The Saab 9-5 Aero at the maker's plant in Trollhattan, which has been idled by suppliers demanding payment.
The shutdown of Saab’s main assembly plant, at its Trollhattan, Sweden headquarters, could drag on for some time as the maker struggles to raise additional cash to help cover what parts suppliers claim are millions of dollars in unpaid bills.
The maker’s parent, Dutch-based Spyker Cars, nonetheless insists that Saab is not nearing a collapse. The maker only emerged for near-insolvency a year ago, after Spyker purchased the failing brand and its assets from General Motors.
A spokesperson for the automaker, based several hours from capital city Stockholm, said Saab officials are “working hard” to find a solution, but also warned “could” stretch on for several days.
Following the Geneva Motor Show, in March, Saab Chairman Victor Muller stated the company still has about $200 million of the money left from a 2010 European Investment Bank loan. But he also said Spyker would be seeking to raise additional capital as quickly as possible.
Saab was hit with a brief production halt last week when suppliers temporarily halted deliveries. Saab appeared to have addressed that problem, but the confrontation resumed this week, and the latest production halt is now in its fourth day.
“I don’t know how much it is in total, but we are talking about tens of millions [of crowns],” Svenake Berglie, CEO of the FKG suppliers’ sector association, told Reuters. He warned that without a resolution of the payment issue, Saab’s situation “look(s) very bleak.”
It wouldn’t be the first time, however.
Saab has struggled for most of its corporate life. The company was founded by a group of aerospace engineers, following World War II, and developed a reputation for producing unusually and often quirky products. It earned a loyal following, but one seldom large enough to ensure its financial stability. The maker was sold in the 1990s to a consortium of investors including General Motors. The U.S. carmaker took full control in 1999.
But GM could not come up with the right formula to turn things around, and as its own fortunes began to fail said it would either sell or close Saab. Towards the end of 2009, GM began, as it put it, the “winding down” of Saab operations as a series of bidders failed to pull off a deal. But a last-minute proposal by Spyker saved the company.
Nonetheless, by then Saab operations had been effectively shut down and it took the new management seven weeks to bring the Trollhattan plant back into production.
Whether Spyker can find the necessary cash in-house is uncertain, though it claims it does have some money. It also has several potential investors, including former Spyker partner Vladimir Antonov, the Russian businessman who recently acquired the Dutch sports car operation marketing under the Spyker name.
Antonov says he has $71.5 million that he could invest in the company, but is waiting for approval from Swedish regulators. The latest crisis could put pressure on government bureaucrats to approve the application.
It is unclear whether Muller might try to reach some terms with former Saab owner GM. The U.S. company has a vested interest in the Swedish company’s survival, since it currently produces both the Saab 9-3 and the new 9-4X crossover vehicle. A Saab collapse would impact production at several General Motors plants, at the very least.