Saab restructuring imminent: report

TT/AFP/The Local
TT/AFP/The Local - [email protected] • 19 Feb, 2009 Updated Thu 19 Feb 2009 08:38 CEST
Saab restructuring imminent: report

The board of Swedish automaker Saab is expected to make a decision about whether or not to seek bankruptcy protection during a special meeting of the company’s board on Thursday.


The news comes from anonymous sources within Saab, according to several Swedish media outlets.

The move, which comes a day after both General Motors (GM) and the Swedish government said they had no plans to support the troubled brand, would likely resulted in major changes at the company, including staff cuts and alterations in production.

Saab Automobile spokesperson Eric Geers declined to confirm the reports.

“We can’t comment on that,” he told the TT news agency.

Speaking to Sveriges Radio (SR), Saab chief executive also Jan-Aake Jonsson refused to confirm the information.

"I don't want to speculate on the different alternatives that Saab has when it comes to running our operations going forward," he told SR.

Early Wednesday morning Swedish time, news came from the United States that GM had no plans to invest further in Saab and hoped to sell the company by January 2010.

During the day on Wednesday, the Swedish state also announced it would not be investing the billions necessary to keep Saab afloat.

A restructuring carried out with the help of a court-appointed administrator would temporarily protect Saab from creditors while the company wrote down some of its debt and implemented changes that would give it one last chance to avoid bankruptcy.

Jöran Hägglund, state secretary to Minister of Enterprise and Energy Maud Olofsson commented on the news during an appearance on a Svergies Television (SVT) morning news programme.

“Yes, I saw the news as well. It’s clear they need to act based on the situation in which they now find themselves. But is it the end of something, or the start of something new?” he told SVT.

“There are various interest parties in parts or all of Saab. So I don’t think that we’ve heard the last word on this.”

Observers said Wednesday the company's only chance of surviving in its current form was to find a buyer -- a difficult feat in today's global economic climate.

Restructuring could allow parts of Saab to survive and could enable suppliers, who would lose all the money owed them by the company if it filed for bankruptcy, to get some money back by agreeing to accept only partial repayment for their goods and services.

Saab employs about 4,100 people in Sweden, 3,700 of whom work at its hub in the southwestern town of Trollhättan.

Including suppliers, some 15,000 jobs in Sweden are believed to be at risk if the unit disappears.


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