Bankruptcy looms for car maker Saab
Saab is on the brink of bankruptcy after the car maker admitted that it cannot pay the wages and salaries of its 3,700 employees.autos Updated: Jun 24, 2011 21:18 IST
Saab is on the brink of bankruptcy after the car maker admitted that it cannot pay the wages and salaries of its 3,700 employees.
Losses, sustainable under the previous owner General Motors, are on the verge of overwhelming Saab’s Dutch parent, Swedish Automobile, which was forced to stop salary payments for 1,500 factory workers on Thursday. The IF Metall union set the clock ticking on the company, warning that it would enforce bankruptcy proceedings to reclaim the unpaid wages within a fortnight.
A Saab spokeswoman admitted that about 2,200 office workers, designers and engineers might not be paid as Sweden goes into a holiday period.
However, she said Saab was not actively preparing for bankruptcy, with the car maker making a last-ditch bid for cash by negotiating a sale-and-leaseback of its Trollhattan factory with unnamed parties. [Bankruptcy] is not the scenario that we are working with. We are working on securing short-term financing to pay our employees and to work with suppliers to get production going again.”
Saab production has been halted until 4 July at the earliest after suppliers refused to distribute parts to the company.
First Published: Jun 24, 2011 21:17 IST