Sasb can't pay employees

[eridani]

http://www.manufacturing.net/News/2011/06/Automotive-Saab-Can-t-Pay-Workers/

Saab's owner said Thursday it doesn't have the money to pay employees' wages, deepening the financial crisis that is pushing the struggling Swedish brand ever closer to ruin.

Dutch owner Swedish Automobile, previously known as Spyker Cars, has courted Chinese and Russian investors and put the Saab factory up for sale in its attempts to revive the brand it took over from General Motors Co. last year.

But after months of production stoppages and problems with paying suppliers, Saab said the situation is so dire that it won't be able to pay its 3,700 employees, adding to doubts over how long the brand can survive.

"I do not see a future for the car maker in the current position," said Ferdinand Dudenhoeffer, an auto analyst at the University of Duisburg-Essen.

Analysts have sounded the death knell for Saab several times since Spyker, a small luxury sports car maker, bought it from GM last year for $74 million in cash plus $326 million worth of preferred shares. Skeptics questioned how Spyker and its smooth-talking CEO Victor Muller could turn around a car maker that posted loss after loss during GM's ownership.

But every time the company appeared to be on the edge of bankruptcy, Muller came up with a new lifeline. His latest move was lining up two Chinese investors -- Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co. -- in a deal to make and distribute Saab in China. The deal has not yet been approved by Chinese authorities.

[JohnnyRingo]

1. They were among the top ten companies slated to fail next year

With only 38,000 units sold last year, there's no way to carry on making cars. GM, after buying the Swedish hallmark in the mid '90s, sold it in 2008 as part of it's post-bankruptcy plan. It was unfortunately only a matter of time before it began circling the drain. I hope someone steps in and saves it from the narrow interests of Stryker.

Incredibly, Sears is also predicted to go down in the next 12 months. The main holding company includes K-Mart, and seeks to eliminate the overlap of goods and territory to focus on free standing stores instead of expensive mall locations. Sadly, I can't imagine why anyone would go to Sears when we can buy the same thing (including Craftsman tools) at a K-Mart, but therin lies the problem.

Though it's striking to realize we've become a WalMart and Dollar General economy, it's clear that a lack of working class money is causing a ripple effect through the retail market. I've yet to hear any of these threatened companies claim their woes lie in the high taxes constantly bemoaned by Republicans.

[Sherman A1]

2. Precisely

the lack of working class dollars is indeed a good portion of the problem. Another is an aging demographic.... the boomers simply don't need as much "stuff" at this point as they look to downsize their households, make do with what they have (due to job loss or empty nest, etc), shift their purchasing to prescription drug, or supporting their children who have returned home or paying on their college educations, instead of kitchen appliances, etc.

There are lots of factors in play........

[Crazy Dave]

5. Online retailers are doing quite well

You can get a big screen TV $50 cheaper online and have it shipped free to your front door. Who wants to drive and pay $3.50+ gal. for gas, park, wait for a rude salesperson to help you and then drive back home?

[golfguru]

3. It is a simple case of US standard of living degrading to world levels

US had the monopoly on manufacturing after world war II.
The industrial leaders of that era, Germany, Japan & UK factories were largely leveled.

That situation allowed US to raise living standards well into the 1980's until manufacturing in Japan, Germany, Asian countries began it's parabolic ascent.

We no longer have the monopolistic advantage for export ofmanufactured goods since countries with 8 times larger population (China+India) can now manufacture anything we can at fraction of the cost. If we impose tariffs on imports, our cost of buying goods will increase in direct proportion to any wage increases here, meaning zero improvement in living standard.

[CHIMO]

4. Saab handed lifeline as carmaker wins order from Chinese company

Saab has pledged to pay its 3,700 staff after an order from China injected much-needed cash into Swedish Automobile, the parent company of the ailing carmaker.

A €13m (£11.6m) deal for more than 500 cars from an unnamed Chinese company is good news for factory employees, who did not get paid last week, said a Saab spokeswoman, adding that it could help suppliers lift an embargo that has brought production to a halt.

"It allows us to pay our employees' wages and some of that will go towards the next step, which is coming to an agreement with our suppliers about production," she said.

Work at Saab's Trollhättan factory has been halted until 4 July at the earliest, leaving the company with a backlog of more than 10,000 vehicles. The spokeswoman said talks over a sale and leaseback of the facility were continuing as the Dutch-owned manufacturer seeks a short-term cash injection to tide it over until long-term investors are found.

http://www.guardian.co.uk/business/2011/jun/27/saab-lifeline-carmaker-chinese-order