Saab executives, including Chairman Victor Muller (c), and design chief Jason Castriota (r), at the NY Auto Show.
Nearly three weeks after a supplier boycott forced Saab to halt operations at its headquarters assembly plant, the maker is anxiously waiting for formal approval of its rescue plan – and fretting that a long delay could cause its operations to “unravel.”
The shutdown has cost the maker significant lost production even as it aims to build up global inventory. But Saab Chairman Victor Muller told TheDetroitBureau.com in an exclusive interview that he believes the Swedish maker could recover those losses in a matter of months – if and when it gets the go-ahead for a plan that would pump millions of Euros into its cash coffers.
“Well, I’m still hoping” to get an answer within the next few days, said Muller, admitting, “I don’t know” why a proposed rescue plan has not gotten the necessary approval from the European Investment Bank.
Saab has had decades of financial uncertainty, culminating in General Motors’ decision to sell or close the maker in 2009. A Dutch company controlled by Muller acquired the maker in early 2010, but by then GM had all but shut Saab down, resulting in a 7-week factory closure. That, in turn, resulted in Saab falling short of Muller’s initial sales and revenue projections.
Early this month, a number of suppliers to whom Saab owed money threatened to boycott the maker demanding payment. The carmaker tried to negotiate, but in hindsight, admits Muller, “We shouldn’t have called their bluff, letting it come to this.”
The irony is that Saab has a significant credit line through the European Investment Bank, or EIB, which backed the acquisition last year, but that money is earmarked for R&D and other long-term spending, not for day-to-day operations. So, Muller and his team have negotiated an alternative deal with a former partner of his, the Russian banker Vladimir Antonov.
But the EIB has been delaying approval, Muller says, for reasons unknown – especially since the deal has the approval of the Swedish government, which continues to guarantee the original EIB loan.
The shutdown is now in its third week, but Muller says that if operations return to normal relatively soon there will be “very little” long-term damage. “We can easily recoup the (lost production of) 3,000 cars in a matter of months.”
But if the EIB continues to delay, he laments, “This can’t last because my supplier base will unravel,” making it ever more difficult to restart the Trollhattan, Sweden assembly line.
The crisis nearly derailed Saab’s planned news conference at the New York Auto Show, which was originally intended to focus on new products, such as the 9-4X crossover and 9-5 SportCombi, as well as the maker’s edgy PhoeniX concept vehicle.
Saab chief designer Jason Castriota tried to put a brighter face on the situation by suggesting that Saab is, “Like a child that wants to walk but falls on its face once in a while before it can run.” The setback, he asserted, is temporary. “We’ll get up-and-running.”
Muller told TheDetroitBureau.com he is cautiously optimistic of getting the go-ahead from the EIB next Tuesday, after the Easter holiday break.