Saab in emergency meeting to discuss future

The board of Swedish carmaker, Saab, are in talks to consider its future after it was reported that the firm is set to file for protection from creditors.

It was reported that Saab, which is owned by General Motors (GM), is discussing a reorganisation filing, which is an alternative to an outright bankruptcy filing and is the Swedish equivalent of filing for Chapter 11 bankruptcy in the US.

Saab‘s future has been in doubt since the Swedish Government rejected GM’s call for financial aid for the carmaker.

The Swedish Government has ruled out owning carmakers or their factories and said GM was “shirking its responsibility as an owner“.

GM is proposing to make Saab an independent business on 1 January next year. It has been actively seeking a buyer for the Swedish carmaker and yesterday said it needed the backing of the Swedish Government prior to a sale, given the sizeable cash demands associated with its operations.

Earlier this week, GM, which is America’s largest carmaker, said it needed to borrow up to $16.6 billion from the US Government in order to survive – this is in addition to the $13.4 billion it has already received.

Furthermore, the carmaker has announced plans to shed a massive 47,000 jobs worldwide and plans to shut five more factories.

The car industry worldwide has suffered as consumers cut back on big ticket items and many other carmakers worldwide have been making major cut backs.

Story link: Saab in emergency meeting to discuss future