“The government has given Saab the green light to borrow money for its
daily operations,” Swedish Enterprise and Energy Minister Maud Olofsson told
reporters late Friday.
Industry observers were skeptical the move would be enough to save the
iconic carmaker, which was saved from oblivion in January 2010 when Dutch firm
Spyker bought it from General Motors at the eleventh hour.
“This is not a solution. This is just a very short-term thing. It’s like
putting someone on life-support for one more day,” said Lars Holmqvist, the
head of the Brussels-based European Association of Automotive Suppliers.
“It won’t help in the long term. There are far too great problems beneath
the surface… They needed a lot more money at a much earlier stage.”
Sweden has a final say in Saab’s business because it guaranteed a
€400 million ($580 million) European Investment Bank loan for the company
through its National Debt Office (Riksgälden).
Under Friday’s agreement, the Debt Office will release its security covering Saab’s
property holdings, allowing the company to raise fresh cash by selling the
assets, including the main Saab plant in the southwestern Swedish town of
Trollhättan which will be leased back.
At the same time, however, the EIB financing package for Saab will be
reduced to €280 million – as it has already drawn down €217 million from the EIB, that leaves just 63 million euros.
Saab’s pressing liquidity crisis became painfully clear last month as
suppliers stopped deliveries to the carmaker over unpaid bills.
Its assembly line was halted several time before the company finally
announced on April 6th it was stopping production “until further notice.”
“We have decided that we don’t want to have these stop-and-go’s any more.
It’s not good for the whole production process,” Saab spokesman Eric Geers
told AFP at the time, adding production would re-start once got a financing
That was the first time since Spyker’s takeover that Saab halted production
without providing a subsequent start-up date.
The chairman of the IF Metall union at Saab’s plant in Trollhättan told
AFP before the government decision Friday that the halt had been difficult but
that employees remained optimistic.
“We think there will be a solution and we’ll be producing again. That’s the
worst thing, that we can’t produce any cars,” Håkan Skött said.
In its 20 years as part of GM, Saab never turned a profit and its
production of between 100,000 and 130,000 cars was negligible in the global
In its last year of GM ownership, Saab output plunged to just under 39,000
cars from 93,000, and production stopped before Spyker bought in.
Spyker chief Victor Muller set high ambitions for Saab, saying it would
sell 50,000 cars in 2010 and placing strong hopes on the new 9-5 and 9-3
But it only sold 32,000 cars last year and Muller said earlier this month
he regretted setting targets, feeling “hammered” by the press for not reaching
“Saab is not on the verge of collapse,” he told reporters near Stockholm
earlier this month, describing the cash flow issues as “a small glitch.”
Friday’s arrangement probably will not be enough to get Saab back on the
road to prosperity, according to Jacques Waller, a car industry specialist at the Dagens Nyheter daily.
“It is a too small company with a too weak owner,” he told AFP, explaining
Saab was not able to produce enough vehicles to turn a profit, and recalling
that Spyker, before buying Saab, was a luxury carmaker that made only a few
cars a year.
The cash-raising scheme approved Friday also remains a bit sketchy.
The deal will likely allow Saab’s real estate to be bought by Russian
businessman Vladimir Antonov, a former Spyker shareholder who has so far been
blocked from taking a stake in Saab due to reported allegations of organized
However, nothing has yet been decided on whether he will be permitted to
follow through with a pledge to invest €50 million ($70 million) in the
company in exchange for a 30 percent stake.
And Holmqvist, who represents suppliers to whom “Saab owes a large amount
of money,” said even €50 million would not last long.
“It’s been a long time since there was a chance for Saab to survive as an
independent company,” he told AFP.
“Unfortunately, I think they will go bankrupt. If it happens tomorrow or in
two or three months, I don’t know, but I don’t think they will be able to get
hold of the huge amount of money they need.”