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Saab May Not Be Saved After All: New Owner Being Forced Into Bankruptcy

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We thought it was over. We thought that someone, somewhere had a solid plan to make Saab profitable -- something GM and Spyker were sadly never able to do.

Unfortunately, Detroit News tells us that our hopes may have been in vain, because Saab's most recent "savior" could be heading for bankruptcy court. 

IN OUR LAST EPISODE...

Back in December, Saab's new owner, National Electric Vehicle Sweden (which is actually based in China and Japan) reopened the factory doors and began producing the Saab 9-3 Aero sedan. Sales were limited to Saab's home country of Sweden and everyone's new favorite auto market, China, but there were plans to roll out the 9-3 Aero to other markets soon.

While that seemed like a sensible, slow-and-steady plan, something about it felt slightly odd. You see, when NEVS bought the company, it announced a grand vision for Saab, with plans to relaunch the quirky, beloved brand as an electric car company. But the next thing we heard, the first Saabs off the line would be gasoline models, with electric ones to come later, in the spring of 2014.

That was an undeniable compromise -- one that was clearly made in the interest of cash flow. And when companies start making such huge compromises, it's a sign that they're realizing they've bitten off more than they can chew. In such cases, money troubles are usually just around the corner. 

Our fears were confirmed in May, when Saab suspended production of the 9-3 due to "short term cash problems". According to NEVS, one of the company's major investors "[had] not fulfilled their contractual obligation to finance the operations".

It's sad to be right sometimes.

RECENT DEVELOPMENTS

Now, Swedish supplier Labo Test claims that NEVS has failed to pay invoices of 150,000 kronor ($21,868) for Labo's testing equipment. Yesterday, Labo petitioned a judge, asking that NEVS be forced into bankruptcy. NEVS has responded with this statement on its website:

"Nevs hereby clarify that the company is not insolvent. The company does not have enough liquid cash as today to pay all outstanding debt but Nevs’ assets are larger than its debt. Nevs today cannot say exactly when, but Nevs’ suppliers will get paid."

NEVS goes on to say that Labo Test has agreed to withdraw its bankruptcy petition, though it's unclear whether when/if that will actually happen. And even if it does, NEVS is still facing the same problem that Saab has faced for years: it needs to be bailed/bought out to survive. Saab's future depends on partnerships with other companies, who offer resources NEVS doesn't have:

"During the summer, the dialogues with the two major vehicle manufacturers have continued and developed in a positive direction. It is a thorough evaluation process that is still ongoing, and the discussions have not been finalized yet.

"After the funding is secured, and after that Nevs business plan is updated together with its new partners, Nevs will be able to make the decision on when the Trollhattan factory can resume its production."

 Who are those two manufacturers and what will they do for the company? NEVS doesn't get into specifics, though in May, the company noted that:

"Nevs has recently signed a frame agreement with a major international automotive OEM regarding the cooperation in product development of the future platform. A negotiation with another major automotive OEM is also taking place regarding part ownership. The objective is to add significant resources to the development of Saab as a global premium car brand name. The partnerships will contribute to secure Nevs with the right financial and technical support to develop new products and distribution of cars on a global basis." 

None of that inspires us with confidence. None of it reassures us that anyone at NEVS knows what they're doing with this beloved brand.

We certainly wish NEVS the best, but we're not holding our breath for Saab's return. It would be nice to be wrong this time.

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