This week Saab’s bosses said that they had sold a 17 percent stake in the company to the GEM Global Yield Fund Ltd, but city estimates reckoned that the deal would raise no more than £5m, a sum which will hardly tide the company over for much longer. Alarmingly, a report on a Chinese website claims that Saab’s Chinese investors cannot make any further investments, while Saab is ‘in financial trouble’.
Since GM decided to sell-off the company in 2009, Saab has had numerous near-death experiences, but always managed to avoid the graveyard. Saab’s current difficulty lies in the fact that it couldn’t generate enough cash to keep the manufacturing operation rolling, with the 9-5 estate and 9-4x SUV coming on line too late to make a difference.
Ironically, work on the new 9-3 and Phoenix Platform is probably still going ahead, because this work is being funded by a ‘ringfenced’ European Investment Bank loan.Perhaps Saab could do what The Times newspaper did back in the late 1970s during an industrial dispute. Close down the manufacturing operations for a year and then re-open next autumn with the new 9-3 and refreshed 9-5 running down the production lines. Although manufacturing staff would have to be laid off, there’s a good chance that most could be re-hired in a year’s time. Of course, that would leave dealers with no new cars to sell, but maybe second-hand and servicing work would help most hang on for a year.
Such desperate measures - or, more likely, complete collapse, followed by Chinese investor Youngman picking up the pieces - were looking increasingly likely this week. And then, as if by magic, Saab’s shares jumped 28 percent yesterday after the Swedish business daily Dagens Industri claimed that a ‘big US investor’ was about to get involved in Saab, helping restart the factory. A deal could be announced in days, apparently. Maybe Saab bosses have, once again, avoided the car maker being towed off to the great scrapyard in the sky.