If you’ve been keeping up with the developing news of Swedish car manufacturer, Saab Automotive, then you’re already aware that Saab is sitting on the edge of non-existence. The company’s production line has been inactive since June and they were almost liquidated in July for failure to pay owed wages (which they scrambled to pay). As they hold out for some glimmer of a monetary miracle, the question must be asked; does Saab stand a chance to survive?
Autoweek.com reported on the critical condition of Saab earlier this week. According to the automotive news source, Saab is likely to be declared bankrupt by Swedish courts as soon as today. The company has already won court protection from creditors recently, allowing them to remain alive until funds are found. Where would these funds come from? Saab has apparently been waiting for investment capital from two Chinese companies. Pang Da, an import car distributor in China is in line to provide Saab with $239 million to dig the car company out of debt. On top of that, another Chinese car based enterprise in Youngman Automotive Group is said to be supplying an additional $95.7 million in a deal Saab had made last month with the two organizations. For a time, it seemed like Saab might grind it out and rebound from their financial woos, however now it seems more likely that they will die out like so many companies in the market today.
The reason Saab’s future is loosing light is due to reports in Europe that the Chinese government will deny Saab’s deal with Youngman and Pang Da. As Autoweek.com explains, Saab is not giving up any intellectual property under the agreement and this appears to be a deal-breaker in the eyes of the Chinese government. Whether this is speculation or fact, it might not matter all that much. Simply put, Saab has been under a microscope in the last several months and their plan to resurrect themselves has been questioned by the Swedish government and the rest of the world. They’ve already begun selling off assets as a way to cover as much overhead as they can until the new money deal kicks in.
As optimistic as they may front to be, a business desperately scrapping up money and hindering on both courts and other companies for aid looks like a lost cause already. Even if they do manage to get the funds, they’re production is only one-third of what it was in 2008. Saab vehicles are simply are not selling around the world and with all the negative publicity they’ve been subjected to in the last two years, it’s hard to see an upside in their sales. Still, businesses have survived worst. Until a major break in their tear-some tale is had, Saab will continue to hang in economic purgatory. For their three thousand plus employees, however, we can only hold our hopes for the best outcome.
Tyler Baker; OSM Writer.
Read Autoweek.com article at: http://www.autoweek.com/article/20111011/CARNEWS/111019974