NEVS has been temporarily forced to halt 9-3 production

NEVS has been temporarily forced to halt 9-3 production

Scandinavian automotive supplier association, FKG, says it received a "reptile quick" affirmative response whether or not embattled Swedish automaker, NEVS, was able to pay its June salaries.

The manufacturer has been obliged to stop producing its Saab 9-3 models at the Trollhattan factory in north west Sweden due to a contractual issue with a shareholder, leading some to speculate whether it could pay the 600 staff still on its books.

Swedish enforcement agency Kronofogden says it has received 30 applications for unpaid bills totalling US$3.45m relating to NEVS - National Electric Vehicle Sweden - but the automaker has secured strong backing from FKG it will be able to pay its employees on 25 June.

"I asked them [NEVS] - can you pay salaries in June?" FKG managing director, Fredrik Sidahl, told just-auto from Sweden.

"The answer was reptile quick - yes no problem."

The FKG chief also reiterated his belief negotiations concerning new potential investors - speculation is centering on Mahindra & Mahindra or Dongfeng - are progressing and would involve a relatively short time frame.

"I think we will have some kind of result of all these negotiations going on," said Sidahl. "Perhaps June, latest July."

Sidahl added he thought the involvement of Kronofogden was "quite normal procedure" in order for suppliers to ensure payment.

"This happens every day, in all countries every day," he said. "But the fact is they can't pay some of the suppliers based on cash problems."

The automaker previously said NEVS' main owner, National Modern Energy Holdings (NME), has since the beginning of the year decided to be the sole financier of the company, while it also highlights its assets such as buildings and tools as a means to obtain future funding.

NEVS' three main labour bodies - IF Metall and Sveriges Ingenjorer as well as Unionen - met in Stockholm this week to discuss the rapidly evolving situation.