Persistent talks of Saab automobile shifting to bankruptcy within weeks


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Monday, 13 June 2011
The stresses in Saab automobile continue with yet dampening news from the Swedish presses. Reports hold that the company is still not yet out of the woods and the worst, the company could be shifting towards bankruptcy within weeks.
It is not clear if this is really a realism or just wishful thinking by the Swedish press which has been accused of promoting negative comments about Saab automobile since it started having wobbly production flows a few months ago. But one fact is clear – Saab is still in trouble as its production plants are still close because of lack of parts for car building.
According to Swedish business daily Dagens Industri, Saab Automobile's management has spent the weekend trying to shake up more capital to secure its future. At the same time suppliers talk about bankruptcy of the company already on its way within a week.


Dagens Industri noticed that at the beginning of the week, Saab will conclude the sale of its property plant in Trollhattan for Skr280 million. But the paper also hold speculation about a new deal with a Chinese investor who will provide some additional Skr100 million.

But Dagens Industri continues that there is no humour between Saab and its subcontractors. One of the largest providers of parts to Saab, IAC Sweden, will meet with Saab on Monday to discuss a payment plan for Saab's debts to the company.

Reports also hold that several other suppliers are weary of Saab and by last Friday, they accused Saab not managing to live up to its agreements with them.

"If the binding contract is broken, the Saab board has no alternative but to put  Saab Automobile  in to bankruptcy, "said Marcus Nyman, CEO of IAC Sweden, to  Dagens Industri.

Some observers feel that Saab automobile is poorly treated by Swedish part suppliers and other feel that Saab is being held hostage because when they stop supplies to the company, it will be forced to pay at a higher prices.

The company is wasting lots of money paying workers, rents and the likes, for tools it does not use. The question one observer put is how the suppliers are trying to help Saab get stronger so that they can be in businesses at a much longer time.

Saab was bought from an almost dilapidated stage from American company GM and since then the company’s management has been trying to put the company back to the road. But sometimes doing business in Sweden is very hard.
By Team

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