Unions at Saab threatened to take the company into bankruptcy over unpaid wages

Article by Christian A., on June 22, 2011

The IF Metall and Unionen groups, unions at Saab, have threatened to commence a legal proceeding, as the company has been unable to pay wages to its workers. This proceeding has the potential to take the company into bankruptcy.

According to the unions, they would be sending a formal demand for payment on Monday for their unpaid members.

The company then has seven days to react, Veli-Pekka Saikkala, spokesperson for IF Metall, informed Reuters. He said that this scenario will end up either getting resolved or the unions will demand Saab to enter bankruptcy.

Earlier on Thursday, the automaker disclosed that it could not pay wages to its workers because there was no short-term financing.

Saab and its owner Spyker Cars NV, which is now known as Swedish Automobile NV, are still negotiating with various entities to obtain the necessary short-term financing such as the proceeds from a possible sale-and-lease-back deal on Saab's real estate.

Spokesperson for Saab, Gunilla Gustavs, stated that it could not be determine as to when the company could pay the employees’ salaries, as it will depend on the company’s ability to obtain the needed short-term funding. He added that the company is working “intensely” to remedy the situation, and that there are “no guarantees” although the company is not “giving up."

This month, Swedish Automobile has obtained a rescue package for Saab from two China-based vehicle companies: Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automobile Co. If approved by the authorities in Europe and China, the deal would solve long-term funding problems, the company disclosed.

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