Saab Automobile Files for Bankruptcy

Created Date: 19/12/2011

A sad day for Saab as the auto-maker had to file for bankruptcy protection at a Swedish district court just hours before a judge ruled on the reorganization of the company. General Motors Co. bought Saab in 1989 and gained full ownership in 2000. Sales at Saab peaked in 2006 with 133,000 cars, by 2008 sales at gone down to 93,000 and even worse 27,000 by 2009. With General Motors having financial problems following the financial crisis they had to sell Saab to Swedish sports maker Spyker but their sales still did not improve under the new administration. It was reported on the company’s Facebook page that Saab had learnt almost two years ago today that it will be scrapped as a part of the changes been made at General motors.

The company has been experiencing problems for a while now, In April 2011 production was suspended as the company was out of cash and they were at the mercy of their creditors but were protected by the government-sanctioned creditor protection as the CEO Victor Muller was searching for investors to rescue the company.

Workers at Saab were already complaining about not getting paid. The Swedish car maker had been going back and forth with takeover talks with several Chinese companies including Zhejiang Youngman Lotus Automobile and Pang Da. These talks were never concluded has the companies pulled out due to previous owner General Motors Co. blocking the process. Earlier this month the company was told to come up with a rescue plan or file for bankruptcy. With no source of funding or rescue plan in sight the board of the company decided filing for bankruptcy was in the best interest of the creditors.

Source

http://online.wsj.com/article/SB10001424052970204791104577107812414053178.html

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