Patrick Rall's picture

Saab suppliers claim the automaker owes tens of millions

Yesterday we brought you the news that Saab had once again suspended production due to non-payment issues with some of their suppliers and today, a Swedish suppliers organization stated that the automaker owes tens of millions in Swedish currency.
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Tens of millions certainly sounds terrible but with the current exchange rate between the Swedish Kronor and the US dollar, 10 million Swedish “crowns” equals roughly 1.6 million US dollars. So, depending on how many “tens of millions” Saab owes their suppliers, the amount in US dollars could start somewhere between 3-5 million. Svenake Berglie, chief executive of the FKG suppliers' sector association also pointed out that the current discussions between Saab and the suppliers is not based on extended credit, but the automaker’s need to pay their bills. Berglie went on to say that he was worried about the company’s future, especially based on their current financial issues.

The Trollhattan plant was once again dormant today with reports from a Swedish that the union workers at the production facility have been given the rest of the week off. Saab has not yet offered a comment in response to the suppliers organizations claim that the automaker is tens of millions in debt but unless the company comes up with a fair sum of money in a hurry, it appears that Saab may be in worse shape than it was when General Motors was running the show.

Throughout this whole issue, Saab management has maintained that this isn’t an issue of not having the money, but rather a short term liquidity issue. If that proves to be the case, the best way that Saab could resolve these issues is to pay their bills – unless they don’t have the money. Saab has some good looking new models on the horizon packed full of high tech gadgetry but if they can’t pay suppliers to build the vehicles, the end could be near. Luckily, the company has an over-abundance of vehicles already built so the current work stoppage should have little impact on consumer sales. Unfortunately, how many consumers are going to run right out to buy a car from a company with a questionable short term?

Source: Automotive News


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