 and a 2010. The 2005 has 213k on it and still running strong.
Report Post »let us prey
Posted on August 2, 2011 at 5:27pmBrian
Report Post »Patriotic or not it is your opinion. Working in any major field that needs a truck it has to be tough. Your Toyota would never out perform a Dodge or Ford in the real world IMO and I have had all of the above.
brian8793
Posted on August 2, 2011 at 6:01pmLETUSPREY, a Toyota Tundra outperforms a comparable Domestic truck. Same goes for The Titan. Just wait till these industry leaders come out with a diesel!
Report Post »GadsdenPatriot
Posted on August 2, 2011 at 9:24pmTed, what choice do we have? They’re the only ones to come to mind that have exhibited any patriotism and responsibility whatsoever. Those union workers don’t have a choice. We can still help support our own economy and capitalism though it’s not as perfect as I wish it was either.
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