Extremely vulnerable position for the Saab at the moment
Jonas Fröberg
Perspective Jonas Froberg PERSPECTIVE:
August 31, 2011 at 20:23, Updated: August 31, 2011 at 21:24
Saab makes one billion loss and is extremely close to bankruptcy or reorganization. The loss in the first half landings of 1.8 billion according to the deferred report released on Wednesday night. Meanwhile, Muller who obsessed to get a billion in bridge financing and a looming China Business. But it needed even more. It's Saab's big challenge.
Today, somewhere in Europe: Think Victor Muller as a boxer leaning forward staggers around the ring after 18 rounds while bankruptcy furiously pounding on the door. Muller have to get another bridge financing. Now.
While in Trollhattan: On Friday at 16:15 to IF Metall initiate the process to put the Saab in bankruptcy, the enforcement service roots ever deeper in Saab's bank accounts and suppliers are joining in the bailiffs queue. Some suppliers threatens literally the bankruptcy of another favored.
News agency Bloomberg reported on Wednesday that Muller is close to getting a loan from one of the five largest banks in Europe of around 1 billion. It can get a bridge loan to Saab's next big landmark - that authorities in China say its about the looming China deal that will provide 2.2 billion.
Say that he still receives his billion to finish. Survives Saab then?
The answer is that it needed much, much more.
If we back a few steps: Saab was purchased entirely with borrowed money (as Tarver great expense) of Spyker winter of 2010 and then had too little cash in the bank to cope with a bumpy road.
Then came three big things.
1st It took much longer to get production going than you thought.
2nd The same applied to the sales organization, which had been shattered.
3rd In addition, regained confidence not at the pace they wanted.
Everything costs much more money than planned. Saab road became passable severe frost damage as a northern forest.
They sold too few cars, drained cash, stopped paying vendors - who hit the rear and sensitive production was stopped.
It was in early April. For five months ago. As long as the factory has been empty and deserted - without any of the 3,700 employees redundant.
It's bizarre.
Still, Saab remains.
The answer is that everyone puts his faith in Victor Muller. He has traveled in China, USA and Europe, and suspended 1.5 billion, mainly through loans and advances - that must be paid back. He has kept the fiery powerointpresentationer about Saab's new models, an expanded sales force and a new car platform Phoenix as he has become blue in the face. The message is that everything should be fine - as long as he gets money.
Let's say he gets his one billion. What happens then?
The immediate risk of bankruptcy averted and wages can be paid. But the big question of the factory can be started is a horror film - each of the 820 providers should be encouraged to accept payment plans for liabilities and reasonable payment terms. Many suppliers have already kicked some of their staff.
They must be persuaded to believe that Saab can survive long term. And again, the burning question of whether Saab's China business. And especially if China's authorities will approve the dream deal. It is uncertain and can bring brutal spanner in the works.
But even if production started coughing, which will take time, Saab has terrible challenges ahead.
- Saab's debt mountain is huge and has grown exponentially the past six months. It has also been GM and Opel to defer the payments. Everything puts a stranglehold on the Saab.
- Saab is also facing major investments in product development, particularly the extremely expensive production tools, the new 9-3 model.
- In addition, the company, not least, to regain the confidence of buyers.
It can only be done if there is a stable financial path forward. Although China deal goes through, Muller receive additional money.
You should never count out Muller, but the slack rope than this is the adventurous Dutchman never walked on. Ever.
Jonas Froberg Reporter Enterprise
08-13 52 92 jonas.froberg @ svd.se