Trouble for Saab has been growing ever since it left General Motors for a Dutch ownership and Russian banker courtship. Problems seem to crop out of every genre for the company these days, call it production related issues, low or no pay to suppliers and now problems with payment for employees. With the ever growing list of problems this could be the end for Saab.
During the middle of June this year, the company’s corporate parent Spyker was asking Chinese automotive companies for financial help. Among these firms were Pangda Automobile Trade Co. and Youngman Lotus Automobile, talks with all these firms yielded no benefits in favor of Saab.
This week Saab extended its plans for production halt, this time period was supposed to be over by July 4th but now the company has announced that production will not be resumed from then. This problem arose because of the inability of Saab to pay its suppliers on time and he required cut that they asked for, their debts to the suppliers is an estimated 47 million dollars.
Saab also announced that it has run out of funds to pay its own employees, talks for funding with few parties was ongoing but nothing concrete had been planned. The company acknowledges that there is no assurance whether funding will be obtained or these talks will lead to successful results.
Inability for the company to pay its employees will mean a shutdown phase to take over the firm. Unions run by workers in the company have already threatened to take the matter to court in case their wages were not paid. Lawsuits could make the company bankrupt and owing to the current situation of the firm, scope for betterment seems a distant dream.