It’s all starting to sound eerily reminiscent of two and a half years ago up in the stretches of northern Europe.
An automaker has had to stop production due to short-term financing issues, suppliers are not being paid and meanwhile staff at the manufacturer are now wondering if they themselves will receive any salaries after this month.
Go deeper with GlobalData
If that all stirs a few memories, then no wonder. In a ‘groundhog day’ echo, National Electric Vehicle Sweden (NEVS), the successor owner of the former bankrupt Saab, has found itself immersed in some familiar difficulties.
Just to add to the sense of deja vu, there is speculation some of those unpaid suppliers are very unhappy indeed, the Swedish enforcement agency, Kronofogden, has become involved and the unions are starting to look with forensic scrutiny at the situation.
The former Saab’s long, slow plunge to bankruptcy became a saga of epic proportions, occuring as it did right at the heart of the worst global recession for generations.
Many parameters now seem uncannily to evoke that intense period of only two and a half years ago, when a plethora of actors, investors, unions, governments and banks, all coalesced in the ultimately doomed attempt to prise Saab from the jaws of administration.
NEVS is gamely trying to put a brave face on what sounds a decidedly tricky situation in its home town of Trollhättan in North West Sweden – and has fired a broadside at a key partner to boot that doesn’t appear to have lived up to expectations.
“”The root cause of the current situation is NEVS’ shareholder, Qingbo Investment, has not fulfilled [its] contractual obligation to finance operations,” thundered the company, while a spokesman for the automaker in Trollhattan told me it had released around 100 consultants working on the project, although that still leaves around 600 employees looking anxiously beyond 25 June, the next salary date.
NEVS insists it can pay those wages – but again in language reminiscent of the former Saab’s considerable woes the spokesman noted: “We have enough money to pay our employees for June,” which is not exactly a ringing endorsement salaries for July will be forthcoming.
Just to add to the sense of deep unease and in a further reminder of the recent past, the labour clans in the guise of IF Metall, Sveriges Ingenjorer and Unionen, gathered in Stockholm this week, even drawing on a touch of black humour illustrating their unhappy experience with Saab last time out.
There was a sense of: “When will we three meet again,” as IF Metall told me it was covening with its union colleagues and although the mood is not quite yet: “In thunder, lightening or in rain?” it’s clear the labour bodies want to act in concert.
“”Now we [unions] have talked to each other and said we have to handle it just like last time – to do it together,” IF Metall legal adviser, Darko Davidovic, told me from Stockholm.
“Just like last time.” That’s a grim portent if there ever was one and if the vultures aren’t exactly circling, alarm bells are ringing out loud and clear across Sweden.
This would appear to be particularly true in the supplier sector, although as a Kronofogden spokesman hinted to me, the 30 bill applications it had so far received totalling US$3.5m, could be a “signal.”
That message could be the first warning shot across the bows that NEVS suppliers – some presumably having been through the mangle with Saab – do not want to endure the same again.
Indeed, Kronofogden insists this is very much a “first step” in a process that is by definition, laborious and painstaking.
NEVS is resolutely not divulging who’s on the most favoured list to be sent a cheque, but with the paint so wet still on the grim memories of only a short while ago, any nervousness on the component producers’ part is surely understandable.
But despite the twitchiness of suppliers, this may turn out to be a temporary set-back.
NEVS assures me it is talking to two Asian OEMS – speculation is centering around Mahindra & Mahindra as well as Dongfeng – while Scandinavian supplier body FKG remains optimistic the situation will be resolved.
“I know they are discussing some other investors – I talk to NEVS,” FKG managing director, Fredrik Sidahl told me from his Gothenburg headquarters. “It is a better situation than it was two years ago.
“We are having a new Saab summer – a Saab summer could be positive news as well as negative.”
The Scandinavian supplier association chief also highlighted how China is actively looking to eliminate vast numbers of ICE vehicles from its roads – maybe even a staggering 6m of them – and promote electric models instead.
With NEVS looking to produce the electric version of its 9-3 and certify it in China first, the potential is obvious, despite the undoubted challenges.
Last time around as a whirlwind of potential suitors revolved around the ailing Saab – some triggering analysis by the Swedish National Debt Office and a private investigator all things – it seemed Saab was only going one way.
Today, the list of players is dramatically smaller than at the end of 2012, but if the Saab name disappears once more, it would surely take an effort of herculean proportions to see the famous brand reappear yet again.
The picture – although challenging – seems a lot brighter than those dark days though and the FKG’s optimsm – coupled with NEVS’ insistence its assets far outstrip the debt – ought to see the automaker home with a few runs to spare.
