Saab Nears Bankruptcy, Can’t Pay Staff

Financial turmoil has hit Swedish automaker Saab—again—with the car manufacturer admitting it was unable to pay its 1,500 factory workers last week.

A Saab spokesperson said that 2,200 office workers, designers, and engineers might not be paid as well. She said, “The last thing we want is to be forced to come with this very sad news the day before a major Swedish holiday. We would not have done this if we were in a situation where we had an alternative,” reported the BBC.

At this stage, 3,700 Saab’s wages and salaries are at risk. The development was confirmed by its Dutch parent company, Swedish Automobile NV.

The Netherlands-based owner Swedish Automobile NV said in a statement, “Swedish Automobile and Saab Automobile are in discussions with various parties to obtain short-term funding, including via the sale and leaseback of the real estate of Saab that was announced previously, and with their financiers in connection with current financing arrangements. These discussions are ongoing.”

The recently renamed Swedish Automobile is a small luxury sports car producer formerly known as Spyker, which had bought Saab. Saab was a part of General Motors until it was bought by Spyker to resuscitate it from liquidation.

Saab’s production plummeted from 123,000 in 2007 to 33,000 in 2010. Since the global financial crisis, the Swedish automobile brand has suffered dramatic losses of at least 300 million kronor (US$47 million) in debt to local suppliers, said the country’s auto supplier association FKG, according to Bloomberg estimates.

Saad earlier this month announced several partnerships with Chinese companies to obtain funding, including Chinese car distributor Pang Da, and auto manufacturer Zhejiang Youngman Lotus Automobile.