Saab says its salvage process is in jeopardy

Friday, December 2, 2011, Vol. 35, No. 48

STOCKHOLM (AP) — The owner of Saab Automobile says its court-appointed administrator doesn't think the cash-strapped car company has a future and has applied to end the salvage process.

Saab, owned by the Netherlands-based Swedish Automobile N.V., said Wednesday the court has given it less than a week to come up with a plan or be declared bankrupt.

Saab says it will fight the decision, like it did earlier this year when a court gave it a few days to present an answer to a similar application by the administrator.

"We still have five to six days to do it," Saab spokeswoman Gunilla Gustavs said. "We're continuing to talk with the Chinese to reach a solution."

Saab has been fighting for survival since 2010, when General Motors Co. sold the loss-making brand to Dutch company Spyker Cars, which has since changed names to Swedish Automobile, or Swan.

Production has been suspended at Saab's main plant in Trollhattan, southwestern Sweden, for most of the year while the company struggled to pay suppliers and its 3,700 employees. It entered bankruptcy protection in September after a court gave it three months to reorganize and solve a severe liquidity crisis.

Earlier this year, Chinese companies Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co. said they would buy the brand for €100 million ($135 million), but that deal was blocked by GM amid concerns over its technology licenses.

On Monday, Swan said it was in new talks with Youngman and an unnamed Chinese bank about getting them to buy stakes to help the troubled car brand, but GM said its position on a sale of Saab had not changed.

The U.S. company's spokesman Jim Cain would not say what it would take for GM to change its mind and allow a sale of shares in Swan to Chinese investors.

Saab spokeswoman Gustavs told The Associated Press on Wednesday the company is also studying alternative plans.

"Victor Muller says there is always a plan B," Gustavs said, referring to Swan's CEO, but declined to give details.

Saab's employees have still not received their November salaries and two labor unions last week filed official requests for the money, which means Saab has seven days to pay or face bankruptcy proceedings.