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article imageA year after rescue, SAAB in trouble again

By Martin Laine     Apr 23, 2011 in Business
A year after being bought by Dutch automaker Spyker, Sweden’s Saab plant has stopped production, suppliers haven’t been paid, and there may be layoffs. A deal to help is in the works, but some observers say it is too little, too late.
Last year, Spyker paid a reported $400 million to General Motors, which had owned Saab for 20 years. In that time, the brand had never shown a profit. At the time, Spyker CEO Victor Muller predicted Saab would sell between 50,000 and 60,000 this first year. However, only 32,000 were sold.
The company’s most recent troubles began a month ago, when one of its suppliers complained that it had not been paid. Other suppliers began demanding payment, and discovered that the company could not come up with the $44 million they were owed.
To add to its problems, the company’s CEO Jan Ake Jonsson, has announced he is retiring after six years of leading the company. This is seen as a setback at a critical time. Jonsson has been with the company in various capacities for more than 40 years, and is widely respected as an executive.
One deal under consideration is to sell Saab’s real estate holdings to Russian entrepreneur Vladimir Antonov, who would then turn around and lease the property back to the company. This would give the automaker enough money to pay suppliers and resume production.
The Swedish government has already approved the plan, but it still needs the approval of the European Investment Bank. The EIB approved a loan to the company at the time of its purchase a year ago. EIB approval had been expected last week, but for some unexplained reason it has been delayed.
In the past there have been concerns that Antonov may have organized crime connections, though he denies this and no proof has been offered. The earlier deal for Spyker to purchase Saab as approve only after assurances that Antonov was not involved.
Even if this new deal with Antonov is approved, it may not be enough to save Saab.
“This is not a solution,” said Lars Holmqvist, head of the European Association of Automotive Suppliers, in an article in The Local. “This is just a very short term thing. They needed a lot more money at a much earlier stage.”
Spyker’s Muller disagrees.
“Saab is not on the verge of collapse,” Muller said earlier this month, calling the cash-flow problem “a glitch.”
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