Saab automobile could be placed on bankruptcy protection


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Thursday, 23 June 2011
Saab troubles have take so much press time than marketing to see that the company becomes fully transformed and move on to become a leading brand as it supposed to be.

Analysts feel that both company’s management and some jinxes within the Saab DNA is responsible for the inability of Saab to move up from a company that don’t want to grow.
Saab’s problems are not just what are happening to the company today. There have been problems in the company more that 10 years ago but luckily the company was owned by wealthy American owner – then General Motors (GM) which at that time could keep on bankrolling Saab even if it was making looses. As such, we knew that the company was not making profits but there was no cried such as that the company could be left to fall.
But then the economic crisis of  2008 – 9 came, where the automobile sector was heavily hit. GM was sinking really fast and needed to off load its load so as not to drown. It started jettisoning the heavy weight into the sea and Saab was one of them. In fact GM was ready to crush Saab and bury it and forget about it. Then the Swedes behaved as if they loved the company and started acting as if Saab was of great values that if lost will really affect the country’s industrial and economic prowess.

Then when Spyker came, the Swedish government went to the EIB and stood as a guarantor for what was determined that as a big loan to the company. Although Spyker was not very keep on the terms of the loan given it astronomical terms and interest rates, all still looked good and the feeling here in Sweden was that Saab had been saved. Production resumed and cars started rolling off the production line again.

But things went wrong some where – we are not able yet to put a finger on it. Reversals started happening to the company and operations came to an abrupt halt. Now we are seeing a company that might go under any time soon.

According to Ferdinand Dudenh�ffer, auto analysts at the University of Duisburg in Essen, Germany, it does not look like Saab could be an economically sustainable automobile manufacturer.

He said: “The situation has only gotten worse for Saab in the past two, three or even ten years and I see no solution to the problems. In the car market now are brands like Volvo and BMW that have a future and Saab is just too small and inefficient to compete with them. First, there are exclusive brands such as Ferrari and Rolls Royce, and their customers, Saab can not fighting for them anymore. Therefore in my opinion, there is no place for Saab's business model on the market.”

He does not believe that the cooperation with the Chinese companies can turn Saab's development. “I do not know if they are able to transfer money to Saab. But even if they have it is not a sufficient amount - EUR 50 million, which is spoken of, to turn Saab's development, is not enough.”

Also others such as P�r Ahlstr�m, professor of entrepreneurship and management at the Stockholm School of Economics say that “It's very tough for Saab now. It does not appear that it is possible to get the financing they have imagined.”

Work is on at full speed to find a way out and it as well as in that case to find funding so that the company can have a respite to try to relaunch the sale. The production is very well organized, but no one buys the cars, it is difficult. And it's tough competition with many great players who have more opportunities to invest and achieve economies of scale, according to the professor.
Despite all the woes, there is still a bit of optimism among some people.
By Team

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