Saab may be less than two weeks away from going belly up, according to parent company General Motors. GM asked the Swedish government for financial assistance to the tune of $568 million.
But getting the money from the Swedes will probably not happen. Swedish Industry Minister Maud Olofsson said neither she, nor the Swedish government, would bailout the company.
4,500 people work at the Saab Trollhaettan factory in the south of Sweden. Going bust would mean the loss of those jobs, and thousands more who work for suppliers that rely on the company.
GM requested the money to keep Saab above water long enough to seal a sale of the brand. Olofsson responded to this by saying, "The Swedish state and taxpayers in Sweden will not own car factories."
Olofsson puts the blame squarely on GM for Saab's current problems, saying GM concentrated on products people don't really want. She also said that if GM had been more innovative, and developed more fuel efficient vehicles sooner, they would not be in this mess. GM took a majority stake in Saab in 1990, and acquired the rest of the company ten years later.
Olofsson continued to say that Saab "has been running at a loss for so many years it would be irresponsible for me to stand here and say, sure, we are going to use taxpayer money in this way."
Saab's Board of Directors is reportedly in secret talks this week to discuss what to do with the company. They have the opportunity to file for reorganization, which allows them protection from creditors as they attempt to create a plan to make them profitable. As opposed to bankruptcy, creditors have to be convinced that a writedown of the debts they are owed is in their best interest. If they agree, they cannot attempt to force a liquidation. If they disagree, the reorganization process will halt.
Should they proceed with reorganization, they may sever legal ties to GM, and continue to press the Swedish government for assistance.
pzigly
February 19, 2009 8:27 PM
