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No resolution for Saab's cash crisis

TT/The Local/gm · 9 Apr 2011, 08:48

Published: 09 Apr 2011 08:48 GMT+02:00

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“We have done what we can and we are making preparations for the weekend. I thought we had a solution, but unfortunately that isn’t the case,” Lång told Swedish business daily Dagens Industri (DI).

She refused to elaborate any further on what the actual plans were that did not did not work out on Friday, but added that more work will continue over the weekend in a bid to find a solution.

The factory has been at a standstill since Wednesday because the car maker has not been able to pay suppliers. Speculation over the week suggested that the government was prepared to relax some of the guarantees that had been insisted upon for the 2 billion kronor ($321 million) loan which has been granted to Saab, although at this stage there is no confirmation according to DI.

Despite the setback, hopes remain that production at the Trollhätten factory will be restarted in the next few days.

“We think that it will be next week” said Saab spokeswoman Gunilla Gustavs.

Story continues below…

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

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Your comments about this article

10:42 April 9, 2011 by Arcticeric
So who is surprised by this? It just proves again that the bigger the deception, the easier it is to believe it.... My, how a fool and his money are soon parted - the foolish who parted money to think that they could rescue a mini-Titanic called Sabb Automobiles from resting at the bottom of the big ocean of global business reality. Only those who "bought" Saab wil proft, albeit only at a personal bank account level. Only the buyer will win, those who helped him buy it and those who that they were being rescued will, like the Titanic, go down down with the ship. But here at analogy ends, the Captian, who never really got on board, will survivie and take the spoils with him. Maybe however the underlying problem is with those who thought Saab could be rescued - and not the one who came on the stage and simply capitalized on that idea and through showmanship i.e. PT Barnum, proved that you can fool some of the people, all the time!
11:35 April 9, 2011 by Eagle63
Saab is much to valuable to go under; its quite unique in the otherwise bland automotive world. Or are we going downhill to a world where there is no more room for individualistic and intelligent designs...? Do you wanna drive in a reliable but oh so very boring Toyota, or some other mindless trendy crappy vehicle that people forget about the instant a new model comes out..

Everybody remembers the pioneering 99 turbo, the iconic 900 and the superb 9000..., Saab deserves a chance to show the world what great cars it can design and built, it will just take some time, and money..
11:56 April 9, 2011 by Jasper2
Comment #1 is a prime example of a paranoid rant not based in reality. Pity.
12:47 April 9, 2011 by jack sprat
Unfortunately comment #1 is reality and has been fairly obvious from day 1.
16:00 April 9, 2011 by RobinHood
Comment #1 might be proved right in the next few days. Possibly proved right in the next few weeks, and certainly proved right in the next few months. Pity.
20:57 April 9, 2011 by DAVID T
Boring expensive cars - Too high labour costs due to swedish social fees - who in their right mind would have bought that albatros and kept the manufacturing in Sweden? Better cheaper cars out there
21:06 April 9, 2011 by bdurk
It is unfortunate that the new management team at Saab has been unable to capitalize on Saabs values. I disagree that Saab has no value, it has a very capable distribution and dealer network that could be used to assist other auto makers interested in entering the US and other markets. This becomes more valuable as fuel prices continue to rise. The US consumer is starved for something other than the typical boring Japanese cars, they buy them because there is no other choice. There are a host of European manufacturers building small cars that could be distributed outside of Europe.

Saab should be looking to partner with a European manufacturer that lacks a presence in the US or other markets, this type of arrangement would be beneficial for both parties. Investment in Saab would also be an easy and inexpensive way for another manufacturer to acquire a vast distribution network.

Saab builds unique and fun cars to drive, they just need to create additional ways to build cash flow and their network is an untapped resource that should be looked at quickly.
21:36 April 9, 2011 by Kevin Harris
Er, I don't think some posters here have read the story above. Saab ran out of its own money years ago, then it ran out of GM's money, then it ran out of the money it borrowed from the EU, and now it has run out of the money it "borrowed" from its suppliers.

Saab left the car building business last Wednesday. A car factory that doesn't actually build cars is not very useful to anybody. If Saab has an "untapped resource" laying about, it needs to get it into production by Monday lunchtime at the latest.

How dire does it have to get before some people see Saab's situation for what it really is?
19:31 April 10, 2011 by clipper965
I live in the USA. The SAAB 9-5 is one of the nicest looking sedans I have seen in years but it is way -way over priced. It cost several thousand more than Audi or BMW and it that class it simply will not measure up.
12:02 April 11, 2011 by Paulsaero
I am a confirmed Saab nut, thought I'd put tat up front.

The concern I have is that the capital strucure of the company is not good. The EIB money cannot be used for day to day working capital so cars like the new 9-3 can be designed and developed but the current generation cannot be built due to a lack of funds. Without the existing cars being built, sales will not devalop and cashflow will die so the EIB will not be repaid or the guarantees will have to be called in.

The current stories will make potantial buyers very wary and will magnify the problem, but if they're factual then so be it.

I don't agree that the new 9-5 is overpriced the models compare well on spec and price with anthing the opposition can put out. I spent a day in a 2.8 Aero and it's worth every penny ofhe 40000GBP list price - unfortunately I don't have the money but if I did I would buy one. I'm looking at an ex demonstrator instead - actualy the same car. Buying second hand does not directly help with Saab's cashflow problems however - only new sales count there.

What needs to happen - people with bigger brains than mine need to get the division between working capital and future investment balanced out. Failure to do so will lead to the demise of a great brand - and a substantial burden on the Swedish social security system. This needs to be done VERY fast otherwise Saab will die from a diminished customer confidence.
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