FKG Expects Payment Up Front

In an article from Just-Auto.com, FKG managing director Frederik Fidahl says that they will only agree to payment up front by the new owner. This runs counter to what we’ve heard of Youngman and Pang Da’s plan, which was for credit terms up to a year. One has to wonder why the Chinese, who claim they would invest 610 million Euro in the company, needs a year to pay off 150 million? The more we learn about Youngman, the more questions come up. We’ll have more on that at the beginning of the week.

At this point, we at SU just want clarity from all sides, and for whatever deal Saab gets to be as fair not only to suppliers, but Saab workers for a long time to come.

Scandinavian supplier organisation FKG says Saab will need to pay up front before delivery in order for its members to do business again with the automaker as it looks to exit bankruptcy protection.

Saab’s 1,000 or so suppliers are owed around EUR150m (US$208m) with non-payment from the automaker triggering the long-running crisis for the manufacturer, but even if proposed Chinese investment is forthcoming new payment methods seem inevitable.

“We will not [allow] a situation where even the debt increases from the level from today,” FKG managing director Frederik Fidahl told just-auto from Sweden.

“That means if they don’t start to pay us we need money up front. That is a rule when a company is in reconstruction, by Swedish law.”

Despite the new payment environment, the FKG managing director nonetheless added cash injection from Youngman and Pang Da was a “great step forward for the Swedish automotive industry – the industry is in need of two car manufacturers,” he said.

Fidhal was at this week’s creditors meeting in Vanersborg near Saab’s Trollhattan factory and said both Youngman and Pang Da CEOs addressed the 250 or so strong audience, including many suppliers to stress their commitment to their MoU.

The supplier chief also addressed the issue that has risen close to the top of the Saab agenda as it tries to exit reorganisation, namely what will former ownerGeneral Motors do, although the US giant’s increasing involvement with China may have an influence.

“One of their [GM’s] big markets is China, so any fuss with the NDRC [National Development and Reform Commission]…this is a delicate matter for them.”

Although FKG estimates none of its members will go bankrupt as a result of chronically late payments, Fidahl conceded it was “not a good situation for a lot of them – they are on the edge” – but the fact Saab has been at a standstill for six months means many have found alternative work.

FKG added Saab would reveal details of its payment plan to suppliers by mid-November.

nichell
Guest
4 years 10 months ago

I have my doubts about the Chi Coms. They’re very stingy with money, unlike the Tata’s. How much money did Volvo get from Geely? I don’t see very many new Volvo models, but I see a plethora of new Land Rovers, Range Rovers and Jaguar models.

Jonas Axelsson
Member
4 years 10 months ago

Vagabond, how much did Tata put into new designs or were they part of the “technology” package when the company was purchased? With my pardons to Mumbai, but if the engineering talent is like what is seen on the streets I find it hard to believe any new designs were the result of superior engineering talent that was just waiting to be unleashed? Perhaps, but ask my Mom if I am ever wrong, then, ask my wife. 😉

nichell
Guest
4 years 10 months ago

Well how much did Geely put into Volvo? How much has the Chi Coms put into Saab, up to this point, Rallyho? Please refresh me, I can’t remember.

spacy
Guest
4 years 10 months ago

.
TATA also got a rather large handout from HM Goverment…

Jonas Axelsson
Member
4 years 10 months ago

November? They are going to reveal a plan in November? This is better than waiting for Richard Millhouse Nixon’s “secret plan” to end the war in Vietnam. Is it 1969 all over again?

Tripod
Member
4 years 10 months ago
First, if it’s the CEO of FKG the folks at “the automotive industry’s leading online resource” has spoken with, then his name is Fredrik Sidahl. 🙂 That means if they don’t start to pay us we need money up front. That is a rule when a company is in reconstruction, by Swedish law. Well, that’s no news. No, companies aren’t allowed to increase their debt during reconstruction; but who knows if this company will need supplies from the group during reconstruction; there are so many scenarios; and if the debts are paid, and out of reconstruction, then what? As for… Read more »
ryanonsrc
Member
4 years 10 months ago

Folks, this is most likely just apart of the negotiation process (which has definitely proven to be super complex).

As much of cliche this may be, at this point: we just have to “wait and see”.

moose
Member
4 years 10 months ago
Jeff, You wrote that “we’ve heard of Youngman and Pang Da’s plan, which was for credit terms up to a year“. Was this information published somewhere, or is this something that you might have heard yourself from somewhere? My understanding is that the payment plan is currently being worked on, and will be published “mid-November”(as mentioned in the news article). In case the work is still ongoing, I personally would much rather wait for the planning work to be finished (and published) before I start speculating what the proposed payment schedule to suppliers might indicate. As you know, in the… Read more »
wpDiscuz