Saabs suppliers risk billions in losses
October 21, 2011 in News
GP.se (original article here):
Saab’s suppliers risk billions in losses and might have to close factories if Saab goes bankrupt.
Saab’s lingering suppliers are missing out on information regarding the events that are unfolding.
- We want to know: will the production start or not, say Fredrik Sidahl who is managing the Swedish Car-component branch organization.
The suppliers have large stakes in sizes of a billion Swedish Krowns. That money stands a risk of being lost at a bankruptcy.
Fredrik Sidahl does not see any immediate risk that Saab would drag any of the suppliers down in the fall.
- All major suppliers have already stepped aside, but we might se closing of factories even so.
He is worried over the latest turns around Saab.
- A crack has occurred and this is serious.
Saabs suppliers wants a long-term solution.
- The company needs a serious cash-injection and we are talking of sums of a few billion crowns according to Fredrik Sidahl.
Even if Saab was to get a long time investor it will take a long time to get the production resumed. The starting distance is very long with some suppliers.
The threat of bankruptcy is tightening its grip in a situation where the industry in general is looking at a down-time.
- We have not yet seen what happens with the closure of the Volvo factory in Uddevalla (30 km west of Trollhättan).
Saab is needed if western Sweden is to keep its status as a center for vehicle development and attract foreign investors.
michaelb said on October 21, 2011
If I am correct, the sum to be lost by suppliers is in the order of 110m+ EUR. That is that much, though it might hurt some suppliers specifically. But what is important, that the car industry in Sweden will take irreversible damage, The Swedish government should do everything to make Saab survive. Next few days will be crucial.
Jasper said on October 21, 2011
This will impact the supply chain that supports VOLVO
JasonPowell said on October 21, 2011
That was my thought too. Also, it may make parts more expensive because only supplying for one less company. I would think the impacts could be huge for Sweden directly.
KarlR said on October 21, 2011
Volvos CEO said that it wont affect them since SAAB has been closed so long so they have adapted!
JasonPowell said on October 21, 2011
That would only ring true if suppliers don’t have to adjust pricing in the long run. Do you know if suppliers have increased prices since the start of the Saab ordeal? If not, that doesn’t mean they won’t have to down the road.
KarlR said on October 21, 2011
Volvo is also selling alot more cars so the suppliers doesn’t need to increase prices because of that. Cheers
ivo 71 said on October 21, 2011
No, they are not. 700 million euros loss in the last quarter, Uddevalla plant closing…
Ivo
KarlR said on October 21, 2011
Ivo 71, Yes they are selling more cars!! Read the numbers!! They are making a loss this quarter but a profit for the whole year and they are increasing more than SAAB produced last year!!
ivo 71 said on October 21, 2011
I stand corrected. They did sell more units. But they didn’t make enough money on them “due to unfavourable exchange rates and the need to invest in technology”.
Ivo
quickbird said on October 21, 2011
One fact, they can survival. That is enough. Not like SAAB, struggling all the time…
quickening said on October 21, 2011
I believe this was one of the core reasons why the US govt. decided to bail out GM and Chrysler. They realized the ripple effect on all the different tiers of suppliers. It would be just a bunch of GM/Chrysler people out of work, but suppliers also, and even the dealership networks.
hilmar said on October 21, 2011
7.Oct. 2011 – “Swedish Government is willing to help” (SU). So, it is time to help. But seriously meant help, no tricks anymore.
quickbird said on October 21, 2011
Sweden government doesn’t care about SAAB. ..
ThomasJ said on October 22, 2011
The Swedish government will never help Saab.
They are just making smoke rings.
Later they will find someone to blame.
A-RO 95 said on October 22, 2011
I must repeat what I have mentioned before, even if/when Saab decide to restart production, most suppliers have probably now completed their plans without Saab and so capacity will not be available for a quick resumption of supplies. In addition it is possible that the suppliers will not only require that outstanding debts are secured but also payment in advance for future shipments!