Saab Bankruptcy Leads to Warranty Concerns

SAAB, a company that was once renowned for style and sophistication, a thinking person's car, is now in its death rattle.

After its parent company, Swedish Automobile NV, applied to a Swedish court to put three critical parts of the enterprise, Saab Automobile, Saab Powertrain and Saab Automobile Tools, into bankruptcy, the status of warranties on new Saab cars sold here remains under a cloud.

There are about 50 unsold new Saabs in local dealerships and in the Australian distributor's stock, on top of sold Saabs still under warranty.

Last year, Saab sold just 14 cars Australia-wide from eight dealerships. This year it faired better with the release of a new 9-5 model in April, which boosted the brand's sales tally to 139 cars so far.

As the Swedish court is yet to appoint an administrator, it was too early to know how the factory-backed warranty applied, the managing director of the local distributor Saab Cars Australia, Stephen Nicholls, said.
''The new car warranty provision is held by the factory in Sweden, which is one of the entities that's gone into bankruptcy,'' he said.

''At the moment were seeking clarification from the factory how that's going to work.
''That is something that's a question mark.''

Saab spare parts supply is secure, as the global parts distribution company, Saab Parts AB, continues to trade normally, Mr Nicholls said.

Production of Saabs in Sweden has halted and there are no further shipments en route to Australia.
A similar warranty concern confronted Rover and MG buyers when the British group became insolvent in 2005.

In Australia, Rover and MG warranties were honored after dealers rallied to find a reinsurer willing to take on the risk - an approach Saab might follow.

''That's a logical alternative that would be evaluated, but we're not doing anything on that front at the moment,'' Mr Nicholls said.

Mr Nicholls said he expected that Saab would maintain eight dealerships, its 20 authorised repairers and the six staff at Saab Australia.

''Our plan is to cut our costs locally, restructure a little bit, and carry on supplying parts for the dealers,'' he said.

Already the cars are being heavily discounted, with one online retailer slashing $11,000 from the Saab 9-3 model and $16,000 from the Saab 9-5.

The Australian Competition and Consumer Commission was still researching the issue last night after being approached for comment.

Read more: http://www.smh.com.au/national/saab-bankruptcy-leads-to-warranty-concerns-20111220-1p41t.html#ixzz1h5NjGAlj

Read the rest of this entry »

Posted in automaker bankruptcy , Saab bankruptcy

Saab Cruising Closer to Bankruptcy

The administrator in charge of Saab's restructuring under court protection could pull the plug on the process as early as Tuesday, paving the way for declaring the carmaker bankrupt, daily newspaper Svenska Dagbladet reported.

Saab has struggled for months to stave off collapse, seeking new investors and selling off assets so it could pay suppliers and employees and resume production at its plant in Sweden. But it has still not received a vital bridge loan of €70m (£61m) that was secured by Chinese car firm Youngman, money that is key to its short-term survival.

The paper said negotiations were ongoing in the Swedish capital with Youngman, but the court-appointed administrator could decide as early as Tuesday to ask a court to end Saab's period of protection from creditors.

The administrator, Guy Lofalk, could not immediately be reached for comment.

Saab spokeswoman Gunilla Gustavs said the carmaker still expected to get the bridge loan. "We are still expecting the Youngman loan to come in," Gustavs said. She had no comment on when the money was expected or how long Saab could last without the cash.

Saab won breathing space from creditors in late September, but still needs fresh money to pay wages and suppliers while it restructures.

If the restructuring process looks unlikely to succeed, Saab's creditors, the administrator or Saab itself could ask for creditor protection to be withdrawn, Cecilia Tisell, a judge at the local court, told Reuters.

She said the court had not received any request of that kind.

"No, we have not heard anything like that at all from the Saab companies or Guy Lofalk," she said.
Victor Muller, chief executive of Swedish Automobile which owns Saab, declined to comment.
Swedish Automobile shares fell 7.2% by mid-morning.

Saab had hoped protection from creditors would allow it to survive until China's authorities approve a €245m investment by car firms Zhejiang Youngman Lotus Automobile and Pangda.

A decision by China's National Development and Reform Commission could come as early as Friday.
The paper also quoted Swedish Debt Office spokesman Daniel Barr, who rejected media reports the government could pay off Saab's debt to the European Investment Bank and convert the security on the loan to shares in Saab.

"No, the Debt Office does not have any such mandate," he said.

Click Here to read the original article.

Read the rest of this entry »

Posted in carmaker bankrupt , creditor protection , Saab bankruptcy

Saab Files For Bankruptcy Protection

STOCKHOLM—Saab Automobile AB Wednesday filed for protection from its creditors, in a move that buys time for the Swedish car maker to secure additional short-term funding to restart production.

The filing, similar to a Chapter 11 filing in the U.S., wasn't unexpected. Labor unions representing employees at Saab Automobile who weren't paid last month were due Wednesday to consider forcing the company into bankruptcy proceedings so that workers could seek state unemployment benefits.

Saab would have to consider filing for bankruptcy if it isn't granted protection from its creditors, it said in its application to the district court in Vanersborg.

But Victor Muller, chairman of Saab Automobile and chief executive of parent Swedish Automobile NV, said it was too soon to speak about that. "It's not appropriate to discuss bankruptcy," he told reporters in Trollhattan.

Saab Automobile has struggled with its finances for months. Production at its plant in the Swedish town of Trollhattan has been halted since April.  continued....

CloseIn a bid to solve its long-term funding needs, the company this summer signed agreements with two Chinese com

Read the rest of this entry »

Posted in automobile bankruptcy , Chapter 11 Bankruptcy , Saab bankruptcy

Unions Warns of Saab Bankruptcy If Wages Remain Unpaid

(RTTNews) - Swedish automaker Saab Automobile AB (SAAB-B,0GWL.L: News ) could be forced into bankruptcy if fails to pay wages by the end of this week, the Wall Street Journal reported Monday, citing one of the company's labor unions, IF Metall. Saab Automobile is owned by Dutch automaker Swedish Automobile N.V.

According to the WSJ report, a lawyer at IF Metall said that on August 26, Friday, Saab Automobile received requests for payment of 1,486 union members' wages for August.

The cash-starved company has seven days to pay its staff once it receives the requests, failing which, IF Metall could file for a Saab Automobile bankruptcy at the district court. The process will ensure state coverage of wages in the event of the automaker's failure. The union has three weeks to file for a bankruptcy, or its claims will fall.

Saab Automobile was due to pay its blue-collar employees on Thursday, August 25, and its white-collar workers the following day. However, the company said last Tuesday that it may be forced to postpone payments as "committed" funds from investors may not arrive in time. The company also said there could be no assurance that the necessary funding will be obtained or the funds collected.
Unionen, the union for Saab Automobile's white-collar workers, which has about 1,000 members, is now reportedly gathering from its members pay slips that have not been honored, and expects to send requests for payment to the company Tuesday.

August is said to be the third straight month that Saab Automobile has failed to pay wages on time to its approximately 3,600 employees. The company reportedly paid salaries to its workers about a week late in June and July.

Saab Automobile, which has halted production at its Trollhattan plant in Sweden since April this year due to unpaid supplier bills, was seeking to resume production during the week beginning August 29 at the earliest. It has been scrambling for short and medium-term funding to pay suppliers and employees as well as to restart production.


Sweden's Debt Enforcement Agency has reportedly started a collection process on August 16 after Saab Automobile missed a deadline to pay suppliers. More than 100 debt claims are said to have been filed against Saab with the collection agency.

Swedish Automobile, the owner of Saab Automobile, said last Friday that it will publish its financial results for the half year period on August 31 instead of the previously-announced date of August 26. The company said it was still in the process of finalizing the semi-annual report.

On the Stockholm stock exchange, SAAB-B closed Monday's trading at 129.00 Kronor, up 7.00 kronor or 5.74 percent on a volume of 42,377 shares.

Read the entire story here.

Read the rest of this entry »

Posted in automobile bankruptcy , Saab bankruptcy