Saab admits it cannot pay wages

Unions at Saab demand payment by Monday or they will start legal action that could end in bankruptcy for cash-strapped Swedish carmaker Saab said on Thursday it could not pay wages to employees because it had not yet obtained the necessary short-term funding to do so. Unions said the troubled carmaker had until Monday to pay their wages or they would start a legal process that could end in bankruptcy for the company, owned by Netherlands-based Swedish Automobile. IF Metall and Unionen said they would send a formal demand for payment if their members did not receive their wages. “Then the company has seven days to react,” said IF Metall representative Veli-Pekka Saikkala. “After that there are two alternatives. Either we see that the situation can be solved, or we demand that Saab is put into bankruptcy.” The cash-strapped carmaker is scrambling for funds to restart production after it was halted for most of April, May and June because it could not pay suppliers. Swedish Automobile and Saab are in talks with various parties to obtain short-term funding, including options such as a sale and leaseback of Saab’s real estate. “There can, however, be no assurance these discussions will be successful or that the necessary funding will be obtained,” Saab said. Swedish Automobile this month agreed a rescue package for Saab from two Chinese car companies, Zhejiang Youngman Lotus Automobile Co and Pangda, that would solve longer-term financing problems if approved by authorities in China and Europe. Saab spokeswoman Gunilla Gustavs said it was not possible to say when salaries would be paid: “That depends on when and if we can secure short-term funding, for example through the real estate deal. “This is really bad news and we are working intensely to do something about it. There are no guarantees but we are not giving up.” Saab said the Trollhattan factory in southern Sweden would remain idle until at least the end of next week, while the company holds talks with suppliers. The Swedish government declined to comment. Saab Automotive industry Sweden guardian.co.uk

Posted by on June 23, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.