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Saab owner's losses increase ten-fold

AFP/The Local · 1 Sep 2011, 08:34

Published: 01 Sep 2011 08:34 GMT+02:00

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Dutch-based Swedish Automobile, formerly known as Spyker, saw its six months to June loss rise nearly ten-fold to 201.5 million euros ($289 million) from 21.9 million for the same period in 2010.

According to an earnings statement, Saab in the second quarter only managed to build 1,989 cars -- a 79-percent fall from the 9,497 built in the same period a year ago.

It had been widely expected that the owner of Saab, whose production has been halted for months as suppliers stopped deliveries over unpaid bills, would post disastrous results.

The company has been facing mounting bankruptcy threats and last week hinted bankruptcy protection was one option after it had to delay salary payments for the third month in a row when expected funds from investors failed to come through.

It said Wednesday that "securing additional funding, restarting production and stabilising operations (are a) top priority for management," but did not indicate when the cash was expected or production could restart.

"It will come as no surprise that this has been an unbelievably tough quarter for this company. Nothing is worse than having to delay salary payments to your loyal employees and they deserve nothing less than my sincere apologies," Swedish Automobile head Victor Muller said.

"Moreover, our ever tighter financial situation resulted in sustained production stoppages, lost revenues and a significantly increased operating loss," he said.

He said the company's business plan was "under review" as it negotiated to obtain more funding.

"We can't look too far into the future just yet," he acknowledged.

"We are evaluating all available option in order to secure continuity of Saab Automobile," he added.

Over the last six months, Saab has signed deals with Chinese distributors Pang Da and Youngman, and entered a deal to sell and lease back its real estate, giving it access to liquidity.

Story continues below…

But the cash has not been enough to restart production at its Trollhättan plant in southwestern Sweden and many Saab suppliers have been forced to lay off staff.

Muller rescued iconic Swedish brand Saab from the brink of bankruptcy in early 2010 when his company, then called Spyker, bought it from US giant GM.

The new owner had big ambitions for Saab but the carmaker has since lurched from one cash crisis to another.

At the end of July, Saab had 3,700 employees.

AFP/The Local (news@thelocal.se)

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Your comments about this article

10:09 September 1, 2011 by bjinger
Good investment comes from right decisions.
12:54 September 1, 2011 by dammen
another corrupt overlarge company exploiting and underpaying (or not paying) their workers - too late now for the poor folk who will lose their livelihood because of incompetent management
19:35 September 1, 2011 by RadioBob
You can point fingers and complain all you want, but Saab died many years ago. GM kept it on life support. It has just not accepted that it is time to actually lie down in the grave.
07:28 September 2, 2011 by spy

I am a supporter of Saab but to blame its current predicament on GM is stupid.

GM sold Saab over a year ago and at that time Spyker claimed that Saab had a fully funded 5-year business plan, as we know they then ran out of operating cash which is the number one sin in a business of any size.

Saab does have great potential as it has a good customer base, a global network and new cars in the pipeline, I hope a solution can be found.
10:07 September 2, 2011 by johan rebel
This is becoming the farce of the decade, if not the century.

By the way, how many of all those unpaid employees have actually done some work to justify their salary?
17:12 September 2, 2011 by spy
If they are employed, and have a contract, then they can justify a salary.
02:56 September 5, 2011 by funktron
Spy: Yes, it's very expensive to construct a dealer network here in the U.S., and Saab has one----not large, but spread out and with loyal customers. And yes, I've seen a couple renderings of what's in development---cars that are very promising. I think a larger Chinese car manufacturer should pull the trigger and try to get approval to purchase. Yes, they'd be buying a lot of debt, but they'd also be getting a big head start to making inroads into North America, Europe and other big markets, to sell cars. Muller made a miscalculation----instead of focusing on the top end and trying to compete with Audi, BMW, etc., he should have moved mountains to bring a retro entry-level Saab to market ASAP. They need to compete with Volkswagen, Subaru and Mazda.
01:23 September 10, 2011 by repat_xpat
@ Spy

I agree with your post #4; however, it doesn't add value to suggest that RadioBob is stupid. It should suffice to simply disagree.
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