RIP Saab?
September 8, 2011
Struggling Swedish carmaker Saab was denied bankruptcy protection by a Stockholm court on Wednesday, quashing hopes of a last-ditch rescue attempt of the iconic Swedish brand.
Saab had filed for protection from creditors earlier in the day as it tried to buy time to reorganize its business and repay a mountain of debt. But the court said Saab's proposed restructuring program was insufficient.
"The court has concluded that there is not enough reason to believe that a company reorganization would be successful," the court said in a statement.
Saab's biggest union, IF Metall, said it "lamented the decision" after it said on Wednesday that bankruptcy protection "could be a good solution." The unions could now file for insolvency, and the outstanding wages could be paid for by a state-backed fund.
Payments have been late for three months in a row and Saab's 3,700 employees have still not received their August salaries.
Last-ditch attempt
On Wednesday, Saab and its Dutch-based owner Swedish Automobile said the group was "seeking the support of its creditors for the reorganization process."
Saab had hoped the reorganization would "secure short-term stability while simultaneously attracting additional funding," as it waited for a pending cash injection from already agreed partnerships with Chinese firms Pang Da and Youngman to get production moving.
Saab made a similar move in 2009. The carmaker had proposed Wednesday that attorney Guy Lofalk, who was involved in the 2009 process, be named administrator.
Swedish Automobile, formerly known as Spyker Cars, bought Saab from General Motors in 2010 with plans to turn the company around. But Saab, which builds cars with a small but loyal following, has struggled to stay afloat as many suppliers have refused to grant the company credit.
Rumors of Saab's looming bankruptcy had been circulating for some time. Production at the company's main plant in Trollhattan, in western Sweden, has been at a standstill since April.
Author: Nicole Goebel, Sam Edmonds (dpa, AFP, Reuters)
Editor: Martin Kuebler