Saab says it cannot pay workers
Published 23/06/2011 | 13:12
The owner of Swedish car maker Saab says it does not have the money to pay employees' wages.
Dutch owner Swedish Automobile, previously known as Spyker Cars, has courted Chinese and Russian investors and put the Saab factory up for sale in its attempts to revive the brand it took over from General Motors last year.
But after months of production stoppages and problems with paying suppliers, Saab said the situation is so dire that it will not be able to pay its 3,700 employees, adding to doubts over how long the brand can survive.
Analysts have sounded the death knell for Saab several times since Spyker, a small luxury sports car maker, bought it from GM last year for 74 million dollars (£46m) in cash plus 326 million dollars (£202m) worth of preferred shares.
Saab spokesman Eric Geers insisted that it is not headed for bankruptcy.
"We're saying that we don't have funding to pay out salaries, but we're working day and night to find a solution," he said. "We're assuming we'll find a solution."
Swedish Automobile said it is in talks with various parties to solve the financial difficulties, but warned that there can be "no assurance that these discussions will be successful, or that the necessary funding will be obtained."
The car factory in Trollhattan, in south-western Sweden, has been plagued by production stoppages since March as Saab has struggled to pay suppliers for parts.