Big trouble is brewing in little China. While Swedish automaker Saab was has agreed to sell itself to Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automobile Co. for what seemingly amounts to a pittance ($142 million and up to $854 million in long-term funding), General Motors, Saab's former parent in the United States, is apparently none too pleased.
Saab may have finally been saved last week when Chinese companies Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automobile Co. agreed to buy the Swedish automaker, thus providing some much-needed short- and long-term financing. Pang Da and Youngman purchased Saab for 100 million euros ($142M USD) and they are offering up a €50 million ($70M) bridge loan. Most importantly, the Chinese companies have now pledged €600 million ($854M) in long-term funding. That's assuming, of co
If a new report by Autocar is to be believed, Saab may be pushed into bankruptcy as early as later today. According to the British weekly, emergency financial support from Chinese carmaker Youngman is "virtually certain to be blocked" by its home government because the deal does not include any new intellectual property rights. Saab not only needs approval from Chinese authorities to broker the deal, it must also still see its reorganization formalized in Swedish courts.
It sounds like Saab can't win for losing. Reuters is reporting that the Swedish automaker had to stop production again on Tuesday, June 6, due to possible parts shortages. Saab just recently started its lines back up after a nearly two-month stoppage brought about by cash shortages.