Thursday

Saab is tottering on the brink of collapse - financing falls thru

Saab breathed a sigh of relief a few days ago when it announced a deal with a Chinese automaker that would have Hawtai Automotive Group gobble up 29.9% of Saab and loan it more money, funneling to Saab $216 million.

With the money, Saab was set to pay its suppliers and re-open its closed factory. Then, mirroring what happened when the same Chinese company tried to buy the Hummer brand from GM a few years ago, it all came undone, according to an article from the Detroit Bureau.com.

Apparently Chinese bureaucrats closely regulate the company and Hawtai could not get their approval on the deal. If the deal had gone thru, Saab could have started distributing Chinese-made vehicles in the US and elsewhere.

The European Investment Bank, which also has a stake in what's going on, nixed a prior deal that would have had a Russian banker buying up a big chunk of Saab.

Meanwhile, Saab suppliers have generally been refusing to deliver parts to the Saab plant since March 29 and that stopped production of the two central Saab models, the 9-3 and the 9-5. Saab's chairman said he is still hopeful (that the company can pull a rabbit out of the hat) but things continue to look dimmer for the Swedish company.

Now more than ever - think twice before you buy a Saab product anytime soon. Because soon they may be an orphan.