The Saab Story Continues: Wants to Pay Suppliers on Layaway

#Saab, #9-4x

Saab has been having a rough year. After separating from General Motors last year, the Swedish automaker has had a roller coaster ride of deals falling through at the 11th hour, and cash shortages causing numerous production shutdowns.

Earlier this week, Saab announced that its Trollhattan, Sweden plant would remain closed for another two weeks, after already being closed for most of April and May. The production stoppages have been due to the company’s inability to pay its suppliers for parts.

Now, in a bold move, Saab has sent letters out to the suppliers, taking a page from Wal-Mart shoppers: it would like to buy parts on layaway. The deal Saab has offered is to pay its suppliers 10 percent of its debts up front to receive the necessary parts to restart production; it will then pay the outstanding costs this fall, once it has cash on hand.

CEO Victor Mueller was quoted in the letter sent to suppliers saying that Saab needs “full commitment to this to move forward,” according to Reuters. The letter also stated that the suppliers had until today to respond to the automaker’s offer.

In the past few months, Saab have received a number of rescue packages from Chinese companies Pang Da and Youngman Lotus Automobile to help stem the company’s hemorrhaging of cash, and previous-owner General Motors has agreed to continue building the new 9-4x crossover for the ailing Swedish brand.

Saab hopes to reopen its plant at the start of next month.

Source: Reuters 1, 2

Mr. Felix
They're toast.
Will P
I have always kind of liked Saab. Even when GM drove them into the ground with questionable products like the 9-7x and that Suburu thing a few year back. But it may be time to give up. Without a huge investment from someone, and some freakishly cool new car I just don't see it happening for them.
Brandon Tucker
*Fly-by-night. I have no idea what "fly-by-not" means. :P
Brandon Tucker
It's understandable, especially in today's hyperfast automotive sector, to lose faith in an independent carmaker like Saab. But Saab's underdog status has always been one of its selling points, a key factor in its very design and function, and certainly one of the main attributes which attract its many loyal owners. Saab is not a fly-by-not operation. Victor Muller may seem a bit of a rogue, but he is exceptionally qualified for just this sort of turn-around. That Saab has such a worldwide army of devoted enthusiasts (how many other companies, automotive or otherwise, can say the same thing?), and such an impressive lineup of new and upcoming models, give this underdog more than a fighting chance. Of all the brands who have fallen prey to the new Asian economy (Volvo and MG/Rover to China, Jaguar and Land Rover to India, Lotus to Malaysia, and Aston Martin to Kuwait), most are still managed at highly professional levels, their prestige, design and engineering still strong. And none of them, it can fairly be argued, enjoy the intense, almost manic, loyalty as does Saab. The griffin will live to fly another day.

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