Saab Files For Bankruptcy Protection, Braces For The Inevitable

By Blake Z. Rong | September 07, 2011
In the end, it was only a matter of time. Saab, delaying the inevitable since they were spun off from GM in 2010, has filed for "voluntary reorganization," seeking to secure short-term funding and protect themselves from creditors. It's up to the Swedish courts to decide whether Saab gets the chance to reorganize, a move similar to filing for Chapter 11 in the US. But for now, Saab North America remains unaffected by the decision: only subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB are directly affected by the reorganization filing. If the court approves Saab's decision, an independent court-appointed administrator will work with the company's management to restructure its assets and appease its investors. The entire process would take three months, and focus on avoiding a declaration of bankruptcy. Saab CEO Victor Muller is taking a captain-of-the-Titanic approach to the news, optimistically declaring: "I believe that Saab Automobile will emerge stronger from this process. The potential for Saab Automobile as a viable, independent premium car manufacturer is there, as shown by the rejuvenation of our product portfolio, approximately 11,000 orders and the conditional long-term funding already in place through the binding agreements with Pang Da and Youngman that will give us access to the Chinese market."
Muller is banking on the deal recently inked with Chinese auto distributor Pang Da and automaker Zhejiang Youngman for a 53.9-percent stake in Saab, at the tune of $351 million. The Chinese government is currently awaiting approval on the deal, but both Chinese companies approve of the restructuring. This is all another misstep in the recovery of Saab, which over the past year has seen itself unable to pay both employees and suppliers. The company hasn't produced a car since June, and its Trollhättan plant has been idling since then. It will be a shame if Saab goes gentle into that good night, as the company's new 9-5 and 9-4X are the strongest products it has had in years. Whether fortune smiles on the Swedish maker once again is anybody's guess.
Joel A
Joel A

I'm curious. If Saab does go bankrupt, what happens to all the Saab vehicles here in the 'states ala where do they get their repairs?