TROLLHATTAN - Saab lurched further into crisis on Monday as two of the carmaker's own unions served bankruptcy applications despite the company having conjured up a promise of 70 million euros ($96 million) in vital financing.
Two white collar unions at Saab, whose members had their June and July salaries delayed and have not yet got their August pay, said their patience had run out and that they were using their right to apply to put Saab into bankruptcy.
"This is not a situation that any member of Unionen wishes to be in," said Cecilia Fahlberg, chairwoman of the union, after the application.
The move came after Saab announced the latest in a long line of money-raising exercises led by Chief Executive Victor Muller, saying it had arranged the 70 million euros in bridge finance with the help of a Chinese guarantee.
The move was aimed at buying some time as the company, based in Trollhattan in western Sweden, seeks court protection from its creditors.
The 60-year-old carmaker, owned by Dutch-listed Swedish Automobil, has staggered from one crisis to another in the last few months after running out of money. Its production line is halted and it owes money to suppliers and staff.
Bankruptcy decision in weeks
Unionen, which represents 1,100 Saab staff, said the court would take three to five weeks to decide on the bankruptcy application for Saab, which Swedish Automobile, then called Spyker, rescued from closure by General Motors in early 2010.
A smaller white collar union, Ledarna, representing 126 people, also handed in an application. Both organizations say it is the only way to ensure that a state scheme to pay salaries of employees of companies in trouble will be activated.
"We think that this is necessary to secure our members' salaries. Our members have not had their money and so we cannot take everything on trust and hope," Unionen chief lawyer Martin Wastfelt told reporters.
The union stressed the application would be dropped if Saab paid the salaries. If Saab won an appeal to get protection from creditors, the bankruptcy application would also fall, it added. Unionen said it would also cooperate to help Saab win the appeal.
The main blue collar unions have said they would wait with their bankruptcy aplications.
Saab meanwhile confirmed it would appeal a court ruling rejecting its application for protection from creditors while it secures its long-term future and raises short-term financing.
New money 'not enough'
The new money raised by Saab came from a technology licence agreement with a special purpose vehicle, or SPV.
As part of the deal, Chinese car maker Youngman has also signed a technology licence deal with the SPV, providing a guarantee for its payment.
Swedish Automobile said the deal was part of a bridge loan which it intended to repay with proceeds of the 245 million euro equity investment promised by Chinese partners Pangda and Youngman.
That investment still needs permission from the Chinese authorities.
David Tomic, economist at Dutch shareholder group VEB, said the Chinese deal could help to get court support for creditor protection, but was likely not enough.
"This is to show they have done everything possible to get money. This will be ammunition in the court case, but it won't be enough if all the suppliers combined already claim more than 100 million euros in bills," Tomic said.
Muller said last week Saab owes suppliers 150 million euros.
"As a company it is hard to keep alive. If you look at the man (Muller), he has shown in the past (he has tried) to keep a company going using all kinds of tricks," Tomic said. "Muller may still bring in support from somewhere."