By on June 23, 2011

And this is how it usually ends. Saab spokesperson Gunilla Gustavs said “it is regrettable to have to notify staff of the day before midsummer,” that Saab is unable to pay this months wages to its employees. What’s more, Saab has no idea if and when it will send out paychecks again. “It is impossible to make any sort of forecast, except to repeat that the company is trying to solve this as quickly as possible,” said Gustavs to the wire-service TT [via TheLocal].

Saab employees were told via email this Thursday morning that no money will hit their accounts by month’s end.

“Of course it is in no way positive that the company has got in such a pickle that they can’t pay wages to their employees,” said Häkan Skött, of the Metall union to TT.

Svenåke Berglie, chairman of FKG, the trade association representing Scandinavian suppliers to the automotive industry, told TT that “it is very worrying that they can’t even give a prognosis.”

On Monday, Saab suppliers were given an ultimatum: Agree by Tuesday to accept ten percent on past due payments, with the balance payable in September, and start shipping parts on Victor Muller’s version of C.O.D. (5 -  6 days after delivery.)  Tuesday came and went without a solution. On Wednesday, the press received a “no comment.”

In today’s press release, Saab says that there are “ongoing negotiations with suppliers in reaching agreement on the terms of payments.”  Bottom line: No deal with the suppliers. No money for the workers.

According to Trollhättan’s hometown paper TTELA, the city is already gearing up to support Saab workers in dire straits. The welfare department of Trollhättan however warns that a waiting time of four of five weeks could be involved. The city is ready to render immediate help for people who have been “without food for days.”

I am not familiar with Swedish law, but if it is anywhere like in the rest of Europe, then the situation is extremely serious. Wages and taxes are sacred. Typically, if wages are not paid on time, bankruptcy is next. According to Dagens Industri, the union is already preparing a bankruptcy petition. The paper explains that for workers receiving unemployment benefits, the company must be in reorganization or out of business.

Update: Reuters talked to the unions at Saab and was told that there will be a written demand for payment on Monday. “Then the company has seven days to react,” IF Metall representative Veli-Pekka Saikkala told Reuters. “After that there are two alternatives. Either we see that the situation can be solved, or we demand that Saab is put into bankruptcy”.

 

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54 Comments on “The End Is Near: Saab Can’t Meet Payroll...”


  • avatar
    Mackee

    Very sad for SAAB employees and their families. But how delightful for TTAC. All the schadenfreude you could possibly ask for.

    • 0 avatar

      No Schadenfreude at all. It is a shame for a great brand to end like this. One of my first cars was a Saab 96. Well, it was the Saab 96 of my Finnish girlfriend, and she was a Rally driver. Many fond memories.

      This is Thetruthaboutcars. The truth is that a car company cannot be rescued on the cheap. It requires billions and especially people who know something about the car business. This is no place for amateurs.

      • 0 avatar
        Robert.Walter

        Any girlfriend that will rally her boyfriend to drive her is alright in my book. And if she has her own car? Even better! ;D

        Building a cabin on the Moon is actually easier than saving a failing car company…

      • 0 avatar
        moedaman

        Building unique and quirky products doesn’t make a brand great. It just makes it different. And, quite frankly, SAAB hasn’t done anything unique and quirky for decades.

      • 0 avatar
        Pig_Iron

        @Mackee

        Bertel’s right. TTAC doesn’t hate SAAB, nor do most readers. We know there are plenty of brilliant people at SAAB, but their range, volume and distribution is too small unless the buddy up with someone like VAG. I am very sad about this. I hope all is not lost, but I do not foresee this ending well.

    • 0 avatar
      Ingvar

      Yeah, no need to blame an employer that fails to pay wages after the fact, only telling the employees by e-mail after they were supposed to be payed. Payment was due at midnight earlier this day. For the month they have already put in their hours.

    • 0 avatar
      SVX pearlie

      Well, maybe Victor will offer SAAB employees 10 cents on the dollar, with a promise to be paid in full at some future date, if/when finances allow it.

  • avatar
    Bryce

    Bye Bye Saab you join a long list of dead car makers some good some awful some best forgotten.

  • avatar
    Ingvar

    1500 employees that doesn’t get paid. Though the actual workforce have been put on hold for the last months and actually haven’t been able to work, about 500 people, mostly in the administration, have been working like usual and put in their hours like regular employees.

    Payday in Sweden is the available bankday on or before the 25th every month. As tomorrow is Midsummer evening, counting as Saturday, payment was due today, at midnight between the 22/23 of this month.

    That means, the employees doesn’t get paid for a month of work they have put in their hours in. The day before midsummer. Expect a conundrum like you have never seen, this holiday is close to holy in Sweden.

  • avatar
    Cammy Corrigan

    If SAAB fails, and it’s pretty likely that it will, then, although it’ll be sad to see go, it will be a blessing in disguise. It’s a open secret that Europe has an overcapacity problem and it needs right-sizing. The death of Vauxhall/Opel would have gone a long way to fixing that problem, but now GM have a new problem on their hands with their European operations. You see, GM are going full force into Europe with Chevrolet. They already have the Cruze and Orlando and soon will roll out the new Malibu worldwide. In other words, it’ll go directly into competition with Vauxhall/Opel. Someone has to go. Which makes sense about the rumblings of Vauxhall/Opel being cut loose. However, if a Chinese buyer takes Vauxhall/Opel, then the European market will get a hell of a lot more interesting. Nobody invests that much money to make a loss (something which Spyker didn’t figure out). Now couple that, to the European debt crisis with Greece teetering between default & bailout, Portugal, Ireland & Spain in the same boat, the UK and Italy not looking too healthy, France’s unhealthy financial state and Germany losing money trying to support sicker members of the EU and suddenly you realise that money’s too tight to mention. People will HAVE to start tightening their belts. Which means, people will keep cars for longer and not buy new ones. Car market shrinks, someone’s got to go.

    So, SAAB going under? That’s sad. But it’s a drop in the ocean compared to the massacre that’s going to happen in the next 5 years. Anyone got a job in the US up for grabs….?

    • 0 avatar
      OldandSlow

      The saga at SAAB reminds of when BMW spun off MG Rover to Phoenix Venture Holdings. The difference being that Phoenix had a generous dowry from BMW to burn through while Spyker Cars N.V. did not.

      Make no mistake, this is the final step leading to liquidation. Best advice these workers, would be to get a different trade under their belt.

    • 0 avatar
      CJinSD

      The only jobs in the US are in Texas, and we’ve got a President who is in the process of turning off their power.

      • 0 avatar
        FreedMike

        @CJinSD:
        Yeah, I’m sure shutting the power off in Texas will really help Obama get re-elected.

        As Ronaldus Maximus would say: http://www.youtube.com/watch?v=mmfPZgTEK3o

      • 0 avatar
        colin42

        Funny – I thought all the jobs were in Indiana -now the largest manufacturing state in the US.

        The Company I work for Cummins, (as well as the Detroit auto company’s and probably many others) are hiring engineers like we’re a dying breed.

      • 0 avatar
        CJinSD

        Having a sympathetic press seems to be allowing Obama to manage his Kulaks without repurcussions in the blue states. If what I wrote is news(and apparently unbelievable and easy to dismiss news at that) to you, then I’d say it pretty much proves the point. What percentage of jobs created since Obama took office do you guys think are in Texas? What do you know about shutting down coal fired power plants, or about making oil fields off limits for the benefit of lizards?

      • 0 avatar
        kenzter

        “The only jobs in the US are in Texas”
        There you go spreading your misinformation again!

        Quick search on Careerbuilder for all jobs in Texas: 27,407. California: 31,800.

        And before you start crying about population differences, don’t. I’m quite aware of it. Per capita, yes, Texas has more job openings. I’m only pointing out that Texas isn’t the “only state with jobs”

        And cue the “California is losing 4.5 employers a day” crap….

      • 0 avatar
        FreedMike

        @CJinSD:
        Yeah, I’m sure that the government’s doing all this just to screw Texas. Clearly, they don’t need all that economic activity in Texas to count towards our national economy, right? I mean, when one state’s economy tanks, it doesn’t hurt the nation as a whole, does it?

        The obvious truth…and thank God you turned me on to it…is that the best way for Obama to get elected is to make sure that Texas doesn’t get the electricity it needs – thus hurting the national economy at a time when economic issues are going to decide the election. It’s a brilliant strategy. Pure political genius. Maybe he should run on the slogan “I screwed Texas so I could screw the whole damn country!”

        It’s a lock!

      • 0 avatar
        CJinSD

        europeancourier.org/test/2011/06/18/48-of-post-recession-jobs-were-created-in-texas-which-does-not-have-a-state-income-tax/

        48% of the jobs created under Obama have been in Texas, a state with 8% of our workforce. They’ve certainly been helped by employers leaving California for their friendlier business climate. I had no idea Careerbuilder was the ultimate metric of the labor market, but I guess California must be missing talent if they can’t fill 31,000 openings with double digit unemployment and a population around 37 million.

      • 0 avatar
        CJinSD

        FreedMike,

        Sounds good. What do you suppose the real reason is then?

      • 0 avatar
        FreedMike

        @CJinSD:
        “48% of the jobs created under Obama have been in Texas, a state with 8% of our workforce. They’ve certainly been helped by employers leaving California for their friendlier business climate.”
        That’s true. California needs to do more to attract businesses, and that’s going to have to mean doing something with their tax code and spending. But that’s only part of the problem – the main reason why companies are leaving California is that they have to pay workers there a lot more, and that has more to do with basic cost of living than anything else. Cali is always going to be more expensive because…it’s Cali. So, yeah, companies that have to employ lots of “average-paid” sort of workers will do better in Texas – they’ll be able to get away with paying them less because basic costs of living are a lot lower. That’s a big reason why the jobs are going there.

        But when those ex-Cali folks get to Texas, they’re going to find that the non-existent state tax they were so pumped about is made possible by outrageously high property taxes – I just underwrote a Texas loan for a $350,000 property and the taxes were $1200 a month. No doubt they don’t trumpet that in the “Relocate to Texas” brochures. But then again, that $350,000 house in Texas would go for 750 large, easy, in a place like L.A. Location, location, location, as they say.

      • 0 avatar
        redliner

        …and this is auto related how?

      • 0 avatar
        MattPete

        It’s not related to autos in any way, and I have no idea what he is talking about in regards to power.

        But, I would like to reiterate what the above poster stated: Texas is a high tax state. Don’t let the rhetoric fool you. The income tax may be low (non existent?), but the property tax is insane.

    • 0 avatar
      Sinistermisterman

      Cammy: I saw this coming back in 2008 when everything first went south – that’s why I moved to Canada. There’s plenty of work out here in Vancouver BC. If you don’t mind the occasional hockey riot, you could try getting a ‘working holiday’ visa if you’re under 30, then once your feet are under the table you can get a full work visa, and then maybe permanent residency (which I’m hopefully gonna get).
      Britain is doomed to a long and painful recession. Too many people in too small an island, too much debt, no natural resources, a dead on its feet manufacturing sector, high VAT, high tax on fuel, high income tax… as the money dries up so will all the service industry jobs… there really isn’t much to recommend good ole’ Blighty for at the moment. Not to mention the large numbers of morally bankrupt and socially pathetic long term sponging unemployed who seem to occupy large swathes of every town and city.

  • avatar
    Athos Nobile

    “It is a shame for a great brand to end like this”

    Ditto.

    Que triste.

  • avatar
    obruni

    This will hurt GM and BMW.

    GM has a bunch of 9-4Xs that they won’t get paid for, and BMW loses a buyer of its engines (BMW was supposed to build an engine plant for this!)

  • avatar
    dswilly

    I really thought BMW might step in here and buy on the cheap. SAAB might position nicely between Mini & BMW.

    • 0 avatar
      ExPatBrit

      After the experience with “the English patient” (rover UK) and Chrysler USA there is no way any German car company is going to go anywhere near Saab.

  • avatar
    hachee

    It is sad, but no one can really be surprised. The truth is, this company has not made money for many years, and they really haven’t, IMO, really made anything all that interesting since the original 900 ended production.

    But with the mainstreaming and “volumizing” (I made that up) of brands like BMW, I really thought there would be a place for a niche player like Saab, if only the execution was right.

    The new 9-5 was a step in the right direction, but priced too high.

    Not a good day for what’s left of the Swedish car business.

    • 0 avatar
      FreedMike

      If I were doing a post-mortem, I’d say that it’s not that they didn’t make any interesting vehicles – they did – but I’d go with two main causes: 1) their success in the ’80s was fluky (for a while they were one of the only games in town for small-displacement high-performance cars), and 2) the market doesn’t want expensive, quirky cars anymore.

      And then we have the fact that the old 9-5 was on the market for WAY too long, and the 9-3 was boring.

      • 0 avatar
        Paul W

        3) The competition is A LOT stiffer today, especially from Japanese and now even Korean manufacturers. People are demanding quality, performance, and frequent model updates/replacements and Saab just can’t keep up anymore.

    • 0 avatar
      SVX pearlie

      The 2nd gen 9000 Turbo hatch was a good looking car, for what it was. Even if they no longer had those awesome tri-spoke wheels for it.

    • 0 avatar
      MattPete

      Saab died when the second generation 900 came out. I remember that it has the exact same tail as the then current (1994) Nissan NX2000 (or was it the Sentra), and was noticeably smaller (and more boring) than the first gen 900.

  • avatar
    FreedMike

    Having once worked for a company who didn’t pay its workers (though they did actually recover), I can tell you there is no worse experience in the world of work than getting stiffed on your paycheck. God bless these folks…it sounds like they’re going to need it.

  • avatar
    zachthomas

    This is exceedingly sad news. I’m a bit biased because I have been driving Saabs off-and-on since I was 16. I currently own an ’02 9-3 SE and it’s been a great car.

    However, I’m also realistic and it seems that the road back from the cliff for the brand is impassible. The marque is damaged — probably irreparably. I’m unsure what its next steps could be? Bankruptcy? Dissolution? The latter doesn’t seem likely, but you never know.

    Saab never made bad cars — and it did as well as it could with its limitations. I’ll argue that the recent 9-3 is in a similar realm (maybe not a true competitor) as the other European sport sedans. The company was mismanaged and was saddled with structural deficiencies that led it to where it is today.

    The only good part of this news is that when it comes time to sell-off the 9-3, I can probably get a recent used 9-3 Aero Sportcombi for a screaming deal. It’s already an excellent value for the money.

  • avatar
    Sinistermisterman

    Well, I guess I’ll miss Saab. Any loss of a car brand takes something different off the streets. However I doubt this is the last we’ll see of some of the old Saab designs. My money is on certain designs and tooling being bought up and shipped across the globe to China – a bit like what happened to Rover.

  • avatar
    HoldenSSVSE

    Sad end for a storied, quirky brand that was influential and built some amazing products.

  • avatar
    tallnikita

    I feel generally bad that Saab is dead, but I don’t feel bad that its current GM products will never soil the marketing channels with trash ads pretending these are still SAABS.
    Put a lid on it and write it off to another GM abject failure.
    If someone wants to build innovative front wheel drive cars with A-arm suspensions, commodious hatchbacks, small powerful engines, snow-capable cars, then they can pick up Saab name for pennies and market that as true Saabs.

  • avatar
    JMII

    So they finally stopped rearranging the deck chairs? We all saw this coming a mile away yet had no deathwatch? ;) Ironically I saw a Saablazer the other day and just laughed – a Chevy Blazer with the key in the console is the one vehicle that really sealed the deal killing Saab. Born from jets, but buried by SUVs! (TM)

    • 0 avatar
      doctor olds

      @JMII- You may be surprised to know that the 9-7x was the best selling Saab model in America before it was discontinued.

      The 9-4x’s I am seeing on the roads are distinctive, good looking vehicles, and it seems the 9-5 has had good reviews. Too bad, but is is truly a tough business.

      • 0 avatar
        CJinSD

        I’m not sure surprised is the word, but I never saw many 9-7x’s on the road. I’m pretty sure I noticed the ones I did see, as they looked pretty awkward with their Saab grills and wheel treatments. They may have been the best selling Saabs, but that doesn’t seem to mean they were strong sellers.

  • avatar
    Russycle

    Regarding Swedish law, yeah, this is serious. I have a buddy who works for a real life Gordon Gecko–Takes over companies, drives them into the ground, sells off the pieces. Last time I talked to him they were trying work their schtick on a Swedish company, and having a hard time due to Sweden’s very stringent laws protecting labor.

  • avatar
    Dave M.

    “volumizing” (I made that up)

    Excellent word. I make up words all the time. I know what I mean.

  • avatar
    WRohrl

    Our local dealer (Tynan’s Saab in Fort Collins, CO), announced last week that they will be shutting their doors July 1st. Parts and service will be provided at their Nissan and Kia facilities in town, however for warranty work you need to drive to the dealer in Boulder (45 minutes away). Until that dealer goes under as well or stops being reimbursed by the mother ship…

    Too bad, after moving from CA I was surprised and somewhat delighted to see a relative abundance of Saabs on the roads around town here. This will be a good place to do a Curbside Classic on a 2010 9-3x in about 20 years…


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