Saab Briefly Halts Production, Suppliers Claim Bills Are Unpaid

#Saab

As if facing a leadership change and a brutal fiscal year wasn’t challenging enough, it appears Saab is also facing some teething issues with its suppliers surrounding payment.

Saab revealed earlier today that production of 9-3 and 9-5 models came to a brief stop yesterday due to a kink in the supply chain. The issue? Suppliers and vendors allege bills for goods and services rendered are going unpaid, and as a result, some refrained from delivering them until the issue can be ironed out.

“Certain suppliers halted supplies to Saab Automobile pending discussions about payments and supply terms,” the release notes. “Saab expects to resolve these issues in the shorter term to prevent any further disruptions in supply.”

Saab doesn’t indicate which suppliers disrupted production, but an Automotive News report suggests output was hindered by a transportation and shipping company which sought “better payment" for its services.

Although the automaker claims the assembly line in Trollhattan, Sweden, is once again up-and-running, discussions with suppliers over payments -- both past, present, and future -- are apparently still ongoing. Some suppliers allege the automaker owes payment for invoices dating back to December.

Saab’s release insists the company has “sufficient means to meet its immediate liquidity needs from both existing and available sources,” but this could be another fiscal hurdle for the company. Earlier this month, the automaker posted a $308 million loss in its first year of independence from General Motors. In a move to pay off debt, parent company Spyker spun off its supercar manufacturing operation to a consortium owned by investor Vladimir Antonov. Antonov has also hinted he may become a direct Saab stakeholder in the near future (an idea that previously riled GM), and that talks are under way for the automaker to secure a $563 million loan from the Swedish government.

Saab sold only 32,000 vehicles last year, but has previously noted it believes global volume can rise to 80,000 units by the end of 2011. Analysts suggest that figure is more than optimistic, predicting the totals may be in the 60,000 to 65,000-car range instead.

We wish Saab the best of luck, but as its former corporate parent found out in recent years, it’s hard to pay off debts and remain in the black while simultaneously hemorrhaging cash.

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