With a proposed rescue plan still stalled, struggling Swedish automaker Saab’s headquarters assembly plant remains shuttered for the third week, raising questions about its long-term prospects.
The European Investment Bank, which provided the loan permitting Dutch-based Spyker Cars to buy Saab last year from General Motors, has so far refused to approve a deal that would involve the sale of Saab’s factory and other assets to a Russian businessman. A one-time Spyker partner, Vladimir Antonov would then lease those assets back to the Swedes.
That has sent Saab scrambling to line up other options, the company announced in a release that states, “Spyker and Saab Automobile continue to work on securing additional funding. To that end Spyker and Saab Automobile are negotiating equity and debt financing and/or technology licensing with various strategic partners, including various Chinese car manufacturers. No commitments have been received to date.”
There have also been reports that Saab may turn to former owner General Motors for assistance.
The crisis was touched off, on March 29, when several suppliers demanded immediate payment of overdue bills before they would unload trucks delivering parts needed for the Trollhattan assembly line. The suppliers briefly agreed to work with Saab but the boycott resumed a few days later. The closure of the factory, located next to Saab’s Swedish headquarters, is now in its third week.
The line produces two key Saab models, the new 9-5 and older 9-3. Production of another Saab model, the 9-4X crossover, continues, however, as it is being assembled by former owner General Motors at a factory in Mexico. The 9-4X is due to launch late next month.
Saab blames its financial problems on the fact that the Trollhattan plant was shut down for seven weeks after the sale by GM in early 2010. According to Dutch entrepreneur and Saab Chairman Victor Muller, that resulted in slower sales and lower revenues than anticipated. The latest closure could create similar problems for 2011.
Muller told TheDetroitBureau.com that if the shutdown ends soon Saab could make up the losses of production — around 1,000 vehicles a week – within a few months. But he also warned that if a resolution isn’t found soon things could “unravel.” Precisely what that means wasn’t clear, but it is obvious, analysts say, that the underfunded start-up cannot afford to be out of production.
That could leave dealers short of product and would delay the introduction of other new models, including the 9-5 SportCombi wagon Saab revealed at this month’s New York Auto Show.
The proposed rescue deal would transfer the makers assets to Antonov, a Russian businessman who left Spyker before it purchased Saab. He would then provide a cash infusion and lease the facilities back to the Swedish maker. But the EIB is not satisfied with the proposal and has reportedly set a number of additional conditions.
What, if any, role GM might be asked to play in a Saab rescue is unclear. The U.S. maker has so far declined to comment.