Despite Funding Commitments, Saab Still Can't Pay Workers

July 26, 2011
2011 Saab 9-5 Aero

2011 Saab 9-5 Aero

In the past few months, Swedish Automobile (Saab’s parent) has signed agreements with Chinese partners Pang Da Automobile Trade Co, Ltd. and Zhejiang Youngman Lotus Automobile Co, Ltd. worth an estimated $245 million. They’ve sold real estate holdings, including their factory in Trollhattan, for another $40 million.

Despite having nearly $285 million in the pipeline, Saab still can’t make payroll. Some 1,600 white-collar workers, or 45 percent of its employees, won’t get paid in July, drawing more speculation that the automaker may have burned though the last of its nine lives.

As with all investments, there’s a difference between “funding committed” and “funding received." Saab may have plenty of cash on paper, but unless there are funds in the bank to back it up, workers won't be paid. Worse, Saab won't even speculate on when (or if) the expected funding will materialize, which can't be reassuring to the workers affected.   

The automaker is tentatively scheduled to restart production at the end of August, but that assumes existing suppliers are willing to sell it components. It also assumes that unpaid workers will be willing to give the struggling automaker one last chance.

[Saab, via Motor Authority]

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