Swedish automaker Saab has filed for bankruptcy reorganization, reportedly trying to buy more time to turn around the ailing company.
Since being sold by General Motors last year to Dutch supercar maker Spyker Cars, the company has struggled to keep the lights on, despite selling two new models designed under GM’s tenure. Sales in the United States have crashed 95 percent since 2008, when GM owned the company, to just 4,800 cars since January. (Back then, its newest model was five years old.) That likely represents a vote of no-confidence in the company from consumers, as much as a reflection on the cars in the competitive upscale market.
Saab Spyker Automobiles delayed salary payments to its workers for the third time last month, and production has been largely stopped since April, as the company couldn’t pay for parts to build the cars.
Saab’s labor union has threatened to force the company into bankruptcy over the unpaid wages. The company’s latest move is a step short of that, equivalent of corporate reorganization. Saab president Victor Muller says it is a stopgap measure while the company waits to receive money that has been committed by two Chinese corporate investors. “The eventual purpose of the voluntary reorganization process is to secure short-term stability while simultaneously attracting additional funding, pending the inflow of the equity contributions of Pang Da and [Zhejiang] Youngman,” said a statement issued by Saab’s parent company Wednesday.
We recently tested the new 9-5, and while it isn’t a particularly bad car, it scored at the bottom of its class of entry-level luxury cars. Even at that, it ranks near the top of its category in price. The company recently introduced the 9-4X SUV. While we haven’t fully tested it, our first impression is decidedly mixed.
Given all that, it’s no wonder even Saab loyalists are holding back on buying the new cars, as we have previously advised. Even if you loved the car, you have to wonder about resale value and ongoing service. Bankruptcy restructuring may well buy the company some time, and new investment may set the company afloat. But until that happens, it is best to exercise caution before shelling out for a new Saab. There are plenty of better, prestige-brand cars from which to choose.