Saab and Volvo were close to bankruptcy

The following is a translation of an article from the SVT news website.
There’s some interesting questions that arise from it, which I’ll get to in a moment.
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Volvo and Saab were close to bankruptcy
Both Volvo and Saab were near bankruptcy last year, Rapport (Swedish news program) can reveal today. For Volvo, the situation was so serious that at one stage they had no money to pay staff in December.
That was why the government in December announced a major rescue package for the automotive industry. This despite previously saying that it was not going to help the car industry.
According to Rapports sources both Volvo Cars and Saab Autmobile sent out distress signals to the government. For the sharply declining sales made the firms report large losses, while their owner Ford and General Motors could not put up any help.
‘Very serious’
“It was very serious,” said Secretary of State Joran Hagglund to Rapport. It was an extreme case in the entire automotive industry, a case that hit Swedish automotive companies in particular.
The rescue loan of five billion crowns, which appeared in the state rescue package was earmarked as disaster relief for Volvo Cars and Saab Automobile, both of which were ready for bankruptcy. If companies were forced to suspend payments so the state could keep the companies afloat for up to six months.
Not only passenger cars
But it was not just car companies that had problems. During a weekend in November, the government, in addition to Saab Automobile and Volvo Cars, met with the Directors of truck manufacturers Scania and Volvo trucks.
And when the Government announced its rescue package in December that was the big line loan guarantees of 20 billion crowns, which were intended to be distributed equally among the four major manufacturers in Sweden.
But Scania and Volvo trucks never needed to use the state loan guarantees.
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I guess Saab were a lot closer to bankruptcy than Volvo, in that they had to take legal action to protect themselves from creditors and restructure the company once GM announced that they would pull the pin.
But could either of them really be bankrupt when they aren’t wholly owned entitites by themselves? Wouldn’t the corporate parent have to step in and provide wages, etc? I know very ittle about these things, but it seems they’re classified as separate entites when it suits one situation and subsidiaries when it suits another.
It’s also notable that absolutely no money was paid from that fund set up by the Swedish government to aid the automotive industry. It was nice of them to offer a gesture of support, though.
Thankfully this is all now consigned to history. The future will hopefully be something completely different from the recent past.
Thanks to Jan for the edited trans!

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