Scandinavian supplier association FKG says Saab cannot pay its originally-mooted suggestion of 10% to suppliers in order to start clearing some of the significant debt it owes.

The struggling Swedish automaker originally sent letters to up to 700 component makers, said FKG earlier, but the supplier body now says even that payment is looking unlikely.

“I know Saab has not got the money that they can pay the suppliers 10%, no way,” FKG managing director Sven-Ake Berglie told just-auto from Sweden. “We are talking about many millions.”

There are suggestions in Sweden up to 700 workers in the supply chain could be made redundant, although this was not immediately able to be confirmed.

“It is not serious what is going on – you can’t go on with a company like that,” said Berglie. “People start to wonder why is the company not bankrupt.

“We are delighted [it] is not in bankruptcy, because the suppliers would have lost their money.”

Difficulties in paying Saab’s myriad suppliers have led to a stop-start summer at the Trollhattan factory with production currently halted.

Saab’s four unions are due to meet CEO Victor Muller this afternoon (10 August) at the Trollhattan factory, following payment of white-collar workers’ July salaries last week.

Saab has previously said it would aim for a 29 August restart, although the automaker was not immediately available for comment.