• Sweden edition
 
SAAB CASH CRISIS
Holding back wages 'last resort': experts

Holding back wages 'last resort': experts

Published: 23 Jun 2011 15:02 GMT+02:00
Updated: 23 Jun 2011 15:02 GMT+02:00

“Generally you could say that what is important for a company on the brink of disaster is to pay its taxes and its employees,“ said Per Åhlström, professor at Stockholm School of Economics (Handelshögskolan), to news agency TT.

He makes the assessment that the cash-strapped carmaker is in “a very tight spot”.

“It doesn’t look like they are getting the backing they need. What is important for Saab at the moment is to find backing to give the company a respite in order to get sales going,” he said.

According to Ferdinand Dudenhöffer, auto analyst at the Duisburg-Essen University, Saab has little chance of ever becoming a financially stable carmaker again.

“The situation has deteriorated for Saab over the last two, three or even ten years. I see no solution to the problems," he said in an interview with Swedish business paper Dagens Industri.

Dudenhöffer also said that he doesn’t think that Saab would be able to compete on a market that today is dominated by brands like Volvo and BMW.

Luxury carmakers Ferrari and Rolls Royce don’t leave much room for Saab to try to battle for the exclusive market either, according to Dudenhöffer.

“There really is no place for the Saab business model on the market, “ he said.

Dudenhöffer also doubts that the Chinese co-operation will be the answer to Saab’s dilemma.

“I don’t know if they have the ability to give Saab a cash injection. But even if they can, sums like €50 million won’t suffice to turn Saab around,” he said.

And the latest developments in the Saab saga imply that things have reached rock bottom, according to experts.

“The very last thing that a company in crisis stop paying are taxes and salaries,” said Peter Törngren, who acted as a liquidator to Saab last year.

But as he no longer has any special insight in the automaker’s finances, Törngren can’t say how close to the brink the company really is.

On Thursday Saab's main union IF Metall called on the government to intervene, saying Thursday's announcement was "the worst case scenario for our members in

Trollhättan".

But minister for enterprise Maud Olofsson reiterated that the government would not step in to finance help for the beleaguered automaker.

"It is Saab which has the responsibility and must find the financial solution," she said.

Prime Minister Fredrik Reinfeldt meanwhile said he sympathised with Saab

employees, who received the news at the eve of Midsummer weekend, one of Sweden's most celebrated holidays.

Saab's owner and leadership must "answer how to make Saab profitable so

that it can survive," he said, stressing the Swedish government had been supportive when it came to development opportunities and making loan structures possible.

TT/The Local/rm (news@thelocal.se)

Don't miss...X
Left Right

Your comments about this article

16:40 June 23, 2011 by millionmileman
Dear Swedish Government,

Saab is not asking for endless welfare just enough to kick-start the factory to so the cars that people have been ordered can be produced. Then the workers can spend their wages, keeping the Swedish economy going.

The alternative is skilled workers on welfare until they start running out of other peoples' Kronas. Other businesses will suffer and there you have the downward spiral that has gripped the US economy for the past 2 years. Americans are just not spending and that includes Swedish products.

What makes Sweden great is its innovative industries. This is why Israel's (with a similar population) economy has not been affected by the Great Recession. The Government got out of the business of regulating and holding back, allowing them to flourish with a stellar GNP.

LQQK at Greece. All I can think of are Kalamata Olives. I certainly do not want to be left with only knäckebröd from IKEA.

Wake up!
17:15 June 23, 2011 by Twiceshy
Dear millionmileman

Stop trying to prop up an unprofitable business. Ever heard of throwing money into a black hole?

What makes this particular instance of Saab needing money different from the other times it happened?

Those workers you mention are currently wasting their time working on a company which will go bankrupt anyway, when they could be out there training for jobs which generate actual profits, or starting up their own productive businesses.
18:13 June 23, 2011 by RobinHood
@Millionmileman

"Saab is not asking for endless welfare ...." Yes it is! It took billions off GM, and hundreds of millions off various banks which it will never repay. It is about to "borrow" millions more from its own employees; another loan which it will never repay. When it defaults, it will take millions more off the Swedish taxpayers for loans foolishly guaranteed by the Swedish government, and incredibly, it wants the taxpayers to stump up billions more to keep it afloat. Saab has been on welfare for 20 years, and no one wants to buy its products.

If you think it's such a great company, make the receiver in bankruptcy an offer. You should be able to pick up the entire company for about 500 SEK in a couple of weeks. Good luck with it.
20:07 June 23, 2011 by Great Scott
I would rather see money going to some form of parachute pay for the workers than the billions that are going in the form of tax breaks for the well off.

This is not just about 2 or 3000 people at Saab, but also its supply chain which is most probably triple that amount. I don't think it's a case of if, but when Saab goes, beware of the tidal wave.

Also remember it's easy to say train for another job, but you must consider some of these people are too old to train. On top of that Sweden already has an extremely high unemployment rate.

The best any one can hope is that the Chinese take over Saab and keep some production in Sweden.
20:08 June 23, 2011 by spy
Robin Hood

Actually you are wrong on many levels:

1) Saab didn't take millions from GM - GM were actually managing Saab as a brand and if there was a loss it was down to GM themselves

2) Yes Saab does owe millions to banks - but frankly what big company doesn't have loans - Saab's are secured so the banks have limited risk

3) Yes I agree Saab has behaved irresponsibly with regard to its suppliers and more recently its employees - clearly this is extremely bad management

4) The Swedish taxpayer is unlikely to suffer directly - if it all goes wrong the National Debt Office already have security against Saab assets - although they will have to burden the cost of around 15,000 lost jobs

5) You may be surprised to learn that there are in excess of 10,000 new car orders - so it is clear some people want to buy their cars

6) You are wrong to think that the entire company could be bought up after going bust - If the company does go into liquidation many of the cars' IP rights will revert to GM and the Saab name will revert to Saab AB..... So we may yet see a scramble to save the brand before it dies....

A note to the Swedish government and EIB: If you had approved Antonov Saab would not be in this mess....
09:16 June 24, 2011 by Arcticeric
Saab has been on life support for quite some time ... please, be kind, pull the plug.
Today's headlines
Dad jailed for assaulting his infant twin sons
Photo: Jessica Gow/TT

Dad jailed for assaulting his infant twin sons

A man in central Sweden was sentenced to prison for aggravated assault on Friday after doctors noticed that both his twin sons had sustained serious and unexplained injuries. READ  

Swedish city all set for six-hour workday trial
Clocking in. File photo: Shutterstock

Swedish city all set for six-hour workday trial

Officials finalized plans on Friday for the "Gothenburg guinea pigs" who will test out the six-hour workday, a move it's hoped will cut down on sick leave, boost efficiency, and ultimately save Sweden money. READ  

Armed royal guards caught drunk on the job
Photo: Gunnar Lundmark/TT

Armed royal guards caught drunk on the job

Three Swedish soldiers risk prison after they were found to be drunk while guarding Stockholm's Royal Palace. The men, who were all armed at the time, were charged on Friday. READ  

Stockholm
What do the Swedes do when summer's over?
Photo: Isabela Vrba

What do the Swedes do when summer's over?

The heatwave is well and truly over, the days are getting shorter, and winter is coming. With this in mind, The Local's Isabela Vrba chatted to ten Stockholmers about how they plan to tackle the autumn. READ  

Swedes spend fortune on nail polish trend
Photo: Bertil Ericson/TT

Swedes spend fortune on nail polish trend

Swedes are spending more than ever on makeup - and a growing chunk is going directly to their fingernails, new figures showed on Friday. READ  

Sweden mulls stripping paracetamol from shops
The pharmacy section of a grocery store. Photo: Fredrik Sandberg/TT

Sweden mulls stripping paracetamol from shops

After a drastic increase in the number of paracetamol poisonings in Sweden, authorities have said the drug should only be available in pharmacies. READ  

Listeria fears prompt meat recall in Sweden
File photo: Andreas Hagerman/Flickr

Listeria fears prompt meat recall in Sweden

After finding traces of listeria in ham sold in Sweden, food companies decided on Friday to recall several Danish cold cuts. READ  

Sweden Floods
More rain expected as floods hit day four
Photo: Johan Nilsson/TT

More rain expected as floods hit day four

UPDATED: Sweden's floods showed no signs of abating over Thursday night, with highways closed, emergency teams working overtime, and more rain on the way. READ  

Ikea opens first store in the Balkans
An Ikea city centre store in Hamburg. Photo: TT

Ikea opens first store in the Balkans

Swedish furniture giant Ikea has opened its first store in the former Yugoslavia, near Croatia's capital Zagreb. The move marks the company's first step in an expansion to the Balkans market. READ  

Elections 2014
'Sweden Democrats hold the key to elections'
Jimmie Åkesson. Photo: Bertil Ericson/TT

'Sweden Democrats hold the key to elections'

With national elections around the corner, political scientist Stig-Björn Ljunggren says there's a hive of activity behind the scenes, and that the right-wing nationalist party could end up being the key player. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Politics
'Sweden Democrats hold the key to elections'
Society
Swedes celebrate first day of smelly fish season
Politics
Sweden elections: How do they work?
Finest.se
Gallery
People-watching August 20th
Society
Did you know the Bronx in NYC was named after a Swede?
Blog updates

17 August

Sea Fever (Around Sweden in a kayak) »

"I’m going to keep this post short and sweet as its not something I take any pleasure in writing. After much deliberation I have made the heartbreaking decision to abandon my trip after 1200km due to reoccurring injury. It is not a decision I have made lightly and it is one that has been truly devastating..." READ »

 

17 August

St. Louis strong (Blogweiser) »

"It’s typically a bad sign when my hometown makes news in Sweden. St. Louis was in the headlines here a few years ago when a tornado struck the airport. The city also caught attention after a politician talked about ‘legitimate rape’. Now, shooting and riots this week in Ferguson, a part of St. Louis, are..." READ »

 
 
 
Politics
"Iraq reminds me of the Yugoslav wars. It's the same story."
Society
Swedes slam Danes for 'racist' art
National
Majority of Swedes favour more or just as many refugees
Society
Lock your bathrooms: Swedish toilet invader on the the loose
Politics
'Assange will not leave until safe'
Gallery
See more images from the southern Sweden floods
Sponsored Article
Find out what gives this Swedish school executive appeal
Society
Serial chicken smuggler caught at Norway border. Again.
Society
This gold coin may be the key to solving a Swedish massacre
Shutterstock
Lifestyle
The Swedish mentor (and why you may need one)
Politics
Reinfeldt calls for tolerance to refugees
Gallery
People-watching August 16-17
National
Sweden celebrates 200 years of peace
Society
Top ten literal Swedish words
Politics
'Terror training should be illegal': Liberal Party
Gallery
Swedes talk about 200 years of national peace
Politics
Islamic extremist shakes Sweden with TV threat
National
Teacher fined for 'Hitler salute' in German class
Features
Kiruna residents talk life in a town on the move
Skatteverket
Sponsored Article
Introducing... ID cards and permits in Stockholm
Sponsored Article
Introducing...Your finances in Stockholm
Sponsored Article
Introducing...Housing in Stockholm
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

714
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se