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Saab’s travails drag on

Delay: Production at Saab's Trollhattan plant stalled in April as key parts-makers began to withhold parts because of unpaid bills.

Suppliers move on Saab debts as Swedish company looks to its future in China

26 Jul 2011

SAAB Automobile is pressing ahead with plans to make cars in China, even as eight Scandinavian suppliers enlist Sweden’s Debt Enforcement Agency to collect unpaid bills from the troubled car-maker whose four-month-long production shut-down is set now to roll on to at least the end of August.

Cash-strapped Saab has blamed the latest production delay at its Trollhattan plant on the industry-wide summer break, saying certain key parts-makers could not supply in time for Saab to resume production on August 9 as previously scheduled.

But restless suppliers seem far from happy, with one Swedish tool-maker, SwePart, taking action last week to have a Saab subsidiary declared bankrupt over unpaid debts.

Although Saab said that action had been resolved, Bloomberg reports eight other suppliers have now formally asked the Debt Enforcement Agency to collect debts owed to them.

Bloomberg quotes agency case worker Christina Lindberg as saying: “We will start the collection process in a few days.”

A total of 104 debts have been registered against Saab with the agency, with some companies filing more than one debt.

Production at Trollhattan plant stalled in April as key parts-makers began to withhold parts due to unpaid bills.

 center imageLeft: Saab Automobile vice president of production and purchasing Gunnar Brunius. Middle: Saab production. Below: Saab 9-4X.

Announcing an extension to the production hiatus, Saab Automobile vice president of production and purchasing Gunnar Brunius said Saab needed a full commitment on supply of parts into its factory to be able to restart production and secure a stable manufacturing operation.

“We are now working hard with our suppliers to nail down these plans, commit to a delivery schedule and start building the close to 11,000 cars that we currently have in our order books,” he said.

“The industry-wide summer break at our suppliers caused certain key suppliers not to be able to supply us in time.

“Saab Automobile hopes to restart production earliest in week 35 provided that it is able to commit to a delivery schedule with its suppliers.”

While Saab is fighting for its life in Sweden, it is continuing to make plans to enter the Chinese market.

Media reports from the world’s biggest motor market suggest the city of Tianjin – south-east of Beijing – is the front runner for the joint venture plant to be established by Saab and its new part owners Zhejiang Youngman Lotus Automobile Co Ltd and Pang Da – one of China’s biggest dealer groups.

China Car Times reports a factory capable of building 150,000 cars a year is being planned for China, but is at least two years away. Media reports say the decision on the plant’s location might be made by next month.

Tainjin is home to a new Great Wall Motors factory and a major automotive parts and car import hub.

In the United States, the company is continuing to roll out its new 9-4X SUV, giving it at least some showroom action.

Made in Mexico by former Saab owner General Motors, the 9-4X is the only Saab vehicle unaffected by the Saab troubles, at least for now.

The flow of vehicles will provide at least some cash-flow for Saab, which recently sold its property to a consortium of Swedish investors to raise 255 Swedish krona ($A37 million).

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