Unpaid bills halt Saab car production
Transport company DB Schenker has stopped delivering goods to Saab Automobile because they haven't gotten paid by the Swedish automaker.
Rather than shipping supplies to Saab's Trollhättan factory, DB Schenker is holding most of the deliveries as collateral.
"We're now sending out a few deliveries which Saab is paying for. They can choose and it's primarily items which are essential for production," Schenker spokesperson Pierre Olsson told the TT news agency.
"But we're not going to release all deliveries before we get paid in full."
Olsson couldn't say exactly how many trucks loaded with goods destined for Saab remain still.
"We don’t want to get paid more. However, we haven't gotten paid in a long time. We're talking about significant amounts, in the millions, and for such a long time that it's become critical. We can't continue with losses indefinitely," he said.
Schenker took the decision to stop deliveries earlier in the week, causing a production stoppage at Saab's Tröllhättan factory on Tuesday.
Speaking with TT on Tuesday, Saab spokersperson Eric Geers refused to elaborate on the payment problems or a stoppage on the assembly line.
"We have 800 suppliers and I can't comment on our relations," he said.
"But, with so many suppliers, it's not strange that there can be stoppages."
But Håkan Skött, chair of the Trollhättan factory chapter of the IF Metall union, confirmed that production was halted because of problems with the delivery of supplies.
"I don't know how long the stoppage lasted, but there was a stop," he told TT.
Schenker's Olsson regretted that Saab had been behind on payments.
"We're not doing this to be mean. We don't want things to go badly for Saab. Personally, I think it would be really sad if Saab went bankrupt, but at the same time, we need to get paid," he said.
Svenåke Berglie, head of Fordonskomponentgruppen (FKG), a trade association representing Scandinavian auto industry suppliers, said that Saab has had trouble paying its suppliers on time.
"Saab has lagged in its payments and we've urged the company to rectify the matter. Clearly it's a problem when suppliers aren't paid on time," he told TT.
"All companies can have cash flow problems from time to time. However, Saab is a company that is being watched and they need to get things in order."
At the same time advertising agency Lowe Brindfors has cancelled all of its ongoing work for Saab because of unpaid bills.
Saab hasn't paid some of the agency's invoices from December, according to the Resumé newspaper.
"It's a significant sum, but out of respect for Saab, we're not going to say what it is," Lowe Brindfors CEO Bjarte Eide told Resumé.
Saab production lines were up and running as usual on Wednesday, according to spokesperson Thomas Schulz.
Reports that Saab had trouble paying its bills caused shares in the Swedish automaker's owner, Spyker, to dip in Wednesday morning trading in Amsterdam.
Spyker assured that Saab "has sufficient means to meet its immediate liquidity needs."
However the market was not assuaged and Spyker's share price slumped by 9.4 percent in early trading to 3.86 euros.
"Certain suppliers halted supplies to Saab Automobile pending discussions about payments and supply terms," Spyker said in its statement.
Saab Automobile continues to work on longer term solutions to further strengthen its financial position and improve its capital structure.
"Saab Automobile expects to resolve these issues in the short term, also to prevent any further disruptions in supply," it added.
The company "continues to work on longer term solutions to further strengthen its financial position and improve its capital structure."
The incident comes the week after Saab announced that its managing director Jan-Åke Jonsson was leaving for personal reasons.
Spyker also announced Friday that its losses had multiplied in 2010, soaring to €218 million ($309 million) for the year, against a loss of €23 million in 2009.
US General Motors owned Saab for 20 years but the Swedish company never made a profit during that period. In 2009, output plunged to 38,756 vehicles from 93,000 in 2008.
Spyker came in early last year and bought Saab off GM for $400 million.
Despite all the problems Spyker still has high ambitions for Saab,
Spyker hopes to boost production way up 80,000 this year, though the constructor still expects annual losses before a return to the black in 2012.
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Rather than shipping supplies to Saab's Trollhättan factory, DB Schenker is holding most of the deliveries as collateral.
"We're now sending out a few deliveries which Saab is paying for. They can choose and it's primarily items which are essential for production," Schenker spokesperson Pierre Olsson told the TT news agency.
"But we're not going to release all deliveries before we get paid in full."
Olsson couldn't say exactly how many trucks loaded with goods destined for Saab remain still.
"We don’t want to get paid more. However, we haven't gotten paid in a long time. We're talking about significant amounts, in the millions, and for such a long time that it's become critical. We can't continue with losses indefinitely," he said.
Schenker took the decision to stop deliveries earlier in the week, causing a production stoppage at Saab's Tröllhättan factory on Tuesday.
Speaking with TT on Tuesday, Saab spokersperson Eric Geers refused to elaborate on the payment problems or a stoppage on the assembly line.
"We have 800 suppliers and I can't comment on our relations," he said.
"But, with so many suppliers, it's not strange that there can be stoppages."
But Håkan Skött, chair of the Trollhättan factory chapter of the IF Metall union, confirmed that production was halted because of problems with the delivery of supplies.
"I don't know how long the stoppage lasted, but there was a stop," he told TT.
Schenker's Olsson regretted that Saab had been behind on payments.
"We're not doing this to be mean. We don't want things to go badly for Saab. Personally, I think it would be really sad if Saab went bankrupt, but at the same time, we need to get paid," he said.
Svenåke Berglie, head of Fordonskomponentgruppen (FKG), a trade association representing Scandinavian auto industry suppliers, said that Saab has had trouble paying its suppliers on time.
"Saab has lagged in its payments and we've urged the company to rectify the matter. Clearly it's a problem when suppliers aren't paid on time," he told TT.
"All companies can have cash flow problems from time to time. However, Saab is a company that is being watched and they need to get things in order."
At the same time advertising agency Lowe Brindfors has cancelled all of its ongoing work for Saab because of unpaid bills.
Saab hasn't paid some of the agency's invoices from December, according to the Resumé newspaper.
"It's a significant sum, but out of respect for Saab, we're not going to say what it is," Lowe Brindfors CEO Bjarte Eide told Resumé.
Saab production lines were up and running as usual on Wednesday, according to spokesperson Thomas Schulz.
Reports that Saab had trouble paying its bills caused shares in the Swedish automaker's owner, Spyker, to dip in Wednesday morning trading in Amsterdam.
Spyker assured that Saab "has sufficient means to meet its immediate liquidity needs."
However the market was not assuaged and Spyker's share price slumped by 9.4 percent in early trading to 3.86 euros.
"Certain suppliers halted supplies to Saab Automobile pending discussions about payments and supply terms," Spyker said in its statement.
Saab Automobile continues to work on longer term solutions to further strengthen its financial position and improve its capital structure.
"Saab Automobile expects to resolve these issues in the short term, also to prevent any further disruptions in supply," it added.
The company "continues to work on longer term solutions to further strengthen its financial position and improve its capital structure."
The incident comes the week after Saab announced that its managing director Jan-Åke Jonsson was leaving for personal reasons.
Spyker also announced Friday that its losses had multiplied in 2010, soaring to €218 million ($309 million) for the year, against a loss of €23 million in 2009.
US General Motors owned Saab for 20 years but the Swedish company never made a profit during that period. In 2009, output plunged to 38,756 vehicles from 93,000 in 2008.
Spyker came in early last year and bought Saab off GM for $400 million.
Despite all the problems Spyker still has high ambitions for Saab,
Spyker hopes to boost production way up 80,000 this year, though the constructor still expects annual losses before a return to the black in 2012.
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