Saab Bankruptcy Looms Due to Unpaid Wages - Total Bankruptcy
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Saab Bankruptcy Looms Due to Unpaid Wages

August 29th, 2011


Swedish auto maker Saab Automobile AB may be forced to file bankruptcy by week’s end over unpaid wages, The Wall Street Journal reported Monday.

In an interview with the newspaper, Darko Davidovic, a lawyer for labor union IF Metall, said that Saab received requests for payment on Aug. 26 for 1,486 union members’ monthly wages.

"This time we had access to the company’s payrolls, which was much faster than collecting pay slips from each of our members," Davidovic told the paper.

Saab has seven days from its receipt of the requests to pay its staff. If payment is not received by Friday, Sep. 2, IF Metall will have a three-week window to file an involuntary bankruptcy against Saab in Swedish court.

Under the bankruptcy process, wages will be covered by the state if the automaker is unable to make the payments on its own.

Payments for blue-collar Saab employees were scheduled for Thursday, Aug.25, and scheduled for white-collar employees the following day.

In the days preceding the payment date, the automaker announced that it may be forced to postpone payments as it waited to receive "committed" funds from investors, but could not guarantee that the funds would be obtained.

The Wall Street Journal reported that Saab Automobile’s white-collar workers union is currently gathering pay slips that have not been honored from its nearly 1,000 members. The union intends to send the requests to the company Tuesday.

The present situation marks the third consecutive month that Saab has allegedly failed to pay wages to its 3,600 employees on time. Wages for June and July were reportedly paid about one week after their scheduled dates.

Production has been halted since April at Saab Automobile’s Trollhattan plant due to unpaid supplier bills. Previously, the company announced that it hoped to resume production this week, but those plans have been delayed due to the current lack of funding for both wages and suppliers.

"Our ambition is to pay the wages," a spokesman told The Wall Street Journal, "but we don’t have a financial solution in place at this time."

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