Saab's assembly line has been idled since March due to a supplier boycott.
With a $96 million bridge loan in hand, Saab is desperately hoping to keep itself in business, but it may be too late for the struggling Swedish carmaker, its employees asking the courts to push the brand into bankruptcy.
Saab is asking a Swedish appeals court to reverse last week’s decision by a district judge to reject its reorganization plan – a move that, in Sweden, would give it 90 days to work out a way to pay off its bills. And it owes a lot of folks money, including not just some of its key suppliers but also 3,700 Swedish employees who weren’t paid last month.
After also experiencing delays in their June and July paychecks, two unions have filed for bankruptcy, something workers are permitted to do in Sweden, though “This is not a situation that any member of Unionen wishes to be in,” Cecilia Fahlberg, chairwoman of one of the two unions, insisted after taking Saab to court.
The move came hours after Saab found ways to raise $96 million through a complicated deal with Specialty Purpose Vehicle, an apparently newly-formed organization that seems to be linked to one of the Chinese companies, Zhejiang Youngman Lotus Automobile, that has been trying to secure permission to purchase a majority stake in Saab.
The bridge loan will apparently be called in once the deal with Lotus and Chinese auto dealership chain Pang da is completed. The two companies say they hope to move their bid through that country’s notoriously slow regulatory process in the coming month.
The question is whether there will be a Saab left by then.
The bankruptcy filings are expected to take up to five weeks to process, according to Unionen.
But Saab hopes that it can win on its appeal of the reorganization plan that was rejected last month. A district court said it was not persuaded to give the maker more time because it did not believe the Chinese deal would be completed.
Further complicating matters, Saab is apparently still seeking another $157 million loan from a yet-unidentified European bank.
The maker has little money coming in otherwise. It was struck by a supplier boycott at its headquarters plant in Trollhattan late in March. It is continuing to produce the 9-4X crossover at a General Motors plant in Mexico, but demand is modest, at best, as potential customers wait out the maker’s uncertain situation.
In August, Saab sales in the key U.S. market were up by about 25%, but still only reached 363 units, well short of the maker’s original goal.