The white-collar unions Unionen and Ledarna filed bankruptcy petitions today against Saab, everybody from Associated Press  to inside.saab reports.  On the same day, Saab announced that it had licensed its PhoeniX architecture to China’s Youngman at firesale prices – a move that could possibly buy another month or two. But first things first: (Read More…)

Whenever we report about the machinations around Saab, the faithful remind us that there are real people affected. They are right. Some of the real people work for IAC for instance, one of Saab’s largest suppliers. Half of the production of its factory in Färgelanda went to Saab.IAC Sweden could be bankrupt in a few weeks because they don’t’ have the money to pay a 95 million kronor ($ 14.8 million) tax bill, Sweden’s Göteborg Posten reports. (Read More…)

This was the headline many Saab aficionados were looking for  (and we have the emails to prove it.) On Saab’s darkest day, we might as well put a smile on the faces of Saab’s most militant missionaries – even if the smile lasts only a few seconds.

Two days ago, Saab filed for court protection – the Swedish variant of Chapter 11. That must be approved by the court – and today, the court denied it.  Says the Wall Street Journal: (Read More…)

Yesterday, Sweden’s Dagens Industri reported that Saab would seek court protection today. We did not report it, because honestly, we are tired of the story.  On the other hand, there were signs that things are heading to the court: Saabsunited tried its hand again on amateur spin and wrote that bankruptcy, should it happen, wouldn’t be all that bad: “It does NOT mean that SAAB is in any way dead tomorrow!” Glad this is cleared up.

This morning, employees of Saab were woken from sleep (they’ve become used to sleeping in since April) and called for an all hands meeting at 12 noon.  At the meeting, they heard: (Read More…)

Bloomberg [via the Financial Post] reports that “one of the five biggest European banks” is “close” to loaning Saab $157m  so that it may pay workers and suppliers, in order to move towards restarting production. According to DI.se, the deal is predicated on Saab securitizing the loan with shares of Saab Great Britain or other “alternative assets.” But apparently whatever the banks ask for, Saab will try to give, as Theodoor Gilissen Bankiers analyst Tom Muller explains

They need the money immediately. I hope they solve it this week, otherwise I think it’s over for Saab. It’s a very dire situation.

He’s not kidding…

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Swedish radio cites an unnamed source close to Saab as saying the troubled automaker was preparing to file for court-protected reorganization, as it struggles to pay workers and restart production. Under that scenario, Sweden would pay worker salaries while reorganization takes place. But at the company’s official mouthpiece, inside.saab.com, a press release refuses to deny or rule out that Saab has chosen this route. The release reads:

Swedish Automobile N.V. (Swan) is aware of certain reports in Swedish media related to a possible filing by Saab Automobile AB (Saab Automobile) for a voluntary reorganization under Swedish law.

Swan confirms its earlier announcements that it is in discussions with several parties to secure the short and medium term funding of Saab Automobile to restart and sustain production. In order to secure the continuity of Saab Automobile, Swan and Saab Automobile are evaluating all available options. Swan will update the market in case of new developments.

This non-denial might be read as a confirmation that Saab is considering filing for court protection, but hasn’t yet decided on that course of action. Meanwhile, Saab has delayed its latest financial report, and its online PR rep continues to blame the media for concluding that because Saab can’t sell cars, pay suppliers, restart production or even pay salaries on time it’s destined for bankruptcy court.

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Saab has already warned its workers that paychecks due tomorrow could be delayed until “committed” funds from investors arrive, but Bloomberg reports that the warning may not be enough. According to the report

Any delay in the August payments will prompt the unions immediately to start a process aimed at ensuring state coverage of wages in the event of the carmaker’s failure, officials from the IF Metall and Unionen labor groups said. The unions, after gaining employees’ backing, would first file payment requests with Saab. If salaries remain unpaid in seven days, the unions may then ask a district court to declare Saab bankrupt.

That could put Saab into bankruptcy in as little as two weeks. Saab’s long nightmare seems to be drawing to a close.
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I know I’ve said this several times before, but the end really is near for Saab. The WSJ [sub] reports that Sweden’s Debt Enforcement Agency began auditing Saab’s finances after several debts came due earlier this week, and found only 5.1 Kroner ($796,291) in its Skandinaviska Enskilda Banken account. That’s barely enough to cover the 5.06m Kroner in debts that came due this week alone… and Saab’s total outstanding debt is ten times that amount, around 50m Kroner. And as if the financial trouble weren’t dire enough, key stakeholders are abandoning Saab in embarrassment, like Benny Holmgren, one of Sweden’s largest car dealers. Holmgren tells SvD.se that his contract to sell Saabs has expired and that he won’t renew, explaining

“For me, it is important to be proud of the brands that we have in our halls. Saab does not deliver cars they promised, they do not pay wages to their employees, nor debts to their suppliers while the owners pick out big money. It does not feel right for a [my] car dealers.”

But among the hardcore Saab faithful, today is not a day of sorrowful resignation… but a day of totally overblown and unrealistic hope for their dying brand. Yes, really…
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With debt collectors closing in on all sides, Saab’s shaky PR took another hit today as the Swedish media repotred that members of the board of Swedish Automobile (SWAN), Saab’s parent company, received pay increases of some 633 percent over 2010. Thelocal.se reports that

New chairman of the board, Hans Hugenholtz, received a raise of 633 percent, from 147,150 kronor (about $23k) to 611,163 kronor (about $950k). Others also had their pay increased significantly.

Though the amounts are relatively small, and the dwindling ranks of unquestioning Saab supporters argue that the compensation is low compared to the Dutch average (SWAN is incorporated in The Netherlands), this is just the latest PR disaster to hit the struggling automaker. One Saab employee sums up the mood:

It feels like everyone is out to grab what they can get.

And no wonder they feel that way. Not only did worker paychecks arrive late, but Sweden’s national debt office has begun foreclosing on the first of its outstanding claims… and the initial amount (about $58k) could have been covered by the chairman’s pay increase alone. Sending the message that board compensation is more important than staying out of insolvency has to be some of the worst PR imaginable. Still, some will defend Saab no matter what…
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Bloomberg BusinessWeek reports that Saab has to pay some $620,000 today in order to keep Sweden’s Debt Enforcement Agency at bay. Should Saab fail to pay suppliers Kongsberg Automotive and Infotiv within the next 24 hours, Swedish Debt Enforcement Agency officials say

The collection process that may start tomorrow would include investigating Saab’s bank accounts and potentially also other assets.

Assets will be frozen while Saab’s worth is assessed, a move that would essentially end the existence of Saab as it currently (barely) exists. Saab spokesman Eric Geers says

We’re of course totally aware of this situation with the collection agency, but I can’t comment on what we’re going to do,

but other than pulling out from the Frankfurt auto show in order to focus funds on restarting production and selling another tranche of value-diluting shares, Saab hasn’t done much to respond to the latest crisis. And with another $795m due to suppliers in “about a week,” time is slipping away. Luckily for the True Believers, there’s still a shred of hope-against-hope to hang on to, as Saab’s PR man Steve Wade says something called “The Deal” is in the works.

(Read More…)