Saab production delayed until at least end August

Saab (Swedish Automobiles) has announced that production at Trollhatten will not now resume on 9th August. They hope to restart on 29th August.

We’ve kept the faith with Saab so far, and we’ve been happy to report every time they tell us that Victor Muller has managed to charm another injection of cash for Swedish Automobiles. So we may as well carry on until Saab either rises like a Phoenix or Victor Muller loses his smooth stick.

We reported at the end of June that Saab had managed to get its hands on €41 million (€28 million from a sale and lease back deal and €13 million for car sales), and then earlier this month Saab tod us they’d signed a binding agreement worth €245 million with Chinese companies Youngman and Pang Da for joint production and distribution in China. All good news.

So good, in fact, that we had no reason to doubt that the plan to restart production properly for the first time since April would happen as expected on 9th August. But it won’t, despite what could be as much as €100 million actually going in to Saab’s coffers in the last month.

Which if nothing else does give perspective to just how big a hole Victor Muller has to keep filling. He must be starting to feel like a financial Santa on Groundhog Day; however much he magics in to Saab it all gets swallowed up before the flame of self-sufficiency ignites – and off he goes again to find some more kindling capital.

Saab are saying part of the blame lies with traditional supplier Summer shutdowns making the flow of components impossible to get in place for the restart. There is doubtless some truth in that, but there must also be a huge reluctance by component suppliers to deal with a Saab which seems perpetually on the brink.

If we were supplying Saab with components the reassurance of Victor Muller’s ability to keep finding funds would be helpful, but the reality is we’d be wanting up-front money to cover the cost of six weeks supply – and if our invoices for month one hadn’t been paid after two weeks we’d be pulling the plug.

It’s hard to believe Saab’s suppliers won’t be looking for something similar, and if they are the cost of filling in the hole that existed in payments and fronting money would explain some of the ongoing difficulties, despite the significant injection of funds.

The revised restart of production at Saab is now week 35 (29th August) and Saab say they still have 11,000 orders in the pipeline to fulfil, although they don’t say how many they’ve lost through the best part of five months of production chaos; it must be substantial. But we’d still bet on Victor Muller pulling off the China deal and getting Saab back to normal.

And there is still Vladimir Antonov to fall back on.