Saab Shuts Down Again, Situation "Tense," No End In Sight

Saab was supposed to reach 100% production speed sometime in the middle of last week after enduring a nearly two-month shutdown. But now it seems that more “material shortages” have brought the Trollhättan plant to its knees again, as Steve Wade of inside.saab.com reports

Yesterday, production at Saab Automobile stopped at lunchtime due to material shortages. We have now stopped again today for the same reasons…

The liquidity situation is still tense, and depends on several different financing solutions falling into place, long-term as well as short-term. Some milestones have been achieved, such as the letter of intent signed with Pang Da and the additional funding that their order of Saab cars means. An example of things that still await a solution is the sale and leaseback of Saab AB Property, which we have addressed in previous communications. Representatives from Spyker and Saab will continue to work with these solutions, while the dialogue between Saab and suppliers progresses.

According to one supplier quoted in GP.se, Saab has worked out new payment terms with its just-in-time suppliers, but still needs to work through issues with so-called batch suppliers. Swedish supplier sources confirm [via AN [sub]] that some suppliers still have not been paid, and have yet to restart their own production lines. And though official statements from Saab executives and spokespeople emphasize that this stoppage was not unforeseen and will be resolved, nobody at Saab seems ready to give a date for a production restart. Swedish media outlets have reported that production has been called off for the remainder of the week, though, and some suppliers have sent their workforces home.

And while the short term situation reverts from “glimmers of hope” to “same old sadness,” Saab also seems to be soft-pedaling the importance of its Pang Da deal, which Bertel and numerous other commentators have argued will not be approved by the Chinese government. Automotive News [sub] reports

“It’s tough for me to predict but I think everybody expects to come through,” Saab President and COO Tim Colbeck said at a media luncheon in New York on Tuesday.

If approved, the Pang Da deal could be a mid-term solution to Saab’s financial woes, Colbeck said. “Midterm” means at least through the end of 2012, he said, adding that Saab’s message to dealers right now is to focus on the company’s long-term potential.

“If this deal fails, it’s on to the next one. There are a lot of people looking to invest in Saab,” he said. There is no timeline for a final decision from the Chinese government on the Pang Da deal, he said.

But how many people can really be that interested in investing in Saab when only 385 Americans invested in actual Saab cars last month (around 1,600 global units for the month), and only 3,150 people have bought Saabs in the US market since the beginning of the year? And with production falling apart just days after Saab’s CEO said he would ensure that a shutdown wouldn’t happen again, this feels like the beginning of the end of the end for Saab.