Kris Alingod – AHN News Contributor
Trollhattan, Sweden (AHN) – A little over a week after announcing an agreement with two Chinese investors to help with its liquidity, troubles continued for Saab on Thursday after unions threatened court action over unpaid wages.
In a statement on Thursday, Spyker Cars, which this month changed its name to Swedish Automobile, said it will be unable to pay the salaries of employees because it had yet to secure short-term financing.
The beleaguered carmaker said it is in discussions with different groups about immediate sources of cash, including the sale and lease-back of Saab properties, and possible arrangements with current investors.
“There can however be no assurance that these discussions will be successful or that the necessary funding will be obtained,” Swedish Automobile said.
In response, IF Metall and Unionen plans to send a demand notice to Saab and give the company a week to pay outstanding wages. The two unions called on the Swedish government as early as 2009 to intervene to save the iconic brand as well as workers and subcontractors in the Swedish car industry that depend on the company.
IF Metall Federal Chairman Stefan Löfven said in a statement the announcement about wages “was the worst possible news” but that unions are “working hard to come to a solution.”
“We still believe in Saab,” Löfven said.
Swedish Automobile announced on June 13 investments from two Chinese firms that will help it resume production at its Saab plant in Trollhattan, Sweden.
Pang Da Automobile and Zhejiang Youngman Lotus have agreed to invest a total of 245 million euros ($352 million) in Swedish Automobile under an agreement that includes distribution and manufacturing joint ventures in China.
The agreement increases the investment of Pang Da to 109 million euros from 65 million euros while keeping the firm’s equity stake in Spyker at 24 percent. The firm, which is China´s largest publicly traded car distributor, said last month it would buy shares of Swedish Automobile for 4.19 euros each, at the time the weighted average of shares.
The new agreement retains the share price and gives Pang Da the right to nominate two members of the supervisory board of Swedish Automobile.
Youngman, which makes trucks for German-based MAN and cars and spare parts for British-based Lotus, will acquire a 29.9 percent stake of Spyker for 136 million euros.
Swedish Automobile revealed the agreement after it again suspended production in Trollhattan.
A seven-week production halt began in April due to unpaid bills from suppliers. Work at the plant resumed after Pang Da paid 30 million euros to buy Saab vehicles as part of its initial agreement with Swedish Automobile.
In early June, however, Victor Mueller, chief executive of Saab and Spyker, said that although agreements with most suppliers had been reached, there remained a lack of parts from a few remaining suppliers as well as those that were taking some time to re-stock because they are located outside Europe.
Spyker currently has nearly 10,000 orders, including those for the Saab 9-4x, which is being made in Mexico.
In its official corporate blog, Saab’s Swade said on Thursday the pending orders “represent a big boost to Saab’s inward cash flows, however we can’t invoice and receive payment for those cars until they’re built.”
“We can’t invoice a 98 percent complete vehicle’” he added. “You can call it a Saabish chicken-and-egg puzzle if you like – we have plenty of orders to complete… if we can get parts, but parts have been difficult to get because of restricted cashflow. We are working hard with suppliers to resolve this.”
Article © AHN – All Rights Reserved
View full post on All Stories