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8 September 2011
Bankruptcy protection is Saab’s last hope
Euronews.net - Saab seems to be creeping closer to the end of the road. The Swedish carmaker, which is seeking to stave off its creditors, has filed for bankruptcy protection with a local court.
That is intended to buy it time to get more money from Chinese investors in deals which are still awaiting approval from the Beijing authorities.
Saab’s boss Victor Muller said: “We have seen a very turbulent past four months, in which we managed to get somewhere around 125 million euros of capital and other funding into our company: however, obviously, it wasn’t enough.”
Car industry experts say Saab needs to sell at least 120,000 vehicles a year to break even; last year it produced just 32,000 and this year even fewer.
Production at its Swedish plant has been at an almost continuous standstill since April because suppliers refused to provide parts until they received payment.
The Chinese money is also by no means certain. Beijing may refuse permission to the two small car makers who plan to invest in Saab as it wants to consolidate a fragmented domestic auto industry already crowded with too many small and inefficient players.
