July 6, 2011
How long left for Saab? 0
There has been an interesting turn of events recently for Saab, in many different ways. We thought we’d update you from our previous article titled “Is this an end to Saab’s troubles?” That article discussed a potential light at the end of the tunnel for Saab with new investment, but this article will explain how Saab have gone into a deeper crisis.
Saab was recently in so much trouble that they couldn’t afford to pay their staff’s wages, consisting of 3,700 people. Disgruntled unions threatened to start legal proceedings unless they were paid what is due to them by a certain date. The result of the legal proceedings, if pursued it would have meant that Saab were forced into bankruptcy in order to pay the wages. However the company seemed adamant that bankruptcy was not an option. A Saab spokesman made a statement which represents their determination not to go into bankruptcy – “We are working very intensively on securing short-term financing to improve the situation of the company, of course to pay our employees and to work with suppliers to get production going again.” Her statement talks about an alternative to bankruptcy.
Production was halted during the months of April, June and July with the company desperately seeking short term investment. Saab not only owed wages to their employees but also money to suppliers. The estimated date when they can resume production is now the 4th July as suppliers are not handing the company necessary parts. The official figures show that production fell from 123,000 to 33,000 from 2007 until 2010.
When the company was under the control of General Motors, Saab also had serious troubles. But it would seem that the company is under greater troubles now. Whilst some companies made the most of the global financial crisis by offering cheaper cars, Saab didn’t. It could be said for this reason Saab are suffering majorly.
As mentioned earlier there were major events occurring for Saab in different ways. On Monday a much need cash injection was provided by one of Saab’s parent companies. The cash boost is what the company wanted which helps them avoid bankruptcy. It also means that the company can pay their employees and distributors. There is still clearly a very long way to go. The latest financial was great news for the short term, but Saab’s long term future is nowhere near secured. In fact many believe there is no long term for the company
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