Saab Unions Threaten Bankruptcy Action Over Unpaid Wages
Union employees working for Saab are growing impatient after the automaker said it could not pay wages to its workers because it had not yet obtained necessary short-term funding. The unions have threatened legal action that could end in bankruptcy for the automaker. The IF Metall and Unionen groups will send a formal demand for payment this Monday if their members have not received their unpaid wages. “Then the company has seven days to react,” IF Metall representative Veli-Pekka Saikkala told Reuters. “After that there are two alternatives. Either we see that the situation can be solved, or we demand that Saab is put into bankruptcy.”
A rescue package for Saab has been set up by two Chinese car companies, Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co, which would solve longer-term financial issues, however this still needs to be approved by authorities in China and Europe.
Bankruptcy is still very possible for Saab and “The company is in a downward spiral. The longer it takes, the tougher it gets. The longer it takes, the more potential buyers will leave,” said analyst Martin Crum at Dutch Broker AEK
Saab stopped production in April because of payment disputes with suppliers and only briefly restarted production for a week at the beginning of June. So far Saab owes at least $47 million to Swedish suppliers, and the longer the Trollhatten plant is at a standstill, the deeper the hole becomes for the automaker.
[Source: Automotive News]
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