Saab union eyes bankruptcy push TROLLHATTAN, Sweden (Global Markets) - Saab faced a fresh threat to its survival on Friday after a union said it would next week push for the ailing car maker to be made bankrupt.Stock Market Predictions
Saab's workers are still waiting to get their pay for August and unions have the right to seek bankruptcy if they want to activate a state scheme to pay the salaries instead.
The company said it would make a fresh application for court protection from creditors on Monday, as it tries to fend off what many commentators see as the inevitable collapse of the 60-year-old group, but a lawyer said he thought the plea for the process, called a reconstruction, would be rejected again.
Production at Saab, rescued from closure just last year, has been halted for months as bills to suppliers remain unpaid.
White collar union Unionen said it would make a legal move next week. "We have to act quickly," said legal officer Martin Wastfelt. "We must act within a couple of working days."
The blue collar union, IF Metall, and a smaller engineers union said they would wait, but wanted a quick wage solution.
"As we see it today, there is a possibility that our members will get their money from Saab, but that must happen soon, in a couple of days the money must be in the bank accounts," IF Metall chief Stefan Lofven told reporters.
Saab's Dutch-based owner Swedish Automobile NV (SWAN.AS) was not throwing in the towel.
"We anticipate filing (an appeal) by Monday," Swedish Auto Chief Executive Victor Muller said, referring to an appeal against a lower court decision on Thursday to reject the company's application for protection of creditors.
His company, then called Spyker, rescued Saab from closure in early 2010 by buying it from General Motors (GM.N), but ran into a cash crisis this year.
"We are now talking with our Chinese partners and our Chinese advisors to put together a more convincing and compelling information package to submit to the court," he said in an interview on public radio.
Muller said the company had money to pay the salaries but had been legally advised it could not pay out as this would be showing preference to one set of creditors over another.
SCEPTICISM
Hans Rydberg, an official at the state debt collection agency, which has been seizing funds in Saab accounts to pay suppliers' debts, told public radio that Muller would be breaking the law if he had concealed funds.
Muller told news agency TT he has all along been advised by lawyers. "The advice we have been given is that we are absolutely within the law," he said.
Saab has said suppliers are owed 150 million euros.
Rolf Abjornsson, a partner at law firm Danowsky & Partners who specializes in insolvency and company reconstruction, said Saab's court appeal was likely to be fruitless.
"The law requires that there is a reasonable chance that the reconstruction process will work. If you have production stopped and you have no cash, then you have no proper financing. It just does not add up," he told Global Markets.
Muller told the radio that the court appeal would answer the first court's questions about the process by which Chinese car companies Pangda Automobile Trade Co Ltd (601258.SS) and Zhejiang Youngman Lotus Automobile are seeking approval from China's authorities to invest 245 million euros. ($343 million)
Saab will also supply to the appeal court more detail on when that money can be expected and whether it is sufficient to get the company up and running again.
The first court said the company had already had protection from creditors in 2009-2010 and it had not made a convincing argument for a new scheme.
Swedish Automobile's shares were down 42 percent at 0.4150 euro at 1425 GMT after a two-day suspension. They are down 79 percent this year.
In Sweden skepticism is high about the chances of survival for Saab, a small niche maker of premium cars in a highly competitive market dominated by the likes of BMW (BMWG.DE). "End the misery now," was the headline in daily Dagens Nyheter, which went on to say bankruptcy was unavoidable.
Business daily Dagens Industri said: "Someone not blinded by all the beautiful phrases about a premium brand with iconic status and a world-class car factory cannot avoid seeing that Saab as a business stands naked." ($1=0.714 euros)
(Additional reporting by Simon Johnson, Patrick Lannin and Roberta Cowan; Editing by Greg Mahlich and David Holmes)
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