With just a year under its belt as an independent company, some journalists have already given up on SAAB. To many, last week’s news about the company’s production stoppage was sufficient evidence that the Swedish company had reached the end of its rope. Without sufficient funds to pay parts suppliers, the company would be unable to continue producing cars and eventually go bankrupt. Was this finally the end for SAAB?
“A young company for the first time on its feet in many decades … became an independent company standing on its own legs. But, as you can imagine, a company that has just found its new independence is like a child that is starting to crawl and wants to learn to walk and drops on its face every once in a while before it can start to run.” —SAAB Chairman Victor Muller at NYIAS
Rather than a signal of defeat, Muller’s words point only to the occasional trials along the road to future success. And his optimism seems to be well founded. In a recent Wall Street Journal article, Katarina Gustafsson has reported that SAAB will be raising collateral by selling its physical property to a European Investment Bank (EIB) approved bank at fair market value. The bank would then lease the property back to SAAB. This financial move would provide the company with enough funding to pay parts providers and to continue production as soon as possible. SAAB Chariman Victor Muller announced at the New York Auto Show that he expects approval from the EIB by Tuesday of next week.
The allusion to a child learning to walk is a good one. After twenty years with General Motors, the new company has much to work through in order to become a viable auto maker. But with several new models waiting in the wings, things are looking pretty good. Time will tell how soon the company is able to get back on its feet and when it will be able to procure enough revenue to finally run on its own. But for the time being, things don’t seem to be quite half as bad as the media had made them out to be.