• 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)

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
National
Fears schoolboy murdered in Sweden
Photo: TT

Fears schoolboy murdered in Sweden

Police in Halmstad say the results of forensic tests suggest a 16-year-old boy found dead in a creek was murdered. READ  

National
Elk hunters risk injury in Sweden’s woods
Hunter Ingela Olsson loads her rifle at sunrise in Norrbölla, northern Sweden. File photo: Gunnar Lundmark/SvD/Scanpix

Elk hunters risk injury in Sweden’s woods

Sweden’s vast annual elk hunt spells danger not just for the majestic animals but also for hunters, with crumbling towers and over-tiredness just two of the season’s perils. READ  

Malmö
Rat invasion closes Malmö preschool
Rats like this one have been found in a kindergarten. Photo: TT

Rat invasion closes Malmö preschool

Children in central Malmö are staying at home on Tuesday after a rat infestation was discovered at their kindergarten. READ  

National
Sweden's benefit agency site restored
Photo: TT

Sweden's benefit agency site restored

UPDATED: Sweden's Social Insurance Agency website is working again after being out of action since Monday. READ  

Presented by West Sweden
Live Blog: West Coast lobster season begins
The catch of the day. Photo: The Local/Oliver Gee

Live Blog: West Coast lobster season begins

The Local's Oliver Gee reports live as he joins fishermen on Sweden's west coast seeking the first lobster catch of 2014. READ  

National
Swedish teenagers abused on Secret app
File photo: Fredrik Sandberg/Scanpix

Swedish teenagers abused on Secret app

Swedish police are struggling to know what to do with a new batch of criminal reports filed by teenagers upset about a controversial app that allows users to post comments and pictures anonymously. READ  

National
Swedish man beats bus in video challenge

Swedish man beats bus in video challenge

UPDATED: A Swedish runner who filmed himself beating his bus in Sundbyberg in north west Stockholm over the weekend is now planning to a similar challenge on the capital's Metro system. READ  

Regional
Rain causes power cuts across east Sweden
Strong winds are battering Stockholm and the east coast of Sweden. Photo: TT

Rain causes power cuts across east Sweden

Heavy rain and wind have left thousands without electricity in eastern Sweden, with ferries also disrupted by the storm. READ  

Elections 2014
Budget headache for new coalition partners
Social Democrat economic spokesperson Magdalena Andersson with Per Bo from the Green Party. Photo: TT

Budget headache for new coalition partners

UPDATED: The Social Democrats have been holding talks with the Green party to try and agree on a future coalition budget. But questions remain over how they will work together on issues including defence and nuclear power. READ  

National
US runaway banned from name change in Sweden
'Wanted' photograph of David Hemler used by US Air Force Office of Special Investigations. Hemler lives and works in Uppsala. Photo: Shutterstock

US runaway banned from name change in Sweden

A US airman who deserted from the military three decades ago and moved to Sweden has failed in his bid to get his old name back, because a Swedish court says he can’t prove his identity. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Gallery
Property of the week - Torslanda
Finest
Gallery
People-watching: September 20th
The 'black gold' of Sweden's west coast.
National
West Sweden prepares for the 2014 lobster premiere
Society
What's on in Sweden
Politics
How Sweden Democrats went mainstream
Blog updates

22 September

Welcome National Geographic! (Stockholm in my American Heart) »

"What comes to mind when you think of the “The Arctic”? Crystal-encased cliffs jutting from the sea, baronial Polar bears scavenging over sheets of cracked ice or a lone explorer heading north into the night. The image my mind invokes is of three sparkling green lines splashed across the sky like graffiti— the Aurora Borealis— our..." READ »

 

19 September

Editor’s blog (The Local Sweden) »

"Happy Friday readers! It sure has been a exciting week in Sweden, where we’re set to get a new Prime Minister after Fredrik Reinfeldt stepped down following Sunday’s elections. The Local blogged live from the key political gatherings across Stockholm. Why not re-visit the action by taking a look at our photos, tweets, videos and analysis? Since the..." READ »

 
 
 
Politics
Scandinavia and Scotland: closer links?
Gallery
Property of the week - Eskilstuna
Sponsored Article
How to start a business in Stockholm
Society
How I became a surf blogger when I moved to Sweden
Gallery
People-watching: September 13th
Society
Why is Stockholm's Södermalm so cool?
Gallery
People-watching: September 11th
Gallery
People-watching: September 13th
Politics
Five possible election outcomes
Politics
Sweden elections: How do they work?
Politics
Sweden elections: Who's who?
Gallery
Property of the week - Hornstull, Stockholm
Analysis
Five differences between the UK and Sweden
Welshman Jonny Luck is now a chef in Sweden
Society
How I opened my own restaurant in Sweden's Malmö
Sponsored Article
Stockholm tech fest: relive the magic
Gallery
People-watching September 8th
Photo: TT
Politics
Feminists fight for first seats
Politics
Immigration cut push from Sweden Democrats
Sheryl Sandberg says women have "low expectations"
Tech
Facebook exec talks women's limits in Swedish business
Politics
Left Party calls for justice and equality
Sponsored Article
Introducing… Insurance in Stockholm
Sponsored Article
Graduates: Insure your income in Sweden with AEA
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

848
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
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN