Saab future looks bleak
09 December 2011
Author: Rupert Saunders Paul Barker
The future of the Saab brand is hanging in the balance, with the carmaker's administrator applying to end its bankruptcy protection on Friday 16 December in a move that would pave the way for creditors to put the business into insolvency.
Saab GB, the wholly owned subsidiary of Swedish Automobile NV (Swan) - which owns the Saab brand and has exclusive rights to distribute cars and parts in the UK - was also placed into voluntary administration at the beginning of this month.
The move follows months of intensive negotiations and a long period of suspended production and tight liquidity. Grant Thornton has been appointed Saab GB?administrator while issues involving the parent company, potential Chinese investors, and former owner GM, which still provides hardware for Saab models, are in the process of being resolved.
In a brief statement, Saab GB, which employs 55 people in Milton Keynes and distributes the cars and parts to a 58-strong dealer network across the UK, said administration gives the company and creditors the necessary legal protection until it has secured the required funding for the company.
"The administration is a consequence of the problems of the holding company in securing finance as well as stoppages in production," said David Dunckley of Grant Thornton. "It is clear that the key to ensuring a future for Saab GB is the financial restructuring of the wider Saab group, whose directors we understand are currently in negotiations with potential Chinese automotive concerns."
Swan has received a conditional funding commitment from Chinese car manufacturer Youngman to pay the wages of Saab employees and for the continuation of Saab GB. But Saab and Saab GB have not yet received this funding, and Saab's factories have been shut since April while the funding issue remains unresolved. Saab GB has continued to deliver cars from its stocks, although only 24 were registered in November and 60 in October.
Richard Sedgwick, dealer principal at Turners Hill Garage, Crawley, and former Saab dealer council chairman, said some customer orders had been cancelled due to the uncertainty, but legal obligations on warranty had been honoured. He added: "We have obligations to our customers and no one is off the road because of a shortage of parts. Sweden's parts operation has been very helpful and Saab owners have not been inconvenienced."
Meanwhile ALD Automotive, which manages the own-brand leasing operation Saab Contract Hire, declined to comment on the ongoing situation.
A Saab GB customer hotline has been set up on 0845 300 9593.