Saab Declares Bankrupcy

Many of the worlds auto manufacturers are in financial trouble due to the severe decline in auto sales. Today, Saab was the first auto manufacturer to declare bankruptcy. The Supervisory Board of Saab decided that bankruptcy was the solution and notified the 4000 employees how the company will continue to operate. The filing is apparently similar to a Chapter 11 filing in the United States, which allows the organization protection from the creditors while allowing the company to restructure.

Shown below is a 2008 Saab 9-3, which is Saab's most popular model.

Sweden's government had turned out a bailout request from the parent corporation GM. GM has indicated in the court filing that the company "would not fund further the projected losses of the company (Saab)." It appears that GM and the Swedish government are playing a game of chicken. Unfortunately, a high number of jobs are on the line if this does not work out.

Last year Saab lost about 3 billion Swedish crowns ($340.1 million) and anticipates that 2009 would lose about the same amount. Saab Managing Director Jan-Ake Jonsson indicated that they will continue to explore all available options for funding and or selling Saab, it was determined that a formal reorganization would be the best way to create a truly independent entity that is ready for investment.