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Production Interruptions at Saab Continue Due To Cash Shortage

Posted: Apr 11, 2011 12:15 p.m.

It looks like the U.S. government isn’t the only institution having a hard time solidifying its budget. Saab plants were closed for four days last week, and may stay that way until the automaker can come up with enough cash to pay its bills.

“In a statement issued yesterday, Saab confirmed the company was suffering ‘shortages in material shipments’ and said, ‘We continue to discuss payment and supply terms with our suppliers and expect to resolve these issues in the very near future,’” reported Automobile Magazine last Friday. Currently, Spyker Cars, Saab’s parent company, is negotiating loan deals with the Swedish government and its suppliers, but according to The New York Times, things aren’t looking good. “Spyker’s chief executive, Victor R. Muller, who is also in temporary control of Saab, insisted this week that Saab was not on the verge of collapse but was merely suffering from ‘a small glitch,’” writes The Times. “Those words have not reassured investors. The company’s shares fell 3.5 percent on Thursday, to 3.85 euros ($5.50), in Amsterdam, and are down 11 percent this year, giving it a market capitalization of 77 million euros ($110 million).” GM owned Saab until last year, when the American automaker sold it to raise capital for its own ailing bank accounts.

Although production interruptions in Europe don’t affect U.S. jobs or companies much, it might cause a shortage or delayed launch at dealerships, especially of Saab’s two new models that are slated to debut in the near future. The 9-4 crossover is expected to reach dealers this year, and the 9-3 has received a lot of press attention for its U.S. return in 2012. Automotive News spoke with Lynn Thompson, the general manager at Saab of Southwest Missouri. “‘I don't know what to do right now,’” said Thompson. “‘I don't know how I can sell a brand-new car to somebody and not be able to tell them I can get parts for it.’"

If you want a Saab 9-3, 9-4, or 9-5, hold off until the automaker’s financial woes have been sorted out. It’s possible that if the company goes under, parts for repairs may be hard to find. Plus, if Saab dealerships go out of business, you won’t be able to get your car repaired by dealer experts. For fuel-efficient, trendy European cars, your best bet is to shop around at a Volkswagen or Audi showroom. Plus, VW is better-known for reliability than Saab, there are about twice as many models to choose from, and Volkswagens tend to be far cheaper than Saabs with comparable performance.

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