Wednesday, December 7, 2011

SAAB WATCH 2011 : The Last Stop

News spread last week of Saab's failure to meet the deadlines to pay back wages to their workforce.  The Swedish automotive manufacturer had buyers in-line to purchase controlling interest (and then some), but were vetoed by General Motors due to the deal hurting the future business structure of GM.  Like they have for the past several months, Saab procrastinated past the point of no return and in an effort to show Swedish courts and labor unions they were trying, Saab had arranged a deal with their proposed Chinese investor, Zhejiang Youngman Lotus Automobile and an unnamed Chinese Bank to find instant funding and strike a deal that might appease everyone.  Today, it was reported that GM has once again, denied Saab of any signs of life.

In an article on Autocar.co.uk, GM's position on Saab's "new" offer was made perfectly clear.  The spokesman of GM was quoted in the article as saying, "we have reviewed Saab's proposed changes regarding the sale of the company.  Nothing in the proposal changes GM's position.  We are unable to support the transaction."  Although the details of the deal are undisclosed, it seems apparent that Saab really hasn't listened to GM's position on the matter.  The American company is concerned with competition in Asia as well as the lose of a significant portion of income through parts and services that GM provides to Saab currently.  Selling the company to Chinese based companies, regardless of who it is, has GM concerned about the matter.

At this point in this drudging courtroom dance, it is hard to be subjective or even apathetic for the shot callers of Saab.  The owners, Swedish Automobile, purchased the manufacturer from GM less than two years ago and has driven the company into ruins in a spectacular implosion of empty promises and failed tactics.  Granted, GM is partially responsible, but if these last months revealed anything about the way Saab is being run, it's that Saab is not being run well at all.  Failure to meet any deadlines thus far, it is a huge surprise that the Swedish courts, who are the only thing keeping Saab from being gutted by their debtors, has kept them alive so long.  Let's not forget, they continually refused the advances from the Chinese investors only until it was far past their deadline to present to their restructure solution to the court.  After that, they had to submit and accept a total buyout from Youngman and Pang Da Automobile.  It's this kind of absurd high mindedness that has lead them down this spiraling sink hole of a situation.

The bottom line is that Saab is out of options and on December 15th, they will have to explain themselves for the very last time to the courts who are protecting them.  Guy Lofalk, the administrator appointed by the courts to manage Saab's reorganization process, has already filed the motion to kill Saab's court protection from creditors.  Saab, however, will attempt to make a case and ask for a new administrator be put in Lofalk's place.  With the Chinese deal being blocked by GM and a slew of owed invoices and wages in their way, how could the courts see it sensible to side with Saab?  By next week, we'll know, but until then, Saab remains alive, grasping to whatever short straws are left in the hand of fate.

Tyler Baker; One Stop Motors Writer

( Source : Autocar.co.uk )

No comments: