Summary Box: Saab runs out of cash for wages

AP News
Posted: Jun 23, 2011 4:25 PM
Summary Box: Saab runs out of cash for wages

OUT OF CASH: Saab moved closer to bankruptcy Thursday after it conceded that it didn't have any money to pay workers' wages. After months of production stoppages and problems with paying suppliers, the Swedish car company said the situation is so dire that it won't be able to pay its 3,700 employees, raising doubts over how long the brand can survive.

HOW DID IT GET HERE?: Saab has been fighting for its survival since Spyker, a small luxury sports car maker, brought it out of liquidation. Skeptics questioned how Spyker could turn around a car maker that posted loss after loss when it was owned by General Motors.

WHAT'S NEXT?: Swedish Automobile, the name that Spyker adopted this month, is in talks with various parties to solve the financial problems, but warned that there can be "no assurance that these discussions will be successful, or that the necessary funding will be obtained." If Saab doesn't find a solution, its employees could ask a court to declare the company bankrupt in order to activate a government salary guarantee.