Saab has temporarily stopped production because of problems in its supply chain

Article by Christian A., on June 9, 2011

Saab has temporarily halted its production due to problems in its supply chain but aims to resume its operations as soon as possible, the company has disclosed. The company is currently facing shortages in components supply after its Trollhatten plant in Sweden was shut down in April and May due to unpaid bills from its suppliers.

Victor Muller, the company's chairman, stated that it has a few thousand suppliers from around the world, with whom it has to reach acceptable conditions and terms in order to resume deliveries of stocks. Restocking may take time, considering that many of the company's suppliers are based outside Europe.

The chairman further disclosed that the company has made deals with the vast majority of its suppliers. He is also "confident" that the company will reach agreement with the remaining suppliers "in the coming days" that will help stabilize its operations and production.

Muller informed ANP-Reuters that some of the suppliers were demanding upfront payments rather than accepting credit lines. Furthermore, he stated that he expected the production would be down for days rather than weeks.

He asserted as well that there’s no risk to the negotiations with Chinese auto dealer Pang Da falling through. Saab resumed production last May 27 after Pang Da provided a cash injection by concurring to purchase 30 million euros worth of Saab vehicle units.

Unfortunately, production halted again on Tuesday and Wednesday due to parts shortages. Saab disclosed in a Thursday statement that to prevent interruptions due to irregular inflows of certain components, it has decided to suspend production for the meantime.

Topics: saab, production

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