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Saab seeks protection from creditors

The Swedish carmaker Saab Automobile filed for bankruptcy protection on Wednesday.

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(Antler)

The Swedish carmaker Saab Automobile filed for bankruptcy protection on Wednesday.

Bloomberg reports that the 64-year-old company, which was forced to halt production several months ago, "applied for court protection from creditors in a bid to raise money to restart operations and avoid a bankruptcy petition by unions."

“The reorganization is a move to stabilize the company in this tremendously rocky period,” Chief Executive Officer Victor Muller told Bloomberg.

Saab's previous owner, General Motors, began liquidating the company in early 2009, before selling it to Spyker Cars NV in February 2010 for around $400 million.

Saab has had to delay paying its workers for the last three months, and labor leaders had begun a process that could have led to a bankruptcy declaration, Bloomberg reports. The labor leaders now say they will hold off, and Muller told reporters the company intends to pay its creditors in full, according to the BBC.

But analysts are not convinced the company can survive.

"I'm just amazed that Saab is still alive at this stage," Jay Nagley, of Red Spy Automotive, told the BBC. "It is like a wounded animal. You think it is dead, but then it goes and twitches again."

"The key issue is which motorist in their right mind in Europe or the US would choose to buy a Saab?," Nagley also said. "Why would you risk buying an expensive new car if the manufacturer might not be around in three years time?"

Saab said it will present a restructuring plan to creditors within three weeks. Bloomberg reports that a court will rule on whether to accept the reorganization filing on Thursday.

Saab sales peaked at 133,000 vehicles in 2006, but have fallen since. In 2010, the company sold just 31,696 cars. Saab has around 3,700 employees.

“We still have some hopes, but when they can’t pay salaries you know it’s near the end,” Maria Salo, whose husband works at Saab, told Bloomberg. “I’m just glad we both don’t work there.”

http://www.globalpost.com/dispatch/news/regions/europe/110907/saab-auto-bankruptcy-protection