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Saab says Chinese order pays for staff, not output
by Staff Writers
Stockholm (AFP) June 27, 2011


Swedish auto maker Saab will be able to pay staff and some supplier's bills with cash from a Chinese order but is still seeking funds to resume production, its parent company said on Monday.

"A Chinese company placed an order to purchase 582 Saab vehicles with a total value of 13 million euro ($18 million) ... the full pre-payment is expected to be received this week," Swedish Automobile said.

The unidentified buyer's money will "provide Saab Automobile with short-term funding to pay the wages to its employees and make partial supplier payments," the Dutch firm formerly know as Spyker said.

It will not be enough for the group to restart production, which stopped on June 8 because the company lacked parts for the assembly line as suppliers halted deliveries to Saab over unpaid bills.

Swedish Automobile said it was in talks to find funding to resume production but warned "there can, however, be no assurance that these discussions will be successful or that additional short-term funding will be obtained."

Supplier group International Automotive Components (IAC) said Saab owed suppliers about 44 million kronor ($6.7 million, 4.8 million euros) and that it had filed a claim against it with the Swedish Enforcement Authority, a public authority which intervenes in unpaid bills cases.

Some Saab suppliers and re-sellers have also announced they had to let staff go because they had not yet been paid.

Last week, Saab said it had even run out of cash to pay its staff, with about 1,500 blue collar workers due to receive their salaries on Thursday affected immediately, with the rest of the firm's 3,700 staff to follow suit.

Two union representatives and a legal advisor left Saab's board at the weekend following the announcement, leaving Swedish Automobile head Victor Muller as its sole member.

"I am pleased to announce this agreement, as it secures part of the necessary short-term funding for Saab Automobile and allows us to pay our employees' wages before the end of this month," Muller said in Monday's statement.

"I respect the decision of the union members to resign from the board of Saab Automobile," he added. "We very much regret the current cash shortage which is causing undeserved hardship to all and we are working relentlessly to resolve the current situation."

Muller also said Russian financier Vladimir Antonov, a former Spyker shareholder who repeatedly said he wanted to invest in Saab, was still interested in participating in the company.

Antonov, however, still needs to be approved by the European Investment Bank (EIB), which loaned money to Saab.

Sweden's national debt office (NDO), which has a say in Saab's ownership structure because it guaranteed the EIB's 400-million euro ($580-million) loan, recommended "to clear him over eight weeks ago," Swedish Automobile said.

"Once clearance has been obtained, Mr. Antonov can provide much needed financing and/or capital to Swedish Automobile/Saab Automobile at this critical time. We are pushing hard to obtain this vital clearance as soon as practically possible," the company said.

Union IF Metall on Monday issued a strongly-worded statement imploring the government to take action for the new investor to be allowed in.

"I cannot imagine the French or the German governments standing on the sidelines and waiting for a long process to go through instead of trying to (act) when an industry of national interest is affected," the union's head Stefan Loefven said in the statement.

Iconic Swedish brand Saab was saved at the last minute at the beginning of 2010 when it was bought by small Dutch firm Spyker from US giant GM.

In its 20 years as a GM brand, Saab never turned a profit.

The new owner had big ambitions for Saab but the carmaker has since then lurched from one cash crisis to another.

Earlier this month, Saab announced it was entering a partnership with two Chinese businesses -- car distributor Pang Da and manufacturer Zhejiang Youngman Lotus Automobile -- which was to generate investment of 245 million euros ($350 million).

A previous deal with a Chinese firm fell through.

.


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