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COMMENT: Saab staggers on against rumour mill

By Simon Warburton | 13 October 2011

In the maelstrom of speculation surrounding Saab, yet another fire had to be fought this week as rumours rapidly spread that Chinese distributor Pang Da had pulled the plug on its proposed investment in the stricken automaker.

I was at the EquipAuto aftermarket show in Paris as the rumours took hold, with the French press certainly picking up the story, which seemed to herald an imminent end to this seemingly endless saga.

Calls to Saab in Sweden were met with bafflement as to the origin of the story, so much so that the manufacturer issued a statement of Pang Da support that had been approved by the distributor.

And speaking to Sweden's National Debt Office yesterday (13 October) from Paris Charles de Gaulle airport, its project director for Saab, Daniel Barr, told me he had discussed the issue with the Trollhattan operation.

"They have rectified what was in the [media] article," was Barr's assessment. "I believe it [rumour] is totally false, it is some kind of misunderstanding."

And in sign of how seriously he took the latest issue, Saab confirmed CEO Victor Muller even sent text messages stressing the continued involvement of the Chinese.

"The nature of the text [was] that everything its on track with both Pang Da and Youngman," said Saab.

More pressing surely is what Saab's four main unions will do. Having shown heroic patience so far as month after month's wages went unpaid - a situation considerably eased by the Swedish State salary guarantee kicking in now the automaker is in bankruptcy protection - a pressing deadline of 21 October is rapidly looming on the calendar.

That is the date when the formal government money runs out, although Saab appears to have pulled yet another extraordinary rabbit out of the hat by announcing a first cash injection from Youngman of its EUR70m (US$96m) bridging loan.

But the labour bodies - one of whom - Unionen - I spoke to this week - are already sharpening their pencils ready to send what it is almost a template letter to Saab should payments yet again be late.

However, the Youngman news should allow the unions to breathe easier come 21 October, although no details have yet been released on the amount of cash released.

"We are in a continuous dialogue with the unions," a Saab told me from Sweden. "Everybody is very well aware of the deadlines we have and payments due."

It may be that Saab scrapes over the line on 21 October and has enough in the piggy bank to pay its workers for yet another month. But that bridging loan is just that - a loan.

Part of any eventual - and far larger investment from the Chinese will have to be used to pay back that bridging money. Saab can't keep on borrowing money indefinitely - a point its unions will be undoubtedly be pressing home as they look to see their members' bank accounts filled very shortly.