Saab says production will be halted at least two more weeks

Article by Christian Andrei, on June 21, 2011

The suspension of Saab’s production at its factory in Trollhattan, Sweden, will be extended for at least two more weeks. Saab is owned by Netherlands-based Swedish Automobile (formerly known as Spyker). For most of April and May, this factory was shut down since it lacked inventory as it had not been able to pay its suppliers.

Although production resumed in late May, its parts supplies had ran out and it had to stop again. Saab spokeswoman Gunilla Gustavs said that there still won’t be normal production during weeks 25 and 26 (June 20-July 3).

Last June 9, Swedish Automobile said that Saab's production will be halted until it secured an agreement with all its suppliers. Gustavs said that negotiations with the suppliers are still ongoing. He said that Swedish Automobile is trying to “get everyone on board at the same time."

He announced that production for the 27-29 weeks (July 4-24) is expected to already be normal. If authorities in China and Europe approve the rescue deals that Saab has entered in the past few weeks with two Chinese car companies, Zhejiang Youngman Lotus Automobile Co. and Pangda, then its mid and long-term financing problems will be solved.

However, Saab still considers short-term financing as a problem. To have the cash to restart production, Saab is hoping that its factory will sell quickly.

Last Monday, Swedish business daily Dagens Industri said that talks had taken place last weekend with Swedish property company Hemfosa for a sale and leaseback deal for Saab’s plant and property in Trollhattan. Hemfosa is reportedly willing to pay about 300 million Swedish crowns ($46 million) for these properties.

Topics: saab, production

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